Wal-Mart is driving prices down through its competitive bargaining strategy for its manufacturing costs. By holding prices at a low level, inflationary pressures are relieved and the economy is a lot steadier. By selling items for less than average, Wal-Mart allows its customers to acquire more than normal when shopping in the store. Lower prices also mean more money is left in the pockets of consumers. This allows opportunities for businesses of all types.
The pay that employees get is the price they must pay for low priced merchandise. Because of the minimal pay to employees, Wal-Mart strengthens its’ consumer buying power. Giving the American shoppers the savings they need, Wal-Mart’s has ultimately been them successful. Wal-Mart has potentially wiped out the middle class as an employer, but the employees can now work and ... ... middle of paper ... .... Food 4 less lets the government and taxpayers deal with employee’s financial and medical assistance. Taxpayers are paying the price for Wal-Mart and Food 4 Less.
It is actually quite the opposite, Wal-Mart’s supply chain is very customer focused, which is what gives them an advantage over their competitors. Wal-Mart focus’s on the customer and employs a pull strategy, where the demand from customers is the basis for production for Wal-Mart suppliers. This gives them a unique production method, in that they do not produce based on traditional methods rather it is based on short-term forecasts of demand generated by their customers. This allows them to not only keep stock costs low, it also allows them to track demand of individual products. This results in lowered costs of advertising and promoting products because they are able to accurately track demand and can adjust their advertising based on what is selling and what is not resulting in more accurate marketing efforts.
Walmart has one of the lowest prices of goods and products in the retail business. Jeffrey Garten a dean at Yale says, “The essence of Wal-Mart is it is propelled by one thing: offering products at the lowest possible price” (24). While having, low prices is good Walmart is taking its toll on their employees. Having such low prices forces Walmart to pay their employees so little. A point made to Garten was “Walmart
Their ability to distribute the cut rate from their operating proficiencies in supply chain management and cash flow, permits them to offers items at discounted rate and a lower price than their competitors. For Costco the meaning of being the low-cost provider while also differentiating from the competitors is ambiguous at best. Costco’s CEO, Jim Sinegal, is certain that low priced, and the high value merchandises are exactly what is needed maintain and achieve a staying power in the industry. Costco also entices their customers with low prices on designated set apart products available only at their stores. Within these designated products, Costco provides a limited selection of nationwide brand-named merchandises in some wide categories.
Wal-Mart has emerged as the industry leader because it has been better at containing its costs, which has allowed it to pass on the savings to its customers. Wal-Mart has become a capability competitor. With such low wages for those who make the Bratz dolls, Wal-Mart can profit greatly while still providing low prices to its customers. In a global labor market, it is the companies who can find the cheapest, most exploitable conditions, with little worker protection or regulations that will profit the greatest. Distribution System ... ... middle of paper ... ...zil where they only have Sam’s Clubs and Super centers.
Wal-Mart is known for their Everyday Low Prices (EDLP); their guarantee that instead of big sales, their customers can come in and get what they need for less. According to Kathleen Seiders and Glenn B. Voss, authors of From Price to Purchase, “Advocates claim that everyday pricing increases customer loyalty, improves inventory management, and reduces labor and advertising expenses.” However, that reassuring EDLP might not be as helpful as it seems. It turns out Wal-Mart doesn’t necessarily guarantee the lowest price on all items, simply the ones at the end of the aisles and in center displays, the other models are often more expensive than other st... ... middle of paper ... ...ol Your Inventory.” Nov. 2000. Harvard Business Review. Bloom, Paul N. and Perry, Vanessa G. “Retailer Power and Supplier Welfare: The Case of Wal-Mart.” 2001.
Associates everyday life and survival suffers from working at Walmart. The average employee makes 25% less than the average retail worker. “Anthony Goytia earns $9.60 an hour which gives his family 12,000 dollars a year to live off of. They rely on state run health insurance and food stamps.” Communities that allow Wal-Mart into their town get tax breaks and low cost financing as well as grants from state and local government which in turn further promotes the problem because even though jobs are created they are not jobs anyone can sustain a family on. Walmart is the largest American corporation and the owners are among America’s richest families.
Wal-Mart is an international phenomenon. The store guarantees low prices for living better, despite the controversy about what Wal-Mart is really like. Americans perceive Wal-Mart as a store that is jeopardizing the economy but in fact, Wal-Mart is one of the most successful providers to many people around the world. America can benefit greatly as a result of Wal-Mart because of their convenience for the shoppers, low prices, and amount of jobs provided. According to a documentary on Wal-Mart, the company can be described as a “one-stop-shop” (00:05:29-00:05:32).
Wal-Mart is especially popular among low-income shoppers who cannot afford the prices of the more upscale stores. It has put other stores out of business, but that is the way capitalism works. The automobile replaced the horse and buggy. Sound motion picture replaced the silents. No one has a "right" to business success or a "right" to be protected from competitors through government intervention.