Wal-Mart Current Market Conditions
Wal-Mart: Current Market Conditions
Paul Kahler, Dawn Smith, Sean McClintock, Danny Truong
University of Phoenix
ECO365/Principles of Microeconomics
Matthew Angner
October 25, 2010
Wal-Mart: Current Market Conditions Market trends in the retail market are not difficult to track. “Any major initiative Wal-Mart undertakes has enormous supply chain implications worldwide” (ThomasNet News, 2010). The analysis for this paper is to look at the approach of Wal-Mart in a very competitive industry and examine how Wal-Mart is so successful. Some of the areas that will be examined are the Market Structure, the impact of new companies entering the market, prices, productivity, and cost structure, price elasticity of demand, competitors, supply and demand analysis, and impact of government regulations. When locating new stores, Wal-Mart tends to first look at more rural areas where there is less population, a higher income and where consumers are less likely to travel to larger cities. This may be due to the economics of the region or the size of city in which they propose to occupy. The company’s market is the same market as Target and K-Mart. The company’s growth will in all likelihood cause other smaller retail businesses to fail. New firms entering the market will continue to drive Wal-Mart’s prices lower. The impact of new companies entering this market would affect pricing indifference between companies. “Wal-Mart is the world 's largest retailer and second largest corporation. It is the largest private employer in the United States and Mexico. Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business, and the largest toy seller in the United States, with an estimated 45% of the retail toy business, having surpassed Toys "R" Us in the late 1990s. Wal-Mart has 1,929 stores which as of 2005 sales figures totaled about $155 bilion in sales. Wal-Mart’s revenue as of 2006 was
Paul Kahler, Dawn Smith, Sean McClintock, Danny Truong
University of Phoenix
ECO365/Principles of Microeconomics
Matthew Angner
October 25, 2010
Wal-Mart: Current Market Conditions Market trends in the retail market are not difficult to track. “Any major initiative Wal-Mart undertakes has enormous supply chain implications worldwide” (ThomasNet News, 2010). The analysis for this paper is to look at the approach of Wal-Mart in a very competitive industry and examine how Wal-Mart is so successful. Some of the areas that will be examined are the Market Structure, the impact of new companies entering the market, prices, productivity, and cost structure, price elasticity of demand, competitors, supply and demand analysis, and impact of government regulations. When locating new stores, Wal-Mart tends to first look at more rural areas where there is less population, a higher income and where consumers are less likely to travel to larger cities. This may be due to the economics of the region or the size of city in which they propose to occupy. The company’s market is the same market as Target and K-Mart. The company’s growth will in all likelihood cause other smaller retail businesses to fail. New firms entering the market will continue to drive Wal-Mart’s prices lower. The impact of new companies entering this market would affect pricing indifference between companies. “Wal-Mart is the world 's largest retailer and second largest corporation. It is the largest private employer in the United States and Mexico. Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business, and the largest toy seller in the United States, with an estimated 45% of the retail toy business, having surpassed Toys "R" Us in the late 1990s. Wal-Mart has 1,929 stores which as of 2005 sales figures totaled about $155 bilion in sales. Wal-Mart’s revenue as of 2006 was
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