Sage Journals | Walmart’s Emergent Low-Cost Sustainable Product Strategy
Abstract
This article traces the strategic initiatives that Walmart undertook over the last decade to implement its ambitious vision of selling more sustainable products. This effort has been characterized by a gradual shift away from customer-facing initiatives aimed at labeling sustainable products toward supplier-facing initiatives targeted at improving environmental or social performance without raising customer prices. It highlights the role of institutional intermediaries, transaction costs, and experiential learning in shaping firms’ capabilities to translate ambitious sustainability goals into operable, mass-market initiatives.
“What if [Walmart] used our size and resources to make this country and this earth an even better place for all of us: customers, Associates, our children, and generations unborn? What would that mean? Could we do it? Is this consistent with our business model? What if the very things that many people criticize us for—our size and reach—became a trusted friend and ally to all?”
—H. Lee Scott, Walmart CEO, October 23, 2005
Lee Scott’s 2005 speech, announcing the company’s far-reaching corporate sustainability strategy, is often cited as an example of what companies can do to move large-scale sustainability initiatives to the mainstream.1 In his inaugural speech, Scott acknowledged, “As one of the largest companies in the world, with an expanding global presence, environmental problems are OUR problems.”2 He then identified three goals to direct Walmart’s future strategies: produce zero waste, be fueled by 100% renewable energy, and sell products that sustained people and the environment. Scott acknowledged the experimental nature of the endeavor, noting, “These goals are both ambitious and aspirational, and I’m not sure how to achieve them . . . at least not yet.”
In this article, we present the findings of a multi-year project to trace the strategic processes that Walmart undertook to implement Lee Scott’s vision, focusing on the third goal to “sell products that sustained people and the environment.” Like other research that examines processes of organizational change and learning during the implementation of sustainability programs,3 we analyze Walmart’s lessons learned from an “emergent strategy” perspective that suggests that corporations often update and adapt their original plans as managers learn from experience over time.4 Based on this perspective, we view Lee Scott’s speech as starting an ambitious search for initiatives to translate his ambitious sustainability vision into concrete, measurable results. Our research was designed to identify Walmart’s own lessons learned during the first decade of its sustainability journey.
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