The most successful firm in U.S. retailing during the last few years is Walmart.
ID: 1112640 • Letter: T
Question
The most successful firm in U.S. retailing during the last few years is Walmart. Has Walmart’s success fulfilled the virtues of competition described in this chapter? Has there been a cost of Walmart’s success? Find out how Walmart responds at www.walmartstores.com What is the most serious charge against Walmart? What is the most significant benefit Walmart offers?The most successful firm in U.S. retailing during the last few years is Walmart. Has Walmart’s success fulfilled the virtues of competition described in this chapter? Has there been a cost of Walmart’s success? Find out how Walmart responds at www.walmartstores.com What is the most serious charge against Walmart? What is the most significant benefit Walmart offers?
The most successful firm in U.S. retailing during the last few years is Walmart. Has Walmart’s success fulfilled the virtues of competition described in this chapter? Has there been a cost of Walmart’s success? Find out how Walmart responds at www.walmartstores.com What is the most serious charge against Walmart? What is the most significant benefit Walmart offers?
Explanation / Answer
The presence of Wal-Mart and the financial strength of the company is so that whenever there is an opening of a new Wal-Mart store in any locality, the local grocer either lose their major customer base or they have to shut down their business due to lack of customers. Only the retailers who are able to look back to their strengths and weakness and opt to work on that are able to face the heat of competition offered by Wal-Mart. Wal-Mart not only exert tremendous pressure only on its suppliers but it also becomes nightmare for the local retail owners epically in case of small rivals in the local market.
Due to its economies of scope and economies of scale, the company has the supreme bargaining power with the supplier which results in lowering the price of the products and this cushion is not available with the local retailers. Due to aggressive negotiation activities of Wal-Mart, a lot of pressure is exerted on the supplier to reduce the cost and thus they opt to outsource their manufacturing to the countries like China which have lower labor cost and thus America is a loss of losing it huge job opportunities. Apart from this, due to cost-benefit, the company is also able to root out the small retailers which are also one of the main source of employment in many cities. In fact, John Kerry opinioned that every 100 jobs which are created by the company result in 50 job loss in the retail sector and loss of business to many retailers.
Wal-Mart is also being criticized by many industry experts on the account of poor working conditions and wage rates, health care coverage despite having huge economic profits. The company does not provide any kind of health coverage to the part-time employees which is the major employee base of the company. The health plan of the company has failed to provide health coverage to thousands of part-time employees. In fact, most of the employees are forced to opt for the states subsidized benefits for a longer period of time. The right to unionize and collective bargaining is also not facilitated to the employees of the company. There are many other issues such as dealing with child labor in other countries, pollution, racial equality are some of the burning issues in front of Wal-Mart.