Wal-Mart Csr Initiative
[Type the company name] | Wal- Mart CSR Initiative | Case Analysis | | [Type the author name] | 10/30/2010 |
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Case 1: Wal-Mart’s Sustainability Strategy
Q. Given the fact that Wal-Mart’s Customer’s are unwilling to pay a premium for environmentally friendly products, how is the company deriving business value from its sustainability strategy or if not, how can it ensure that it does?
Ans: Wal-Mart’s sustainability strategy has further improved its already efficient supply chain, resulting in tangible benefits to the society and the environment. In the very first year of its implementation, the strategy generated more than $1B in profits. The main business values derived from this strategy are as follows: * Improvement in fuel efficiency for its logistics network: Wal-Mart reduced the fuel usage of its 7000 trucks by 8 percent by putting auxiliary power units in the rigs to stop idling engines during loading or breaks. This initiative resulted in annual saving of $ 25M and reduced CO2 emissions by 100,000 metric tons. Building on this success, logistics network set an ambitious goal to achieve 25 percent improvement in fuel efficiency by 2007. This would save the company $75M annually and reduce CO2 emissions by 400,000 tons on yearly basis. * Consolidation in value chain: seafood network expects to reduce supplier costs through standardised packaging, reduced paper work and improved transportation efficiencies. These changes are estimated to result in $14M in increased revenue and an additional $4.3 million in profits annually. In addition, textile network considers eliminating organic cotton suppliers from its value chain and negotiating directly with farmers to drive cost down and pass on the benefit to customers. * Waste reduction and Waste minimisation: Wal-Mart used to spend nearly $16M annually to dispose plastic waste. However, sustainable initiatives helped it to reduce the plastic waste by 72 million pounds per year.
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Case 1: Wal-Mart’s Sustainability Strategy
Q. Given the fact that Wal-Mart’s Customer’s are unwilling to pay a premium for environmentally friendly products, how is the company deriving business value from its sustainability strategy or if not, how can it ensure that it does?
Ans: Wal-Mart’s sustainability strategy has further improved its already efficient supply chain, resulting in tangible benefits to the society and the environment. In the very first year of its implementation, the strategy generated more than $1B in profits. The main business values derived from this strategy are as follows: * Improvement in fuel efficiency for its logistics network: Wal-Mart reduced the fuel usage of its 7000 trucks by 8 percent by putting auxiliary power units in the rigs to stop idling engines during loading or breaks. This initiative resulted in annual saving of $ 25M and reduced CO2 emissions by 100,000 metric tons. Building on this success, logistics network set an ambitious goal to achieve 25 percent improvement in fuel efficiency by 2007. This would save the company $75M annually and reduce CO2 emissions by 400,000 tons on yearly basis. * Consolidation in value chain: seafood network expects to reduce supplier costs through standardised packaging, reduced paper work and improved transportation efficiencies. These changes are estimated to result in $14M in increased revenue and an additional $4.3 million in profits annually. In addition, textile network considers eliminating organic cotton suppliers from its value chain and negotiating directly with farmers to drive cost down and pass on the benefit to customers. * Waste reduction and Waste minimisation: Wal-Mart used to spend nearly $16M annually to dispose plastic waste. However, sustainable initiatives helped it to reduce the plastic waste by 72 million pounds per year.