Transcript WAL-MART

WAL-MART
Case Study:
Can a company be too successful?
http://www.pbs.org/itvs/storewars/stores2.html
http://www.pbs.org/itvs/storewars/sitemap.html
Research Article Findings on
Market Power
Wal-Mart Supercenter:
(size of 3 Football Fields)
Video #1
2011
3,600 Stores
In USA
Total Revenue:
1995 = 100 billion
2003 = 245 billion
2011 = 450 billion
ANGRY Communities
Fight Back
Wal-Mart Supercenter:
(size of 3 Football Fields)
Zoning
Analysis
Predatory Pricing
• Predatory Pricing is purposely setting your prices
very low in order to put other firms out of business
– Your intent is to raise prices later
– Illegal by Anti-Trust Laws
2011
450 billion
2011
3,600 Stores
In USA
Total Revenue:
1995 = 100 billion
2003 = 245 billion
2011 = 450 billion
Reasons to HATE Wal-Mart
Keeps wages low
Puts local companies out of business
Accused of “abusing” worker rights
Push suppliers too hard?
Predatory Pricing?
How is Wal-Mart so efficient?
What is Economies of Scale?
More efficient firms => have lower costs =>
can offer lower prices => other can’t compete
Video #2
Benefits
Is Wal-Mart good for the U.S. economy?
Costs
Reasons to LOVE Wal-Mart
Keeps prices very low
Saved consumer 20 billion a year
Overall, may save 100 billion per year
This Lowers inflation and ↑ GDP
Products
PRODUCERS
Circular Flow
Land, Labor & Capital
Factors
CONSUMERS
Should Wal-Mart be regulated?