Attention, Wal-mart Shoppers...
Wal-mart is doing something amazing. It's offering college degrees through a for-profit college to its employees.
I'm a big fan of for-profit higher-ed companies -- they're smarter, cheaper, more efficient, and a lot more relevant to today's technically-oriented, job-seeking student. That, of course, terrifies the community college higher-education monopoly. So through their compliant, wholly-owned subsidiary (the Obama administration) they're striking back.
So the question you have to ask yourself is, who do you trust more to deliver a relevant, enterprise-savvy education to a student looking for one: Wal-Mart, or the Obama administration? Which organization is more responsive to the marketplace? More in touch with the idea of customer service? More willing to change and adapt its offerings? Wal-mart, or the local community college?
What would happen if Wal-mart decided to open for-profit elementary and high schools? Hard to believe they wouldn't do a solid job of it.
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May '10
Re: Attention, Wal-mart Shoppers...
Faster, please....
May '10
Re: Attention, Wal-mart Shoppers...
Do you see how poorly Walmart treats its employees?
May '10
Re: Attention, Wal-mart Shoppers...
Well, the Wal-Mart employees I know like the place, and the wages and benefits offered by Target are virtually identical, but I see little if any complaining on-line by, or protests from, union-types regarding Target. I think we might have a little bit of a Food Lion game going on.
INRS, have you seen how many people line up to apply for jobs with that awful Wal-Mart every time they list an opening? Maybe they are just stoopid, I guess. Markets lie, don't they?
Re: Attention, Wal-mart Shoppers...
Walmart is enhancing its prospects by investing in its employees -- "human capital" in biz-speak -- which is good for the shopping giant, its employees, and society generally. I know it plays against type, at least the type depicted in Hollywood movies -- you know, the profit-at-any-cost sociopath poisoning the local water supply for the heck of it -- but there's nothing like the psychic payoff from taking a risk on a marginal entry-level employee who succeeds at the job and then advances through the ranks by dint of talent and hard work. The CEO by way of the manufacturing floor or entry-level sales job is the quintessentially American success story.
Re: Attention, Wal-mart Shoppers...
Here's a question. Walmart has been trying to enter the banking industry for years -- horrifying exactly who you think would be horrified if Walmart succeeded.
And until yesterday, it looked like Walmart had been effectively stiffed.
Enter Canada. As the WSJ reports, Walmart Canada confirmed yesterday "that it has received final approval from the Canadian government to establish a bank, which opens the door for the retailer to offer a much broader range of financial-services products."
What do we make of this? Free market, or suffocating behemoth? (Or both?)
Re: Attention, Wal-mart Shoppers...
James Poulos: What do we make of this? Free market, or suffocating behemoth? (Or both?) · Jun 4 at 6:30am
My threshold for "suffocating behemoth" has moved a good deal higher since the federal government starting running auto companies, reengineering the nation's healthcare system, nationalizing the banks and setting executive pay. So, I guess I'll go with free market.
May '10
Re: Attention, Wal-mart Shoppers...
In the 1970's, Sears Roebuck started "Sears Financial Services" by buying brokerages and finance companies to link to Allstate Insurance. They then founded a credit card company (Discover). The retail banking industry was frightened by the prospect of a new and different type of competitor.
Sears never made it work and eventually figured out that they were better off sticking with what they knew well and sold/spun it all off. They knew and could predict the market ebbs and flows of retail, but financial services was one step further removed from customers- too much depended on ever-changing government policies.
Wal-Mart may simply be better managers and match their market scope with their customer base, or they may regret this as too big a bite of the wrong kind of steak. My suspicion is that Sam Walton would have been skeptical.
Re: Attention, Wal-mart Shoppers...
I feel you, George, in a major way. But I worry. If our federal leviathan keeps raising our suffocation threshold, will Americans grow ever-more-forgiving of the market capture and market distortions that nourish private-sector behemoths? Some folks on the right and the left, on the other hand, are already wondering aloud if there's a coalition in the making against the culture and the politics of partnership between big government and big business.
Re: Attention, Wal-mart Shoppers...
James writes:
I think America's relationship to Wal-Mart is a lot healthier and more useful than its relationship to the federal government. The consumer banking business is entering a period of major consolidation -- which is a euphemism for "a lot of banks are failing or about to" -- and maybe the entrance of a large, disciplined retailer would be good for everyone: consumers, competition, that sort of thing.
Duane, I think your example of Sears Financial Services is spot on. It's a huge danger for the company. I hope, for the sake of Wal-Mart shareholders, that everyone in Bentonville has read this, from 1984.
My guess is that Wal-Mart will do a great job delivering simplified, basic consumer banking services. And that their traditional margin-squeezing ruthlessness with vendors will continue in this sector, too, which already is making me smile. Wal-Mart business practices investing depositor's money? I'm imagining investment bankers in $12,000 suits, sitting on fold-out chairs in spartan offices at Wal-Mart HQ in Bentonville, trying to drum up some business, getting their fat, unjustifiable fees sliced paper thin.
Edited on Jun 4, 2010 at 8:24amRe: Attention, Wal-mart Shoppers...
James Poulos
If our federal leviathan keeps raising our suffocation threshold, will Americans grow ever-more-forgiving of the market capture and market distortions that nourish private-sector behemoths? · Jun 4 at 6:59am
I am hoping for the opposite effect as Americans see first-hand the results of escalating government activism in the private economy. The truth is that crony-capitalism is abetted by government regulation. Wal-Mart is helped not hurt by most incremental regulations -- time to add another lawyer in the legal department -- while smaller would-be competitors are stymied by compliance costs, or just an uncertain regulatory approval timeline.
Re: Attention, Wal-mart Shoppers...
George, this is a great point. Large companies use government regulation strategically. It's just another way to keep competitors at bay, something to be budgeted for, like marketing and R&D. I wonder if anyone's ever managed to calculate the portion of our GDP devoted entirely to compliance -- everything from Sarbanes-Oxley to what you pay your tax guy to help with your personal return. I'd like to see that indexed: the Compliance Index, sort of like the Misery Index. It would be an interesting number.