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Low prices Essay

Critics further say that although Wal-Mart is said to be powerful in the market because it has 3000 stores in United States and wants to add 1000 more, the managers and those people who run the company will continue to believe that that they have the market power and a few years later they may hear people asking what Wal-Mart is.

Critics believe that the company may collapse soon due to the former case of A & P grocery which had a chain of 15000 stores and was said to control the market, but due to the change in the society around it, the company has closed many of its stores in the country and changed so drastically that the new generation does not know about it. A & P was also said to sell at low prices which made its competitors go out of business, this shows that use of low prices is a sign of immaturity and lack of realism.

They concluded by saying that somebody always gets hurt in the economy and one cannot keep on practicing and doing things the old way and expect to acquire the benefits of the new way. (Sowell p9). However, free-market economists such

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as Michael fox are not worried about market power of Wal-Mart. He says that despite the company’s gains, concentration in the retail industry is still not high. He further says that since its success has been built, they only need to adopt information technology so as to streamline its operations.

This will lead to reduction of the less efficient rivals in the industry and those which will be lucky to remain will have to have a good competitive approach for the consumer dollars. (Lohr F6). Other criticisms received by Wal-Mart Company include insensitivity to its local communities, its employees and other constituents. The critics say that Wal-Mart would not be as successful as it is now if it cared about corporate social responsibility.

Proponents of Wal-Mart continue to support it and give it credit for saving 20 billion dollars of its customers as a result of exerting pressure on the prices of goods and a further 80 billion dollars as a result of price reduction it forces on its competitors per year. Wal-Mart gives its customers exactly what they indicate. They are able to detect what they want that is low prices by the way they make their purchases.

The company then gives the consumers their desire and the way that they safe costs and give low prices usually have a lasting impact which is seen as negative in the eyes of the beholder. They also argue that there is a high probability that those people who complain about the number of United States jobs which are being taken to other countries, especially the manufacturing jobs also make up a significant percent of Wal-Mart consumers due to the low prices which they find attractive. (Smith p11).

On the other side, Wal-Mart faces significant dangers especially if its consumers begin to worry about its effect on the economy. Communities and societies which worry about the detrimental effect of Wal-Mart and its low prices have restricted its growth in their area. The management of Wal-Mart as well as its proponents needs to ask themselves questions such as: will employees apply for jobs in Wal-Mart if better pay exists elsewhere? If consumers start to worry about the effect of low prices in the economy more that they welcome it, what will happen?

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