Differentiating Between Market Structures Of Wal Mart

The following case study is in regards of economic market structure. In the world of economics all businesses or companies rather, are categorized in certain market structures such as monopoly, oligopoly, or perfect competition, for instance, the market structure for restaurants. Most restaurants are considered monopolistic competition. Being that they all sell and serve food. They have to have instances that vary such as price, logos, servers, locations, décor, types of food, and hospitality.

Characteristics of different business markets include: General market description, business opportunity, market segmentation, market size & trends, competition, customer profile and business environment. Looking at the different characteristics can help evaluate the market, this can be achieved by dividing the market into specific segments: by geographical market: by customer type: such as industries, professions, age. Evaluate the market size and trends by breaking the market into segments. This is often done to help assess who is the competition and how strong it may be within its own field.

This would be “a market structure in which a few firms dominate” (Economics Online, 2015). When this occurs the market takes on a different appearance that is said to be highly concentrated because there may be several businesses operating in the same market. Heavy hitters in the retail industry would be mass merchant entities such as Wal-mart, Costco, and Target. These massive retailers have a share interest in controlling the retail market by manipulating various barriers of entry. Similar to those barriers of entry that are associated with a monopolized market, higher costs and such, these giants can also manipulate pricing to ensure that a newcomer could not compete. Price undercutting or predatory pricing may be done even at a loss for these retail giants if means keeping the oligopoly market structure with fewer new competitors. Various may be use these oligopolists strong name and customer loyalty base. Often times an oligopoly may experience a kinked-demand curve where there are two distinct segments with different elasticities that combine to form a kink. The kinked-demand curve is a good way to explain price rigidity in oligopoly where one segment is relatively more elastic in prices increasing and the other segment is less elastic in prices decreasing. “The relative elasticities of these two segments is directly based on the

1) An Oligopolistic market structure is a structure where very few large businesses sell a particular standard Good or differentiated Good, and to whose market entry proves difficult. This in turn, gives little control over product pricing because of mutual interdependence (with the exception of collusion among businesses) creating a non-price competition meaning they are the ‘price setters’. A good rule to help classify an

There are many models of market structure in the field of economics. They include perfect competition on one end, monopoly on the other end, and competitive monopoly and oligopoly somewhere in the middle. In this paper, we will focus on the oligopoly structure because it is one of the strongest influences in the United States market. Although oligopolies can also be global, we will focus strictly on the United States here. We will define oligopoly, give key characteristics important to the oligopoly structure, explain why oligopolies form, then give an example of an oligopoly in today’s economy. Finally, we will discuss the benefits and costs in this type of market structure.

In the movie clip, Kathleen Kelly , owns a children’s bookstore and she is trying to compete with Joe Fox. Joe Fox, owns a new large superstore bookstore and is Kathleen competition. The movie appeared

The dollar store industry caters to low-, middle-, and fixed-income buyers who are price sensitive. Regarding consumables, buyers are looking for the best bargain for an item that they will need to purchase again in the near future. The high threat of customer buying power drives profitability down. In contrast to buyer power, supplier power is low. This is due to the large number of suppliers that offer price-competitive, undifferentiated products. Suppliers must rely on the retail industry to sell their product, so forward integration is unlikely. The low threat of supplier power increases profitability. The threat of substitutes is medium. Since extreme-value retailers offer a focused assortment of goods in a small-box format, mass retailers such as Wal-Mart and Target are substitutes rather than competitors. On one hand, mass retailers have a larger assortment of branded goods, economies of scale, and are highly price competitive with extreme-value retailers. On the other hand, extreme-value retailers are more convenient due to the small-box format, allowing a customer to get in and out quickly. The products being sold are undifferentiated so price-performance tradeoff is low. The threat of new entrants into the industry is medium. There are areas of the U.S. with no extreme-retail presence, making it easier for a new entrant to open and capture market share. On the demand side,

Grocery industry is a highly competitive market with thin profit margins. Super markets are dominant players in the grocery industry. They use grocery offerings to drive traffic to their higher profit margin retail items. With its operations efficiency, Walmart, the largest grocery retailer has been able to offer significant price drops. This also forces other grocery stores to drop prices which keeps the profit margin thin. Even with all the advantages of operational efficiency and economies of scale, Walmart’s share in grocery sales was down at 51% in 2011.

The organization and characteristics of a specific market where a company operates is referred to as market structure. While markets can basically be classified by their degree of competitiveness and pricing, there are four types of markets i.e. perfect competition, monopolistic competition, monopoly, and oligopoly. In perfect competition markets, many firms are price takers whereas monopolistic competition markets are characterized by the ability of some firms to have market power. In contrast, oligopoly markets are those in which few firms can be price makers while monopoly market is where one firm can be a price maker.

The development of the Internet and more specifically the business website has seen brand recognition by consumers escalate to never before seen heights. Because of this brand recognition, it has become important for businesses to design their websites to reflect their overall marketing strategies. This is especially important in the retail world. All retail businesses have a similar overall marketing strategy of generating sales and retaining the customer for future sales. Most of the retail giants still greatly rely on the success of their brick and mortar stores to turn a profit. However, internet sales for these brick and mortar stores have increasingly risen over the last few years to compete with the retail stores like Amazon that are strictly internet based businesses. Brick and mortar retail stores, such as Walmart, Target, Kmart, and Nordstrom, have each designed their websites to reflect the overall retail marketing strategy as well as the individual marketing strategies that have made their brick and mortar businesses successful.

To be the world 's largest low cost store that carries all types of merchandise for all possible consumers.

Stores like Wal-Mart are famous for keeping their prices so low. This is one reason why they are able to maintain a grip on the consumers of an area. They accomplish this by keeping the cost to produce and transport the goods low. In January, a study by the Los Angeles County Economic Development Corp. found that, “an individual family could save $589 a year on groceries by shopping at a supercenter. Overall, shoppers could save $3.76 billion in merchandise nationwide.” (Blazier, A, 2004) A major reason they can keep prices lower than mom-and-pop run businesses is their ability to buy merchandise in bulk. Buying in bulk works the same way it does for a consumer. The more of a product that is purchased, the less the cost is per unit. Consumers see this every day when they go to stores like Sam’s Club or Costco. When they buy their merchandise in bulk, they are able to offer it to the consumer at a lower price. (Kale, 2011) This is what could eventually drive the mom-and-pop owned businesses out of the area, and draw a negative criticism from the public. The interesting thing about this criticism is that the public complains about Wal-Mart

Wal-Mart Stores Inc. helps individuals around the globe spare cash and live better - at whatever time and anyplace - in retail locations, online and through their cell phones. Every week, more than 245 million clients and individuals visit our almost 11,000 stores under 65 flags in 28 nations and e-trade sites in 11 nations. With financial year 2015 net offers of $482.2 billion, Wal-Mart utilizes 2.2 million partners around the world. (Wal-Mart Corporate) Wal-Mart is a superpower in the business world and has been that way for 50+ years. Understanding how it got to this point and how it has maintained its successful business model starts with its

They almost have complete control over their suppliers’ prices. In many ways it is a double-edged sword. Companies and entrepreneurs are able to reach their highest sales and profits once they get their products on the shelves of Wal-Mart’s stores. However, they have little to no say in the price at which their products will sell. Wal-Mart has used their incredible market power to dictate prices in the retail industry. Appropriately, Wal-Mart uses their advantage in terms of price in their marketing and advertising campaigns. If you type in the simple phrase, “low prices” into a Google search, the first hit that appears is Wal-Mart. Whether or not Wal-Mart actually offers lower prices on all of their products is a topic up for debate, but the battle where Wal-Mart has clearly emerged victorious has been in the arena of public perception. When the average consumer thinks of the simple phrase, “low prices” the first thing that comes to their mind is Wal-Mart, as evident of the Google search experiment.

Different market structures are basically compared by the number of competing firms and the extent of entry barriers.