Question

One of the most successful firm In U.S. retailing during the last decade is Walmart.
1. Has Wal-Mart's success fulfilled the virtues/characterization of competition often discussed(e.g.. posts of firms, low prices, low entry barriers, etc.)
2. Has there been an economic/social cost of Wal-Mart's success?
3. List the problems allegedly caused by Wal-Mart for it's employees, local communities, consumers, and the environment.
4. Discuss the most serious charge against Wal-Mart.
5. Discuss the most significant benefit Wal-Mart offers.

Answer 1

1. Wal-Mart is helping consumers get more for their money. It is providing jobs for employees. It is motivating its suppliers to achieve greater economies in manufacturing. It is encouraging trade with developing economies, helping the inhabitants of Third World nations to improve their standards of living. It offers an appeaing place to shop and work. Wal-Mart is a model of how successful competition is supposed to work. Wal-Mart has opted to ensure that its prices are as low as can be. This focus has enabled the company to promise “always low prices, always.”

2. To many people, Wal-mart is a corporte criminal. Many critics have accused the company of engaging in exploitive practices on its way to becoming the largest business in the world. Wal-Mart allegedly exploits its own employees by paying poor wages and forcing them to work unpaid overtime. It also allegedly squeezes vendors, forcing them to lay off American workers and ship their jobs to foreign sweatshops.

3. It is no doubt true that there are some workers, who had jobs before Walmart came to town, who lose their jobs when Walmart comes to town.They work for the local, competitive, small store that goes out of business. They lose their job. Walmart does not provide health insurance for its workers, and this is a shameful condition that needs to be rectified. Walmart comes to town and the downtown closes down in small communities. Regarding problems related to environment, one of the arguments is, it brings congestion to communities; it builds unsightly stores.