Case Study: Can a company be too successful? WAL-MART Case Study: Can a company be too successful? http://www.pbs.org/itvs/storewars/stores2.html http://www.pbs.org/itvs/storewars/sitemap.html

Research Article Findings on Market Power Wal-Mart Supercenter: (size of 3 Football Fields)

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2011 3,600 Stores In USA Total Revenue: 1995 = 100 billion 2003 = 245 billion 2011 = 450 billion

Wal-Mart Supercenter: ANGRY Communities Fight Back Wal-Mart Supercenter: (size of 3 Football Fields) Zoning Analysis

Predatory Pricing Predatory Pricing is purposely setting your prices very low in order to put other firms out of business Your intent is to raise prices later Illegal by Anti-Trust Laws

2011 450 billion

2011 3,600 Stores In USA Total Revenue: 1995 = 100 billion 2003 = 245 billion 2011 = 450 billion

Reasons to HATE Wal-Mart Keeps wages low Puts local companies out of business Accused of “abusing” worker rights Push suppliers too hard? Predatory Pricing?

What is Economies of Scale? How is Wal-Mart so efficient? What is Economies of Scale? More efficient firms => have lower costs => can offer lower prices => other can’t compete

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Benefits Costs Is Wal-Mart good for the U.S. economy?

Reasons to LOVE Wal-Mart Keeps prices very low Saved consumer 20 billion a year Overall, may save 100 billion per year This Lowers inflation and ↑ GDP Circular Flow PRODUCERS CONSUMERS Factors Products Land, Labor & Capital

Should Wal-Mart be regulated?