Question

CASE: Wal-Mart: But We Do Give Them A 10 Percent Employee Discount.

QUESTION: Should Wal-Mart do whatever it can to reduce its prices?

To answer the question, take into account that Wal-Mart might be serving base-of-the-pyramid customers, many of which leave in developing countries. – Also, take into account Ethical Imperialism and Ethical Relativism from the assigned reading to answer the question

Answer 1

Walmart's strategy is to provide the product at the lowest price possible. Price depends on competition and not the retailers. If there is no competition, then there will be no one to stop the retailers from putting a high price on products. Hence, it is not correct to expect Walmart to reduce prices every time. What Walmart does is a reaction to competitive forces. That it has kept its prices low is because of its huge volume of purchases and bargaining power vis a vis competitors. Its strategy currently is to outsell the competition through low prices but the strategy can change and it is ethical on their part to change their strategies as their wish. Therefore, for people to expect Walmart to provide low prices every time is not justified even in developing countries. This is ethical relativism where nothing is right or wrong and it depends on people or companies. If Walmart is serving the base of the pyramid, then obviously it will keep the prices low. This is in relation to ethical imperialism where Walmart has brought this strategy to developing countries. It has brought it systems and processes to keep the prices low in developing countries where their target customers are people in the bottom of pyramid.