Wal-Marts Marketplace Clout - Essay Example

Wal-MartIntroduction Contemporary capitalism has huge corporations that are familiar features, such as Coca-Cola, Nike and Johnson & Johnson. These corporations produce our computers, car appliances, and other household products. However, Wal-Mart, one of the world’s largest companies, represents something new on the economic landscape. Wal-Mart has become large and influential than any other retailer chains and has achieved high status in the retail market. It has over 4,750 stores, which are visited weekly by 138 million shoppers.

Lately, it is moving beyond its stronghold in rural south, since; eighty two percent of American household purchase at least one item from them. Consequently, Wal-Mart’s market place clout is tremendous:It controls about 30 percent of the household’s staples marketIt sells 15 percent of all magazines and 15-20 percent of all CDs, DVDs and videos andIt is expected to soon control over 35 percent of U.S food sales.Wal-Mart represents a big hunk of total business for companies selling consumer products.

In addition, it is responsible for 10 percent of all goods imported from China to United States (Shaw, 162). Wal-Mart has risen to dominate retail market through the bargain prices it offers to consumers. Due to its cost efficiencies it has attained and the pressure it places on suppliers make it afford to give customers products at low prices. As much as Wal-Mart offers low prices, not everyone loves it. It also has charges that criticize against the retail behemoth. One, Wal-Mart’s buying power and cost saving efficiencies force local rivals out of business, in turn disrupting local communities, costing jobs and injuring established business districts.

Second, Wal-Mart pays low wages and is staunchly anti-union. Its labor cost is 20 percent lower than that of unionized supermarkets. Moreover, its hard-line on costs has forced many factories to move overseas, resulting to sacrificing American jobs and thus, holds wages down (Shaw 163). . Government welfare program subsidizes Wal-Mart’s poverty level wages. One congressional report shows that a two hundred employee store costs the government a fortune that is: housing assistance, children healthcare, and tax credits are paid by the government.

Lastly, as Wal-Mart grows and its competitors fall by the way side, consumer’s choice narrows and the retail exert even greater power as a cultural censor. For instance; Wal-Mart won’t carry computer games and music with mature rating. Therefore, the big music companies supply it with sanitized versions of explicit CDs that they supply to the radio stations, and that are sold elsewhere. The retailer has also removed racy magazines, such as FHM and Maxim, from its racks and it obscures the cover of Glamour, Cosmopolitan and Redbook.

As a result of these decisions Wal-Mart’s expansion is often meeting determined local resistance, since the concerned residents try to preserve their communities, their local store and downtown shopping areas from Wal-Mart disruption through political pressure, petitions and zoning restrictions. In conclusion, John E. Hoopes, the professor of Babson College encourages people to take a long term view and be patient because there will be new models that will eventually be available at Wal-Mart (Shaw n.p.).

Furthermore, the company’s sales growth has slipped as people’s shopping habits have changed owing to other shopping trends, such as online shopping. Work CitedShaw, William H. Business Ethics. 6th ed. Belmont, CA: Thomson/Wadsworth, 2007. Print.