Wal-Mart Domination Wal-Mart is the largest corporation in America and has stores throughout the country and world. Many people have different thoughts and viewpoints of Wal-Mart and the debate over whether it is good or bad for America is still in question. Wal-Mart is the second largest job supplier in the United States behind the government. However it pays their employees minimum wage which is nearly impossible to live off of especially if you have kids. Wal-Mart like to portray itself as a seller of American products however the main problem is that it outsources all of its work and is full of shelves with items mad in foreign countries, mainly China.
Adaptation Strategy Wal-Mart has recognized the shift in the spending habits of our consumers. They have realized that many consumers no longer purchase the products they want, but strictly the products they need. Wal-Mart’s strategy is to provide the products in high demand at the lowest possible cost. The company adhered to their strategy by implementing tactics such as, increasing the inventory in areas of necessity, such as food, health, and beauty, and decreasing the inventory on items such as apparel and home décor. Food consumption is not an option; it is essential.
Wal-Mart is one of the largest companies in any industry in the word. Its philosophy started with Sam Walton’s idea of one pre-Wal-Mart 5-and10-cent. However, the fact that it is one on the most successful retailer has not exempted this company to several problems in the last decades. One of the first problems Wal-Mart had to confront was when its employees claimed that they work for Wal-Mart without receiving any compensation. The lawsuits continued in 2001, when additional lawsuits were filed against Wal-Mart for refusing to pay overtime to workers and failing to compensate workers when they work during their schedule brakes.
There are, in reality, many more hidden costs to look at; ergo, the $1.00 one pays in the supermarket differs hugely from the “actual price” of the Twinkie. Hiding all these costs from consumers is a practice major corporations have upheld for years: they distance themselves from the processes used to manufacture and distribute their products (Robbins). Instead of producing honest products in the United States, major companies obscure the real cost of commodities by geographically distributing these costs as widely as possible, over as many countries as possible. The hard
There was not one dominant player within the industry; they were more equally balanced thus increasing rivalry. The High fixed cost for running a discount store resulted in an economies of scale effect, this can be seen when Wal-Mart decided to gain economies of scale by building their own distribution centres to add value. Going public in order to finance the extra storage was important for Wal-Mart to utilise capacity as efficiently as possible, they did this by creating distribution hub around 15-20 stores. The increased rivalry continues, this was due to the low levels of product differentiation and little in the way of own branding, products were standard in nature through all discount stores. Also the low switching cost and consumer awareness of shopping around to find the best bargains increased competition around stores to capture customers.
As such, all the major discounted retail stores started vying for each other in the same location, hence the competition among them remains very strong. * Substitute Products: LOW Because of products being sold for daily use, there are no direct substitutes. The only competition which such discounted stores face is the threat from the products available in the gray market which may
Unionization of Wal-Mart in China Even though A Wal-Mart union will alleviate employer-employee debates and attract a more pleasurable option for new employees, Wal-Mart has not been unionized in the United States for very valid reasons. Unionization of Wal-Mart in the United States will raise retail prices due to financial demands placed on the company by its employees. Non-unionizing of Wal-Mart in the United States has created an extremely successful organization thus far. For millennia, the Chinese have had a high self-esteem and pride in their society and history. Appropriately, the name of their ancient country translates as “the middle kingdom,” (dictionary.com) or center of the world.
While other competitors, such as Target, operate in the same market trying to attract consumers looking for low prices and conveniently giving customers the access to a one stop shopping store. Though the largest company and one of the most successful, Walmart can make improvements. The key problem for Walmart has to do with the negative treatment of employees causing a high employee turnover. Walmart’s success has come from its well know low prices and extreme variety of products allowing customers to get all their shopping done in one place. The company continues to employ new IT systems to track sales and allow managers to compare their store’s success to others.
There are many suppliers in the retail industry. Large firms like Wal-mart can easily affect these suppliers. • Wal-Mart purchases huge quantities of products from its suppliers • Low switching costs from one supplier to another • Products have a lot of substitutes • Almost all the products are not critical for Wal-Mart. • Large population of suppliers • Tough competition among suppliers • High availability of supply Potential entrants / Barriers to entry: HIGH New entry of retail firms is easily achieved even in the presence of giants like Wal-mart. Small retailers can enter the market and compete on the basis of convenience, location, specialty, and other factors.
Argumentative Essay The bottled water industry is an $8 billion industry. In the United States, people are drinking more bottled water than milk or beer. This is a huge issue because according to a recent study, “only about 23 percent of the water bottles used in America are actually recycled.” It is important for the millions of people around the world to know that the water they are drinking from their bottle is not different than the water coming from their sink. Bottled water poses many health and environmental dangers. Bottled water is also very damaging to people’s wallets.