Market Model Patterns of Change - Essay Example

This paper aptly examines the patterns of change in the Wal-Mart market model. Wal-Mart is a perfect example of a business operating in an oligopolistic market structure. This is because they have low prices in the market enabling them compete healthily with other businesses dealing in similar products/services. Secondly, Wal-Mart operates with fewer sellers in the market giving them mutual interdependence over the other firms in the business. The long term effect of Wal-Mart operating an oligopoly will result to rise of economies of scale.

This is because they will take advantage of having been in the markets to put barriers to other business wishing to join the business. Secondly, Operating under oligopoly market structure, Wal-Mart may collude to form a monopoly form of market structure, therefore, dictating their terms in the market. As a short term effect, Wal-Mart will be forced to renew their strategies of working because they will be facing different competitors in the market (Roberts & Berg, 2012). Secondly, Wal-Mart will enjoy controlling its market share for short period of time, but because the market is free for other to join, they will soon lose their popularity in the market as new firm producing same products will be cropping up to share the market it enjoyed.

An example is that today, Wal-Mart may holds a substantial share in the market by its products but the case will be different in a year or two because there will be other new companies providing same products and at even better quality. There are various factors affecting the degree of competiveness of Wal-Mart. They involve both internal, external and delegations and functions of the management. The productive measures affecting Wal-Mart competitiveness is their capability in retailing. The business has various stores situated in various strategic places.

These stores seek their profits by retailing their products through high volumes and using low mark-ups to give them a competitive advantage over other business dealing in the same line of products. Secondly, Wal-Mart achieves their competitiveness owing to their standardized pallets, tight delivery schedules and computerized tracking. This has given them an edge over many businesses dealing in the same line since they are not in a position to raise enough capital to ensure efficiency in the systems.

They are also able to use their technology as a source of marketing, therefore, minimize on their revenue spending. Thirdly, Wal-Mart prices play a significant role in influencing their activities and encouraging their competitiveness to other businesses. This is because it is an economy of scale, therefore, they purchase raw materials at a much cheaper price compared to other businesses that are not yet economies of scale. They also distribute their stock to a large numbers of stalls located strategically hence minimizing cost related to transport and other related activities.

Being an economy of scale, Wal-Mart is offering prices for its products that cannot rejected by the customers and in the process enjoys a large customer base for their products/services (Dunne, 2011). An accurate price determination of Wal-Mart’s competitors will significantly influence pricing decisions in Wal-Mart. The two chief competitors of Wal-Mart include