Question

I Need thoughts on the following.

My company is Walmart Neighborhood Market. Cited sources also appreciated.

a) Determine whether the market structure of the industry in which your chosen company operates is perfectly competitive, monopolistically competitive, oligopolistic, or monopolistic. Justify your response. **I have chosen oligopolistic, would love some other input.

b) Assess how the type of market structure impacts your chosen company's financial performance as measured by performance variables over the past three years. Support your response with data and graphs illustrating two performance variables of your choosing (e.g., sales, net income, stock price) over time.

c) How would possible changes in the industry's market structure impact your chosen company's business strategy in the future? Keep your company's current business strategy in mind in your response.

Answer 1

a) Walmart is a company that operates in retail industries. in retail industry prominently there are few only that are giants ones and are leading and some sort of controlling the market. Thats why it is correct to consider the market as oligopolistic.

b) Under oligopoly market there is some market concentration in hand of some players over other reaminig players although there are only few sellers. Walmart has competetive advantage other giant retailers like Costco and Target and is enjoying the power. Because of such power it holds the maximum market share and it is also very much capable to striffle new competition by using tactics as providing more choices and lowering cost . This is purely a oligopolistic leader characetristic.

Over time its share has increased only along with sales as its market base increases. E commerce of Walmart is groiwng 60% annually from last four years. It has on average 20% growth in share price from last few consecutive years.

c) Currently Wlamart focuses much on two things that have given it its competitive advantage - broad consumer choice and lowest price in market.

If the company would be running in different structure-lets say monopoly- then obviuosly it would not be provding at lowest possibel price. Being a monopolist would have made Walmart to cash consumer surplus as much as possible. This would involve chraging higher price to cream out the maximum surplus and also the choices woulld have been reduced too.