Wal-Mart is a price maker, as any monopoly would be. The company is famous for dictating prices to its suppliers. However, with regards to buyers, Wal-Mart is not a price maker. It is reasonable to assume that the company can raise some prices somewhat without losing market share; it is not true that they can raise all prices near indefinitely without losing market share. Wal-Mart has a captive audience, so they could raise their prices without significantly compromising their business, but other competitors would be able to exploit those increases and customers would be able to take their business elsewhere.
The demand curve for a true monopoly is negatively sloped, as is Wal-Marts, but Wal-Mart would lose all of its customers if it raised its price high enough, whereas a true monopoly would not. Indeed, a true monopoly seeks to maximize profit by finding the position on the demand curve where incremental increases in profit meet incremental decreases in demand from the higher price. Wal-Mart seeks to sell at the lowest price. This may not correspond with that position on the demand curve. They do this because it fits with their overall business strategy. Additionally, Wal-Mart does not take advantage of opportunities for price discrimination, as a monopoly typically would.
Another difference between Wal-Mart and a monopoly is that monopolies tend to be inefficient. This is because they have no competitive threat. Wal-Mart, however, is driven by competitive threat. That sense of being under threat is part of the corporate...
Wal-Mart Nation The dream of Sam Walton was a simple one: "Give people high value, low prices and a warm welcome" (Walton, 2003). At an early age, he was working hard delivering what the customer needed and wanted at a reasonable price - newspapers and selling milk from the cow (Huey, 1998). The development of Wal-Mart, KMart, and Target has brought about a retail business that is highly competitive within the
In a controlled market, the monopoly company will be capable of running the business without paying any attention to the affected parties (customers, employees, suppliers). Americans themselves have initiated a movement against the colossal power of Wal-Mart, suggesting that it should change its business conduct. "The truth is that Wal-Mart has let America down by lowering wages, forcing good paying American jobs overseas, and cutting costs with total disregard
Mergers can also help at least come domestic companies become competitive with international ones. Mergers potentially free up increased money for research and development. Yes, it is possible for mergers to be beneficial overall. There is no blanket yes or no judgement that applies to whether or not mergers are beneficial. They are generally beneficial if the above conditions are met along with the following conditions: There remains sufficient competition
Since the monopoly controls so much of the market share, the producers of goods have no choice other than to sell to the firm at lower prices, meeting their demand. This causes the market to stagnate, in that the producers of the goods must increase their production, but lower their margins (Federal Trade Commission, 2002). The same occurs for merged companies. Regardless of the type of merger, the end result
Building Community with Wal-Mart Wal-Mart’s impact on a community’s economic health is unambiguous. It offers a fair amount of benefits to communities that are destitute. Most of these boons are purely in terms of its pricing models. Specifically, Wal-Mart is able to consistently deliver the lowest prices around for its goods. Moreover, it offers a diversity of items that make it ideal for one-stop shopping in impoverished communities. Thus, those who
Wal-Mart is the world's largest retailer, and it has been significantly affected by the forces of globalization. This paper will consider those forces in the context of both the company's vision and in terms of organizational theory. Globalization Wal-Mart has been opportunistic in its approach to globalization. The company famously has become the subject of studies on globalization not just for its retail reach but for its supply chain management. Wal-Mart's vision
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