Tuesday, February 21, 2006

I know that Wal-Mart is getting into other business a lot. Especially, I’m interested in its starting in the banking business. If Wal-Marts are going to start banking, Wal-Mart and the consumer will have a lot of benefits and it is going to be convenient for people. However, there are also a lot of problems with making banking in Wal-Mart. According to D. Irvin (2005), Wal-Mart wants to have banking in their stores, which would make more customers attend. Wal-Mart has more than one thousand bank branches. Workers of banks care mostly about their job; small bank owners are very worried about Wal-Mart though. Wal-Mart failed because small bank owners didn’t want that to happen; government didn’t either. Although there are people who disagree with Wal-Mart’s making banks in their stores, Wal-Mart believes it’s a good deal for both the Wal-Mart companies and customers. Wal-Mart has been known for their ongoing growth and expansion and would do anything to have their customers continue to return. M. Barbaro (2005) also said that the small banks are worried about Wal-Mart’s bank taking over their business and causing them to lose customers. They are afraid that Wal-Mart will build other banks, and afraid because Wal-Mart has a lot of customers. However, Wal-Mart is still continuing to build banking. .

We should encourage banking in Wal-Mart for three reasons. There are a lot more benefits than disadvantages.

First, if Wal-Mart has a bank, we can buy goods at lower prices than before because they don’t doesn’t have to pay a charge to the customers’ own bank. Now, a lot of customers use a card, especially a debit card in Wal-Mart, but their bank companies are different from Wal-Mart companies. Therefore, Wal-Mart is paying some cost to a lot of banks which are used by customers. However, if Wal-Mart makes its own banks, it need not pay money. Then, it is possible to sell things which have a lower price than before, because of no charge for other banks. If so, more and more customers are going to go to Wal-Mart to buy stuff than before. I think this is good for both customers and Wal-Mart. People can buy goods cheaper than before. In addition, if users increase, Wal-Mart can grow and be profitable. Also, it may give money which it gets to benefit stockholders. It may be possible to make new stores. Because there are a lot of benefits, it’s good to make bank in a Wal-Mart.

Next, if Wal-Mart has a bank, people can get benefits from tie-in promotions with the bank and the grocery. A lot of card companies execute that; when customers use their own card company card, they can get some points. After its points get full, the customer can get some coupon as money. Only making and using Wal-Mart’s own card, it has benefits for customers. In addition, when people make a debit or credit card, they need to provide private information like their name, address, birthday and so on. When company can get their information, they can send direct mail for sales or birthday cards for presents. Customers can get a lot of benefits if they have Wal-Mart’s own card.

Finally, if Wal-Mart has a bank, it can sell market things and loan money in Wal-Mart. If so, it will be very convenient for customers. At least, it can sell a car, a house or even a helicopter. I think that Wal-Mart is a very big company and there is a network so they can sell high-class goods. If there are loans, both people who have much money and not enough money can use Wal-Mart. Now, people who get low-income use Wal-Mart a lot because there are so many cheap goods.

Small banks are afraid of making a bank in Wal-Mart because they may lose their customers. However, there are a lot of benefits to making a bank in Wal-Mart. Therefore, we should accept making it and support it. When Wal-Mart has a bank, life may be more convenient for people than before.

Reference

Barbaro, M. (2005, Oct. 15). Bankers oppose Wal-Mart as rival. The New York Times. Retrieved from Lexis-Nexis, Jan-28, 2006.

Irvin, D. (2005, Sep. 1). Bankers warily watch Wal-Mart. Montgomery Advertiser. Retrieved from Lexis-Nexis, Jan-23, 2006.

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