Wal-Mart Stores Competitive Structure
This is one of the leading industries that have provided implementation and operations of business strategies.
Market structure of the company
Wal-Mart stores inc. is in a competition market that is monopolistic. It takes both oligopoly and monopolistic structures of market.
Macro and international influences on Wal-Mart
It operates internationally Wal-Mart has been able to attain its goals due to the macro- influences.
Changes in market structure
Wal-Mart inc. changes its market structure severally. It has been decreasing the number of labor force and automating its process of production.
Industry forecasts for costs.
Wal-Mart forecasts low cost of labor force due to development of technology. The automation of the process of production will lead to low cost.
Future shortages
Wal-Mart may experience variable costs that are high in future due to increasing change in technology.
Wal-Mart Competitive Structure
Wal-Mart is one of the best leading industry that have for years provided a strategies of business operations and implementation. The founder of Wal-Mart did visionary leadership by way of learning how to be competitive through his competitor’s failures combining with some of his successful approaches.
Market structure of the company
Wal-Mart stores inc. exists in a monopolistic competition market where it operates numerous stores that provide consumers with products and services. Retailers present in the chain of providing services to the consumers bring about the aspect of oligopoly market structure. Wal-Mart is in no way affected by numerous retailers who are present in the market thus the competition level seems to be very minimal, (Longo, 2009). Wal-Mart takes both the monopolistic and oligopoly market structure due to the state of other retail firms and similar firms that do operate like Wal-Mart. It is the largest firm that experiences abnormal profits from services and products that are provided to the customers. The firm is so monopolistic in that whenever it opens a branch in a given area, the number of firms that are being closed and jobs lost are so many. It has dominated a good market segment as compared to other firms, (Wal-Mart Stores, Inc. 2009).
There are barriers in entering the market and that is the greatest reason as to why Wal-Mart has turned to be a big threat towards operation of the market by other firms. On the other hand, the firm has some control power over what is to be supplied as same as the prices to be charged. Below is the abnormal profit diagram that the firm makes.
Macro and international influences on Wal-Mart
Marco influences have enabled Wal-Mart to grow and attain its set goals. The firm operates so many outlets that enable it to have a good market segment over its competitors. The firm’s products are labeled in such a way that they are recognized by the customer thus there is no single way their customers will get confused. Although there are times when the economy may tend to be bad, the firm is not affected in any way simply because they do set their own prices unlike the situation whereby firms expects the market to set prices for their products. It operates internationally thus enabling the firm to have enough market for the products which yields some competitive strategies and ways of improving their services as well as products. Even if an individual doesn’t shop at Wal-Mart there is no difference at all simply because the firm has established a large geographical area which caters for the services and products that are produced by the company, (Daugherty, 2010).
Changes in market structure
Wal-Mart has been able to develop and achieve the best title in a visionary company due to now and then market changes that it employs. Instead of employing a lot of labor force to do the work, the firm has been decreasing the number and in return it has been automating its production thus making the entire process effective and efficient. The labor force that the firm employs is always learned such that they are able to use the technology. Since the company does make abnormal profits, it has the power to use quality, materials for its production. Materials that are used in the production process are of high quality and that is the reason as to why the firm does provide quality products to consumers who have no doubts with products they purchase, (Wal-Mart Stores, Inc. 2009).
Industry forecasts for costs
Due to the increase and development of technology, the firm forecasts a low cost of its labor force. Currently the firm is experiencing a high cost on labor simply because of automation that is going on but in the near future it will be experiencing the lest labor costs. The firm will just employ few individuals who will be taking care of the automated plants which are aimed at improving the production process of products that are provided to the customers. Since the company has dominated the market and its increasing to compete with the current firms, there is a great risk that the firm will remain in the market. This means that with exit of other firms few firms will be producing the same which means that there is a great chance of prices raw materials reducing. In general expected costs of the firm will reduce gradually and a good example is the current situation which makes firms to have abnormal profits, (Daugherty, 2010).
Future shortages
Technology is increasing now and then. The company is at a risk of encountering high market variable costs in future. Since technology is changing now and then it seems that the company requires keeping on changing the automation for its production process. The firm should deploy technology that is changeable simply because of the change that is taking place, (Longo, 2009).
Reference:
Daugherty, R. (2010). New approach to retail signals strong future for point of purchase displays. Paperboard Packaging, pp. 24-27.
Longo, D. (2009). New generation of exec’s leads Wal-Mart into the next century. Discount Store News, pp. 45-47.
Wal-Mart Stores, Inc. (2009). The story of Wal-Mart. Bentonville, Arkansas: Corporate Offices of Wal- Mart Stores, Inc.
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