Eco/365 Week 5 Final Paper Essay Example
Running Head: Final Project
University of Phoenix
ECO 365
April 20, 2011
Introduction
The evolution of Wal-mart from the early 1960s to the present day has set a benchmark that few can achieve. Wal-mart executives have been successful nationally as well as globally. The knowledge and expertise in economics have made Wal-mart a global giant. The research completed is the final recommendations by the members of research team C and will address questions regarding global competition and issues of the organizations ability to expand or reduce current operations.
Price
Wal-Mart continually advertises their prices to be substantially lower than their competitors. The truth is, most Wal-Mart items do not have a drastic price difference. However, the difference is Wal-Marts’ ability to slash prices on many popular items every so often to maintain the ‘low price leader’ image. This has helped the retail giant maintain the number one retail spot over the past decade. This perception has also kept shoppers out of small businesses and other retail chains, giving Wal-Mart that competitive advantage to continue to slash prices after moving most of their inventory. Wal-Mart perpetuates the image of having low unbeatable prices. They flood the airwaves with advertisements of local store promotions to keep the Wal-Mart name fresh in they buyers mind. This is how Wal-Mart continues to have that competitive advantage. Retail giant Kmart failed when consumers felt like they where no longer being offered the best prices and deals. Wal-Mart must continually reach out to its vendors and suppliers so that they can cut prices whenever needed. In 2005, Wal-Mart began and won a pricing war with the most popular toys, directly hurting toy giants such as Toys-R-US. It marked 10 of its most popular toys for 10 dollars each. This is strategic pricing at its best. “M. Eric Johnson, a Dartmouth College professor who follows the toy business, said
University of Phoenix
ECO 365
April 20, 2011
Introduction
The evolution of Wal-mart from the early 1960s to the present day has set a benchmark that few can achieve. Wal-mart executives have been successful nationally as well as globally. The knowledge and expertise in economics have made Wal-mart a global giant. The research completed is the final recommendations by the members of research team C and will address questions regarding global competition and issues of the organizations ability to expand or reduce current operations.
Price
Wal-Mart continually advertises their prices to be substantially lower than their competitors. The truth is, most Wal-Mart items do not have a drastic price difference. However, the difference is Wal-Marts’ ability to slash prices on many popular items every so often to maintain the ‘low price leader’ image. This has helped the retail giant maintain the number one retail spot over the past decade. This perception has also kept shoppers out of small businesses and other retail chains, giving Wal-Mart that competitive advantage to continue to slash prices after moving most of their inventory. Wal-Mart perpetuates the image of having low unbeatable prices. They flood the airwaves with advertisements of local store promotions to keep the Wal-Mart name fresh in they buyers mind. This is how Wal-Mart continues to have that competitive advantage. Retail giant Kmart failed when consumers felt like they where no longer being offered the best prices and deals. Wal-Mart must continually reach out to its vendors and suppliers so that they can cut prices whenever needed. In 2005, Wal-Mart began and won a pricing war with the most popular toys, directly hurting toy giants such as Toys-R-US. It marked 10 of its most popular toys for 10 dollars each. This is strategic pricing at its best. “M. Eric Johnson, a Dartmouth College professor who follows the toy business, said