Global Communications Benchmarking Study

Global Communications Benchmarking Study

Increasing profitability while using cost-cutting measures can either fail or succeed depending on the strategic plan, especially when a company plans to go international. Global Communications is very similar any other corporation finding itself in a situation where operations must change. The Global Communication senior leadership team developed an aggressive approach to remedy their financial losses. Global Communications will offer new video and satellite services to its small business and residential customers and will need to create call centers in India and Ireland to support them in going global.

Global Communications must downsize in its domestic centers to move forward. Some current call center representatives will be relocating for the expansion. Employees are estimating an average of 10% cuts to their current salary as stated in the scenario. This is a crucial issue with the labor union and workers. The question is will Global Communications increase profitability in the long run due to this plan to downsize. Global Communications needs to identify potential solutions to its problems by analyzing six companies in other industries with similar issues whether successful or unsuccessful.

Global Communications Benchmarking Companies Researched

Wal-Mart

Wal-Mart Stores, Inc. prides itself on one philosophy: “to offer the lowest possible prices to its customers. They provide a wide array of products including toys, groceries, jewelry, electronic, children, ladies, and men apparel. Mr. Sam Walton opened the first Wal-Mart store in 1962.”(Frank, 2006). Mr. Walton took a neighborhood store and turned it into the largest grocery store and discount department retailer in the United States.

Wal-Mart Stores, Inc and Sam’s Club operates retail and wholesale stores in various formats worldwide. In order for Wal-Mart Stores, Inc to become the largest grocery store and discount department retailer in the United States and abroad their communities have paid an extremely high price. It seems that American’s (their customers and employee’s whom they pride themselves on) have to take second place to their bottom line.

Wal-Mart Stores, Inc have faced many negative issues when in comes to their communities, their employees and their bottom line dollars. Two of there biggest problems are Wal-Mart failing to provide affordable healthcare and outsourcing to increase their bottom line.

Although Wal-Mart Stores, Inc is the largest retailer with over 1.2 million employees they do not provide affordable heath insurance to nearly over half of their employees (Frank, 2006). Wal-Mart Stores, Inc healthcare plan has high deductibles and hidden fees which their employee’s can not afford and they have strict eligibility requirements. There solution to this problem is to have the taxpayer help pay for their employees’ healthcare. President and CEO Lee Scott said "In some of our states, the public program may actually be a better value - with relatively high income limits to qualify, and low premiums." (Transcript Lee Scott Speech 4/5/05) Nearly 68% of the employees have had to rely on public health assistance (Frank, 2006).

In February 1985, Mr. Sam Walton contacted over 2,500 American manufacturers and wholesalers to let them know that Wal-Mart Stores, Inc wanted to purchase more goods made by American suppliers. He said: "We cannot continue to be a solvent nation as long as we pursue this current accelerating direction. Our company is firmly committed to the philosophy by buying everything possible from suppliers who manufacture their products in the United States." Unfortunate for the American people, over 80% of Wal-Mart Stores, Inc has 60,000 global suppliers are based in China. (Wal-Mart Press Release, 3/13/85; PBS Frontline, 11/16/04) Amy Wyatt, leader of the international corporate affairs division, said “"In the United States, our local sourcing is not as high as 90 percent," she said, “The manufacturing just doesn't exist." (Tico (Costa Rica) Times, 3/17/06) To keep prices low for the customer’s benefit, Wal-Mart Stores, Inc felt their option was to source goods from China and other countries such as India where employment standards are low.

Nextel/Sprint

Nextel was founded by Morgan E. O' Brien, a Washington, DC, communications attorney. When Nextel arrived to the cellular phone market, Nextel changed it in many ways. Nextel had many first experiences in the cellular phone market: They were the first cell phone company to introduce unlimited calling plans to the customers. They were the first company to implement a nationwide push-to-talk,