Wal-Mart - Research Paper Example

Sam Walton believed that impressive profits in any business do not source from charging high prices on goods and services, but from making high sales volume. Samuel Walton believed that he could only make smart profits if he did a lot of sales of his merchandise. For this reason, Samuel Walton resolved to reduce the prices of his merchandise below the market margin, which eventually played the most critical role in attracting many customers. With many customers, the rate of stock turn over in the Wal-Mart stores increased thereby resulting to high profit margins.

The success of Wal-Mart stores should act as reflective mirror to any investor in the chain store industry. Wal-Mart’s success lines up with various economic and social benefits as well as negative implications in the line of economy, social and environmental arenas. Wal-Mart stores have worked towards eliminating monopolistic complacency in the American market by inducing high level of competition. Wal-Mart is known for its tendency to reduce handlers of its products to the shelves, a strategy achieved through the identification of viable vendors who inspect the stocks in the stores and in the shelves and organize for supply when necessary.

The strategy has helped Wal-Mart stores in cutting costs, transferring the advantages transfers to the customers who eventually end up buying goods at low prices (Bargdahl 14). The reduction of prices charged on the final products by Wal-Mart has attracted many consumers to the Wal-Mart stores, an event that has seen decline in performance of the other competitors. Owing to the high competition from Wal-Mart, other market operators have been forced to lower their prices thus the benefit to the consumers.

According to Bergdahl, Wal-Mart stores adopted advanced technology of loading and offloading, which applies the use of conveyor belts (41). Wal-Mart has therefore employed thousands of people who operate the