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Wal-Mart Effect
Josh Hanshaw
20th Century Innovation
Dr. Bowles
March 10th, 2012
Q1) How did Wal-Mart grow its Pharmacy business? Who did they learn from? Give specifics.
In 1981 Clarence Archer was hired by Wal-Mart. He was a 48 year old previous pharmacist and current pharmacy manager at Kroger’s. His job was to take one of Walton’s secondary projects, Dot Discount Drugs, and make it a permanent fixture of Wal-Mart. When Archer joined up Wal-Mart had 300 stores, 16 pharmacies and space for another 100 should they choose to end the lease on the current tenants (Fishman, 2006, p. 38). So there certainly was a lot of promise for such high ambitions, but there were also hurdles. Wal-Mart had real competition to contend with, as well as consumer stereotypes to break or change.
Archer moved slowly at first focusing primarily on price and people. Another key move by Archer that later proved vital, “was to hire the number-one pharmacist in the market. People will follow their pharmacist because of the way a good pharmacist communicates with you. When we would open a new store, we would hire the best pharmacist in town, no matter the price” (Fishman, 2006, p. 41). Wal-Mart moved aggressively both with their price point (coupons/incentives), and their overall pharmacy openings. Today Wal-Mart continues to dominate the market. In Sept. 2006 Wal-Mart introduced a $4 prescription program, as well as a $10 program on 90-day supplies to over 300 generic medications (Wal-Mart, 2010).
Q2) Explain why you think the author uses Makin Bacon to illustrate how Wal-Mart has changed the supplier/manufacturer relationship. I think the author uses the example of Makin Bacon because it epitomizes the change in dynamic due to the unique surrounding circumstances. Makin Bacon was a small start-up company between a father and daughter. Successes before Wal-Mart were incremental with high and low periods of volume. The agreement with Wal-Mart proved to be a game changer. As the
Josh Hanshaw
20th Century Innovation
Dr. Bowles
March 10th, 2012
Q1) How did Wal-Mart grow its Pharmacy business? Who did they learn from? Give specifics.
In 1981 Clarence Archer was hired by Wal-Mart. He was a 48 year old previous pharmacist and current pharmacy manager at Kroger’s. His job was to take one of Walton’s secondary projects, Dot Discount Drugs, and make it a permanent fixture of Wal-Mart. When Archer joined up Wal-Mart had 300 stores, 16 pharmacies and space for another 100 should they choose to end the lease on the current tenants (Fishman, 2006, p. 38). So there certainly was a lot of promise for such high ambitions, but there were also hurdles. Wal-Mart had real competition to contend with, as well as consumer stereotypes to break or change.
Archer moved slowly at first focusing primarily on price and people. Another key move by Archer that later proved vital, “was to hire the number-one pharmacist in the market. People will follow their pharmacist because of the way a good pharmacist communicates with you. When we would open a new store, we would hire the best pharmacist in town, no matter the price” (Fishman, 2006, p. 41). Wal-Mart moved aggressively both with their price point (coupons/incentives), and their overall pharmacy openings. Today Wal-Mart continues to dominate the market. In Sept. 2006 Wal-Mart introduced a $4 prescription program, as well as a $10 program on 90-day supplies to over 300 generic medications (Wal-Mart, 2010).
Q2) Explain why you think the author uses Makin Bacon to illustrate how Wal-Mart has changed the supplier/manufacturer relationship. I think the author uses the example of Makin Bacon because it epitomizes the change in dynamic due to the unique surrounding circumstances. Makin Bacon was a small start-up company between a father and daughter. Successes before Wal-Mart were incremental with high and low periods of volume. The agreement with Wal-Mart proved to be a game changer. As the
References: Fishman, C. (2006). The wal-mart effect. New York, NY: Penguin Books. Grant, T. (2011, January 25). The wal-mart effect: food inflation tame in canada . The Globe and Mail. Retrieved from http://www.theglobeandmail.com/report-on- business/economy/economy- lab/daily-mix/the-wal-mart-effect-food-inflation-tame-in- canada/article1882175/ Prevor, J. (2007, September 14). Wal-mart’s ‘save money — live better’ slogan is step in right direction. Retrieved from http://www.perishablepundit.com/index.php?date=09/14/07&pundit=1 Wal-Mart. (2010, June). What to know about wal-mart pharmacy. Retrieved from http://walmartstores.com/media/factsheets/fs_2756.pdf WalmartOregon. (2011). New and expansion store plans. Retrieved from http://walmartoregon.com/new-and-expansion-store-plans/