University of PhoenixPrinciples of MicroeconomicsECO 365September 17, 2008ntroductionThis paper will analyze the current market conditions for Wal-Mart. The paper will address market structure, the impact of new companies entering the market, prices, technology, productivity, cost structure including wages and benefits and fixed and variable costs. This paper will also address price elasticity of demand, Wal-Marts' competitors, a supply and demand analysis and the impact of government regulations.
Market StructureIn order to increase the company's sales and profits, Wal-Mart restructured their marketing operations. By conducting research in several segments to include customer needs, pricing, and experience, Wal-Mart wanted to be sure that the majority of its stores contained departments to meet every needs of the consumer such as entertainment, home furniture, compatible food prices, electronics, and apparel. The research also included shutting down smaller Wal-Mart stores and replacing these stores with Super Wal-Marts that included an automotive department. On a negative side, a few marketing strategies that were implemented in some stores was the merchandise that Wal-Mart provides such as name brand electronics such as flat panel displays, Apple I-pods, and computers.
Since Wal-Mart is best known for low price products, having high-end merchandise has had a negative impact on the low-income consumers.
Impact of New Companies Entering the MarketThe impact a new company may have when competing with Wal-Mart is the price on merchandise and the variety of products, food and services. Some companies are not big enough to provide all the services that Wal-Mart has but can provide a few of the services but may fall short on the number of stores and location to best meet all the needs of the consumer at a reasonable price.
PricesWal-Mart advertises that they always have the lowest prices, but compared to which company? The most similar company to Wal-Mart is...