In a recent article, Wal-Mart Executive stated that over 475,000 employees get paid over $25,000 as a means to show that they are well-paid employees. However, this created an outburst with the rest of the employees as they currently employ 1.4 Million people meaning that the others get paid less than this amount. Last week a large protest outside Wal-Mart arrested 50 people. Currently the Wal-Mart employees as well as the employees at Target are threatening to walk out on Black Friday.

This article shows the importance of keeping the workers happy and how important a good image for the company is. Therefore, when companies try to exploit low cost labour to save on overall expenses it may cost them a lot more in the end, with having to increase salaries and manage the reputation interpreted by the customers. Furthermore, another study showed that Wal-Mart can financial afford paying their customers a 50% increase in Salary as the CEO of Wal-Mart netted a staggering $23.2 million in 2012 and the gross profit is in the billions. Overall, an increase in pay may be what Wal-Mart need to do to save costs in the long-run.

Article: http://www.salon.com/2013/11/12/breaking_wal_mart_workers_strike_as_target_
workers_threaten_to_join_black_friday_walkout/

Financial Information: http://finance.fortune.cnn.com/2013/11/12/wal-mart-pay-raise/?iid=HP_River

PepsiCo, the world’s largest snack-food maker is going to invest 330 million rupees with its partners in India by 2020. The chief executive states that “India is a country huge potential” and that they aim to increase their product range sold in India. This enormous investment will both benefit PepsiCo and India, with a future forecast of creating over 100,000 jobs to the Indian economy. India is already a rapid growing economy and therefore the decrease in unemployment rates in India will further boost their economy.

This will also aid PepsiCo as India has a very high rate of unemployment and therefore the labour market will have a lower wage rate. Therefore, PepsiCo will benefit from low labour costs and economies of scale as well as gaining new customers in untapped market stating that they will focus on rural areas of India. “We’ve only scratched the surface of the long-term growth opportunities that exist for PepsiCo and our partners.”  The U.S. company, which opened its first operations in India in 1990, also is going to start to recruit Bollywood actors as brand ambassadors to get a greater share of India’s snack market.

http://www.bbc.co.uk/news/business-24898994

PepsiCO Marketing Campaign with Indian Actress

Sears Canada Inc, said it would sell 50% of it’s stake in eight Canadian properties. Sears a struggling retail store, has suffered a steep decline in same-store sales and has lost a lot of its market share through tough competition from U.S retail giants Walmart and Target. Therefore, in order to stay open and continue, Sears has decided to sell them to Montez Income Properties Corp, a company which invests in real estate.

This sale will liquidate a lot of the assets that Sears currently owns and will help cash flow problems. However, the cost of this will be over 1,100 jobs lost at the stores that will be closes down. This may cause company image and reputation problems as well as large redundancy costs. Sears is likely to further lose market share and control. The joint-venture assets however was stated to remain the same as “selling to Montez impact neither our store operations nor our ability to serve customers.”

http://www.thestar.com/business/2013/11/11/sears_sells_stake_in_8_properties_
but_says_it_will_keep_stores_open.html