Price and Rubbermaid

Abdul Javeed Sociology 300 February 14, 2010 Wal-Mart analysis Wal-Mart can be analyzed using both Structural Function and Social Conflict theory. Structural function theory believes that society is a complex system of interconnected and interrelated social structures each having a function and working together to promote social stability. There is an inherent tendency to balance and equilibrium. The following three points define why Wal-Mart can be analyzed using Structural function theory: They keep their prices low but make profits on high volume and fast turnover. Wal-Mart is most admired for its reputation in cost cutting and low prices. Wal-Mart is known to have very low and cheap prices for their products. It stops the need to go look for a bargain at other stores because we know that we won’t find a better deal elsewhere. This way we not only save money but time and gas too. Driving around to different stores to buy all the products is time and gas consuming. Low cost imports from Asia were vital components for Wal-Mart’s low opening price point strategy. Social Conflict theory believes that society is not integrated but actually full of unequal divisions. It has scarce and limited social resources PWP. It is in constant competition for them and conflict Is the result. Thus the emerging social structures benefit some in obtaining or retaining PWP at the expense of others. The following three points define why Wal-Mart can also be analyzed using Social Conflict theory: America’s best known brand Rubbermaid, maker of plastic containers, garbage bins was virtually in every home in one way or another. Rubbermaid supplied to big chains like Wal-Mart. Rubbermaid was struggling to maintain its ambitious growth targets. Then suddenly the material cost for Rubbermaid increased and hence they had to increase the price of their products. Some retailers agreed with the price increase but Wal-Mart did not. So it was the first signs of declines for Rubbermaid. Wal-Mart pullback was a blow to Rubbermaid and later its plant closed. Close to 1000 jobs were lost at Rubbermaid. Rubbermaid with its reputation of quality was most admired. Wal-Mart with its reputation for cost cutting was most admired. Hence Wal-Mart used its PWP to control Rubbermaid and indirectly let it shutdown. It had power over Rubbermaid and forced it to lower its costs. Rubbermaid couldn’t do it and so Wal-Mart stopped doing business with them, and so Rubbermaid shutdown. Wal-Mart used its PWP and by this a proud American Company was shutdown and many lost jobs. Impact of Chinese export boom has been felt all over USA. Wal-Mart used it PWP to indirectly shutdown a company called Thomson Consumer Electronics which was an American Television Manufacturer. Thomson stated to see a sharp foreign competition; they saw Chinese products being sold at a price that most American manufacturers couldn’t manufacture at. Five electronics sued the Chinese TV manufacturer but was stunned to see that Wal-Marttook the side of Chinese manufacturer. But Thomson plant shutdown and lot of people lost their jobs due to Chinese competition. Wal-Mart used its PWP and was bringing in cheap Chinese imports and so caused American manufacturer hard to keep in competition.