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Wal-Mart Paper - Assignment Example

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Wal-Mart Introduction Wal-Mart is global brand dealing in retail outlets across many economies around the world as a multinational player. Under the circumstances of an international presence and product portfolio composed of diverse products, Wal-Mart’s performance in the market global market is under different forces…
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Wal-Mart Assignment Paper
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Wal-Mart Paper

Download file to see previous pages... This presentation discusses the microeconomic and macroeconomic factors that affect the operations of the giant retail outlet chains. Microeconomic Analysis In order to understand the nature of demand and supply environment in the various outlets owned by Wal-Mart, it is important to describe the product portfolio for Wal-Mart. Among the products that an ordinary retail shop offers to the market, general household products and appliances, electronics, beverages, food, stationery, textiles, furniture among many other general retailable products. From this illustration of product portfolio at Wal-Mart or any general retail outlet, certain demand and supply forces influence the operations of the shops when compared to any other shop such as wholesale outlets. One characteristic of the demand and supply is the high diversity in products that the company deals in. Whereas it is possible to monitor one line of products and the performance thereon determined, the aggregate demand and supply for the retailer is determined by the total performance of the products. This implies that the performance in demand and supply of a single product will affect the operations of the company to the extent of the overall proportion that the particular product makes to the operations of the company. This is an advantage to Wal-Mart since the high performing products soak up the impact of non-performing goods. As a disadvantage, accommodating non-performing goods at any season blocks the capacity to exclusively exploit the benefit of high demand for highly performing goods. In terms of the market structure in which Wal-Mart operates, it is perhaps important to consider the two market platforms at both the local US market as well as the international level. For Wal-Mart, the level of retail outlet design and approach taken by the company in the US is largely an oligopoly1. The structure of an oligopoly qualifies Wal-Mart to be classified as such due to the existence of few players of its status and form. Retailing at the large size and high-end category in the US has a few players due to the inherent market forces that discourage entry of many players. According to Porter’s five competitive market forces, the entry of new players into the departmental retailing is highly restricted due to the nature of retailing business that can accommodate only a specific number of players. The few players in this kind of business in the US include Target and Costco2. In the overseas market platform, Wal-Mart assumes different statuses as defined by the retail business in the different countries. As an illustration, the market could be a monopoly in a country where such size of retail players is not present. In view of the interventions that can be taken to ensure that the oligopoly or monopoly structure is maintained for Wal-Mart to enjoy its benefits, the management needs to consider offering unique services and products. Under the circumstances that an oligopoly presents to the players, competition may increase and affect Wal-Mart’s opportunities in the market. To facilitate a strong and sustainable market existence amid the competition, Wal-Mart must present a unique product to act as the main customer attraction and retention factor. To illustrate this, McDonald’ ...Download file to see next pagesRead More
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