Read the following selection from the Margin Notes by clicking on the
Watch these presentations. When you click on one of the links below,
a new screen will pop up. Use the scrollbar on the side of the new screen to
You need Adobe Reader to view PDF files.
(Optional) Read the following chapter from the textbook.
D. The following Optional
Links will help you do better in your course but they are not required.
Activity #3: Analyzing Wal-Mart (10 points)
For Activity #3, we're going to watch
a documentary about Wal-Mart stores and their success.
Go to the website of Frontline's
Is Wal-Mart Good for America? From the left side of
the page choose the Introduction link and read through that page. You
are welcome but not required to follow the links embedded in the text. Return
to the original page and explore the following links from below the Introduction
The Secrets of Wal-Mart's Success
The China Connection
Each of those pages has a number of links to fascinating
background information on the Wal-Mart story. You're not required to read everything
linked on all three pages but you need to at least skim through as many as possible.
They're all interesting and the more you know, the better.
For fun, try
Wal-Mart's Woman Problem and
Wal-Mart's Discounted Ethics.
From the right side of the Frontline page, follow
the link to Watch the Full Program Online. Read through the brief introduction
on that page. To watch the documentary, you will need Windows Media or Real
Player. If you don't have either, you can download the player of your choice
for free by clicking on one of the links at the bottom of the Unit 1
page. The documentary is just under 60 minutes in length but has been divided
into 5 "chapters" for viewing. The chapters are accessed by clicking on the
picture for each, either with the cable/dsl link or the 56k modem
link. (If you have technical difficulties, the
FAQ pages may be of some use.)
You should be able to watch the documentary on
any but the oldest and slowest computers. If you have problems, you can download
transcript for free. Reading rather than seeing won't
have the same impact but if it's your only choice, I certainly understand.
As you watch the documentary, consider the following
questions. (Do NOT send me the answers to these ... they're only to help you
stay focused during the documentary.)
What did you notice at the Wal-Mart shareholders
meeting? Do you think this is different from other shareholders' meetings?
If yes, in what ways?
How is Wal-Mart able to keep track of its inventory?
Why is this important? List the effects this has on producers.
Trace the decline of Rubbermaid from 1994 to
2004. What factors most contributed to this decline?
What is an opening price point? How does it
Wal-Mart started a campaign encouraging people
to buy products that were made in America. What influence did this have
on Wal-Mart's buying practices? Be specific!
In 1994, President Clinton said that new trade
agreements would create a market for American products in China. What happened
to US companies after opening trade with China? Look at the statistics,
companies and places.
List the arguments in favor of outsourcing
and those that are against it.
Compare the situation at Five Rivers Electronics
and the Thomson Plant. What caused problems and what was the result for
Be familiar with the following terms.
when a business obtains services or products used in manufacturing, such
as parts for a television set, from an outside (often overseas) supplier
or manufacturer in order to cut costs.
conduct most of their business outside of the country in which they are
incorporated. These companies are also known as non-resident companies.
is when manufacturers
of products decide what to produce, how much to produce and the price of
Pull Production is when retailers determine what the
manufacturer will produce, how much to produce and the price of the product.
Adam Smith (1723-1790) stated that “it is not from
the benevolence of the butcher, the brewer or the baker that we expect our dinner,
but from their regard to their own interest.” What this implies is that if they
do not make a profit, they will not supply meat, drink or bread because they
would not benefit. According to Smith, someone earning money by his own labor
benefits himself. Unknowingly, he also benefits society, because to earn income
on his labor in a competitive market, he must produce something others value.
This concept is at the core of a competitive capitalist economy and we Americans
love capitalism. Wal-Mart has proven its genius at competition ... its system
allows it to sell products at a price most competitors cannot meet and still
make a profit. So why have we capitalists begun to be so critical of Wal-Mart's
competitive success? What's wrong with this picture?
After you've covered the assignment material,
I'd like you to send me an essay that answers the question in the documentary's
title -- Is Wal-Mart Good for America?
Your answer to that question may be as long or as brief as
you want but it must pass two tests.
First, your answer must exhibit an understanding
of economic concepts. Make specific and detailed connections to course
Second, your answer must reflect the
information given in the assignment, both from the video and readings
and from the information on Adam Smith. Use what you learned from the
assignment to make your case. Too, while I welcome you to include your
opinions as part of your comments, those opinions must have some basis
in fact. This is the time to demonstrate some critical thinking!
Please be careful to use correct spelling