Eco/365 Final Paper

Wal-Mart is by far one of the most powerful businesses in the world. It is the largest retailer and the largest private employer in the Unites States. The pressure imposed by Wal-Mart on prices, has raised concerns about its economic consequences on workers, communities, and rivals. This paper aims to enlighten some of the advantages and disadvantages of Wal-Mart’s impact on the United State’s economy. The paper begins by exploring the sources of Wal-Mart’s competitive advantage. It then analyzes some of the economic outcomes of Wal-Mart: how Wal-Mart stores affect local businesses and competitors, employees, consumers, and product selection.

Wal-Mart is a brand that is well known around the world, especially in the USA. It has gradually developed into the largest retailer in the world. Wal-Mart’s globalization efforts have been happening rapidly. But have they been successful in all aspects of their international expansion or not? This is the main thought that is going to be discussed in this essay. The questions I will be looking at are based on a case called “Wal-Mart takes on the world” from the book of International Business The Challenge of Global Competition eleventh edition – Ball, McCulloch, Geringer, Minor, and McNett. Questions are the following:

Walmart faced strong entrenched competition in Canada and Europe. In these developed countries, they couldn’t gain critical mass through internal growth, so they had to acquire companies that have been in the market already. They acquired Woolco, a money losing operation, applied many of the American business practices, and within a few years, the Canadian operations were successful. They have 317 stores, and they account for more than 35 percent of the Canadian discount and department store market. In Europe, Walmart entered Germany by acquiring the Wertkauf hypermarket chain in 1998 and entered the UK by acquiring the 229-store ASDA group. They the leader and are now losing ground to Tesco. A major problem for Walmart in the European market is overexpansion. Accompanied with the famous “Always low prices” approach, they met large resistance from the competition and regulators. Large price wars began because Walmart was accused of underselling the competition. They struggled to build a strong competitive base in German losing more than $1 billion. They were unable to create a competitive advantage, so they sold their operations to a competitor, Metro. They also faced problems in Korea, so

Because Wal Mart already have a lot of these expectations set in place, it is very important that the employees are educated and informed of the company mission and the culture of the company. For any company including Wal Mart it is very important that the employees are treated with respect and they are treated equal. The employees should also have a clear understanding that their success within the company would be rewarded. Wal Mart has set training programs for their employees.

Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents:

1. Name two types of market failure. Explain why each may cause market outcomes to be inefficient.

The sheer size of Wal-Mart allows them to negotiate better pricing from a manufacturer and/or shipping companies and pass those savings on to the customer. It is true that some small retailers may not be able to compete directly with Wal-Mart's pricing. Some critics also add, once Wal-Mart drives out competition in an area they will increase their prices. Wal-Mart enters with low prices and large selections then maintains those low prices. De Coster and Edmonds go on to ask, "Where is the evidence of Wal-Mart ever driving up prices after becoming established in the market” (633)? Wal-Mart must also compete with larger specialty retailers such as Home Depot and Lowes in the hardware/home improvement market, Bass Pro and Cabela's in the hunting/outdoor market, Sports Authority and Dick's Sporting Goods in the recreational sports market, and PetsMart and PetCo in the pet care market. These large retailers, due to their size, are also able to benefit

Walmart is one of the biggest companies in the world, but it also has extremely tough competitors. Currently Walmart is the largest retailer in most countries of the world for numerous reasons. For one, they supply a wide variety of items to be purchased that include entertainment, groceries, health and wellness, hardware, furnishing, apparel and many more. Walmart also has over 11,100 stores in over 27 countries according to Market Realist. These two reasons alone give Walmart a huge advantage over its’ competitors. Walmart has both strengths and weaknesses when it comes to its’ competitors not only across the nation, but across the world as well. Some of the main domestic competitors of Wal-mart consist of Target, Costco, Amazon, and the dollar store trinity. Along with that, Walmart has international competition such as Carrefour in France, Metro in Germany, Tesco in the United Kingdom, Loblaw Companies in Canada, and Ahold in the Netherlands. Although Walmart has competitors with all of these companies worldwide, it still remains the “#1 retailer in Canada and Mexico and has operations in Asia (where it owns a 95% stake in Japanese retailer SEIYU ), Africa, Europe, and Latin America”, according to Hoovers. Strangely enough, Walmart is growing more overseas than it is in the United States. Even with all these companies it has to compete with, Wal-mart’s total sales are still almost 5 times its’ competitors. As it generates a net sale of over $483 billion in one year,

17) Suppose the money multiplier in the U.S. is 3. Suppose further that if the Federal Reserve changes the discount rate by 1 percentage point, banks change their reserves by 300. To increase the money supply by 2700 the Federal Reserve should

On average Wal-Mart employees make $8.88. Many full time workers at Wal-Mart are forced to apply for public assistance. On average, Wal-Mart employees receive $5,815 per worker which is a total of $420,000 per store. This is money that comes directly from American tax money. While American tax dollars could be put towards advancing medicine or updating infrastructure, money is being spent on Wal-Mart employees who fall below the poverty line.

1. Which of the following statements concerning the long-run average cost curve of economic theory is true?

“Wal-Mart is the largest private employer in the nation and the world’s largest retailer. With 1.6 million workers, 1.3 million in the United States and 300,000 offshore.” (Article #4.4 in reader). Thousands of Wal-Mart stores across the United States of America are best known for their slogan there of everyday low-prices guarantee. Wal-Mart retailers are regarded by the general American public for the place to go to find everything from fishing gear to groceries at the lowest prices. However, to obtain these low prices Wal-Mart must cut expenses, which it does across the board, including the pay and benefits to its workers in the United States. Wal- Mart 's low prices do often save the consumer money at the counter when they purchase

Wal-Mart is the number one retailer in the world in both sales and earnings, dwarfing many of its retail competitors. It offers a full assortment of products ranging from clothing to electronics. It currently has 6000 locations predominately within the United States with over $312.4 Billion in net sales during 2006. In addition to its strong domestic presence, Wal-Mart has expanded aggressively to Canada, Mexico, and Puerto Rico with over 1000 locations within those countries. This expansion can potentially create greater economies of scale for Wal-Mart services and merchandise. The synergies created by expansion will also drive profitability in the future by providing goods and services at even lower costs to consumers. In order to enter foreign markets successful, Wal-Mart engages in both joint ventures and acquisitions. By utilizing this method, Wal-Mart intends to leverage foreign retailer's market knowledge with its own core competencies of merchandising and supply chain management (Stilgoe, 2003).

Wal-Mart is arguably the most dynamic corporation in the last 50 years in the United States, if not the world. Arising from its beginnings in Bentonville, Arkansas, it has grown to over 4,400 discount stores, super centers and corner markets worldwide. Wal-Mart continues to expand despite public criticism of its labor practices as well as complaints about their treatment of competitors. The many strengths of Wal-Mart, like their low cost production and marketing practices, will aid Wal-Mart as it continues to grow in the retail

Ans:Wal-Mart,Inc runs a chain of large, discount department stores.it is the world’s largest public corporation by revenue. Walmart is the largest private employer and the largest grocery retailer in the United States. Walmart is one of the best known industries all over the world. Its concentration of a single business strategy is the basis of its success over the decades by this strategy without having to rely upon diversification to sustain its growth and competitive advantage. The leading marketing strategies of Wal-Mart are low prices, service and smile. However by adapting this strategy, it has risked itself by putting all of a company’s egg in one industry basket. While its global strategy worked elsewhere, the results were bad in Germany and Korea that Wal-Mart withdrew from those countries.