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A WalMart Monopoly - Case Study Example

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Wal-Mart is one of the biggest corporations in the world, with more than 5000 stores worldwide. The group is the largest employer in the United States. Wal-Mart is also synonymous with lower prices. The chain has been constantly studied for its impact on the local economies…
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A WalMart Monopoly
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Download file to see previous pages Growth accelerated by takeovers and buyouts of other retail chains also fuel the power of the corporation to grow bigger. The study analyses three articles on Wal-Mart to assess their role in various economic scenarios.
The author contends that a rural community where Wal-Mart has entered has had adverse effects. Wal-Mart is another stage in a long process where the retailers business has shifted from the local stores. Sears catalog was one, increased prevalence of the automobile giving access to local towns was another. The shopping malls changed the way America shopped. In the 1960s discount supermarkets made their entry, including among them Wal-Mart. Wal-Mart's strategy was to open a large store in a small town, within easy distance of its distribution centers. It took them 30 years to go national. The author has studied Wal-Mart and its impact extensively to devise strategies for his clients, Iowa retailers. The study has spanned 34 towns in Iowa, all of which has had a Wal-Mart store for at least 10 years. General merchandise stores in towns with no Wal-Mart suffered immediately when Wal-Mart opened. It is generally believed that people in towns with no Wal-Mart traveled out to towns that did. The effect has also been seen on eating and drinking places, which had been more frequented in Wal-Mart towns. Home furnishing sales in non Wal-Mart towns declined. The study has also unearthed that stores carrying similar lines as merchandise stocked in Wal-Mart, probably loses sales. Apparel sales in other stores fell by around 28% in the year in which Wal-Mart opened in a town. Retailers in Smaller towns with less than 5000 population lost most when a Wal-Mart opened. Vermont state officials had tried to keep Wal-Mart away to protect its small traders, but found that the entire sales shifted to New Hampshire and New York where Wal-Mart opened. The author concludes that loss of retail trade for small stores has accelerated in the past two decades. The author then proceeds to suggest a few ways in which retailers can coexist with Wal-Mart. They include stocking merchandise lines, which Wal-Mart does not handle, handle complementary merchandise, go for upscale merchandise etc. A better customer profiling, extended working hours, no hassle return policy etc, special order capability which large discount supermarkets don't possess etc are essential.
Summary of Article # 2
Author: Hallsworth, Alan and Evers, David
Topic: The steady advance of Wal Mart across Europe and changing government attitudes towards planning and competition.
Source: Environment and Planning C: Government and Policy 2002, Volume 20, pages 297-309
Date 2002
The authors focus on retail internationalization and the ability of EU states and their regulatory mechanism to handle the same. Since 1994, the Wal-Mart format has been creating a systemic change in the retail environments of a number of countries. Planning regulations in many countries are at odds with other policy developers who look forward to encourage competition in order to develop national competitiveness. Netherlands had a tight policy against big box development, but consequent policy decisions could make the market a ...Download file to see next pagesRead More
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