WAL-MARTCase Study: Can a company be too successful?

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Research Article Findings on Market Power

Wal-Mart Supercenter: (size of 3 Football Fields)

Video #1

2011

3,600 StoresIn USA

Total Revenue:

1995 = 100 billion

2003 = 245 billion

2011 = 450 billion

ANGRY Communities Fight Back

Wal-Mart Supercenter: (size of 3 Football Fields)

Zoning Analysis

Predatory Pricing

• Predatory Pricing is purposely setting your prices very low in order to put other firms out of business– Your intent is to raise prices later– Illegal by Anti-Trust Laws

2011450 billion

2011

3,600 StoresIn USA

Total Revenue:

1995 = 100 billion

2003 = 245 billion

2011 = 450 billion

Reasons to HATE Wal-Mart

Keeps wages lowPuts local companies out of businessAccused of “abusing” worker rightsPush suppliers too hard?Predatory Pricing?

How is Wal-Mart so efficient?

More efficient firms => have lower costs => can offer lower prices => other can’t compete

What is Economies of Scale?

Video #2

Benefits CostsIs Wal-Mart good for the U.S. economy?

Reasons to LOVE Wal-Mart

Keeps prices very lowSaved consumer 20 billion a yearOverall, may save 100 billion per year

This Lowers inflation and ↑ GDP

Circular FlowPRODUCERS CONSUMERS

Factors

Products

Land, Labor & Capital

Should Wal-Mart be regulated?