Since Wal-Mart has effectively eliminated Supplier Power, it is also
important to consider the state of their relationship with suppliers. In many
ways, Wal-Mart has changed the dynamic of the supplier and buyer
relationship. Joe Galli, Newell CEO, was quoted as saying, “The days of price
increase are over.”[4] Often times, Wal-Mart will tell their suppliers upfront
what they will and will not pay for a good.[5] However, despite the fact that
Wal-Mart has removed the possibility for supplier price increase, their
suppliers generally feel one of two ways about Wal-Mart. The first supplier
sentiment is serving a client like Wal-Mart forces a company to become more
efficient.[6] Many suppliers feel that doing business with Wal-Mart is the
equivalent of entering a corporate basic training exercise. Robin Prever, who
was CEO of Saratoga Beverage Group, was quoted as saying that this
relationship with Wal-Mart, “… wakes everybody up. And all our customers
benefited. We changed our whole approach to doing business."[7] The
second sentiment of suppliers is that Wal-Mart is the big brother who likes to
push them around. In some instances when suppliers have attempted to
raise prices, Wal-Mart has either denied their request or they also been
known to pay the same previous amount to their supplier with no questions
asked.[8] An example of this situation is Wal-Mart’s relationship with Vlasic,
who was “forced” by Wal-Mart to sell pickles in gallon containers for under
$3.00 a jar. Making only pennies a jar and watching their supply of pickles
dwindle, Vlasic attempted to negotiate a price increase for their product with
Wal-Mart and was denied causing a loss of millions of dollars for Vlasic.[9