Current Market Conditions Competitive Analysis
Current Market Conditions Competitive Analysis
ECO/365
March 4th, 2013
Week 3 team assignment
Current Market Conditions Competitive Analysis
Introduction
In a society that has seen historical economic fluctuations and shifts in one’s long-term employment, consumers are searching for the best bargains they can find. Consumers across the United States are looking for ways to save money; thus, searching for stores that will provide them with everything they need at a lower cost. Companies around the United States are fighting to stay competitive and are seeking ways to restructure their company, and still provide for consumers the best prices. It is within this economic backdrop that people will study a leader in low cost, high efficiency retailing - Wal-Mart. At the onset of the last two recessions, Wal-Mart had very little to do within their structure to fit the demands of consumers because Wal-Mart already offers its customers brand name items at lower prices. Wal-Mart’s basic structure has helped make it a powerful retail business, and a place consumer’s love.
Market Structure
Wal-Mart Stores Inc. opened its first discount store in 1962, Sam Walton had no idea his business would be the success that it is today. The reason for Wal-Mart’s success is their ability to create a basic and scalable structure for their business. Wal-Mart offers a variety of well-known brands and sells them between 5-10% cheaper than other retailers. This makes Wal-Mart a powerful force in the retail business. It is the belief that Wal-Mart is oligopolistic and as the class is learning, the definition of an oligopoly is a market condition in which sellers are so few that the actions of any of them will materially affect price and have a measurable impact on competitors. With their continued success, Wal-Mart’s market structure could also be a monopolistic competitive structure. Wal-Mart’s command of logistics, pricing power, and marketing position allow them to leverage a
ECO/365
March 4th, 2013
Week 3 team assignment
Current Market Conditions Competitive Analysis
Introduction
In a society that has seen historical economic fluctuations and shifts in one’s long-term employment, consumers are searching for the best bargains they can find. Consumers across the United States are looking for ways to save money; thus, searching for stores that will provide them with everything they need at a lower cost. Companies around the United States are fighting to stay competitive and are seeking ways to restructure their company, and still provide for consumers the best prices. It is within this economic backdrop that people will study a leader in low cost, high efficiency retailing - Wal-Mart. At the onset of the last two recessions, Wal-Mart had very little to do within their structure to fit the demands of consumers because Wal-Mart already offers its customers brand name items at lower prices. Wal-Mart’s basic structure has helped make it a powerful retail business, and a place consumer’s love.
Market Structure
Wal-Mart Stores Inc. opened its first discount store in 1962, Sam Walton had no idea his business would be the success that it is today. The reason for Wal-Mart’s success is their ability to create a basic and scalable structure for their business. Wal-Mart offers a variety of well-known brands and sells them between 5-10% cheaper than other retailers. This makes Wal-Mart a powerful force in the retail business. It is the belief that Wal-Mart is oligopolistic and as the class is learning, the definition of an oligopoly is a market condition in which sellers are so few that the actions of any of them will materially affect price and have a measurable impact on competitors. With their continued success, Wal-Mart’s market structure could also be a monopolistic competitive structure. Wal-Mart’s command of logistics, pricing power, and marketing position allow them to leverage a
References: Colander, D. C. (2010). Economics (8th ed.). New York, NY: McGraw-Hill/Irwin http://corporate.walmart.com/our-story/