1. Case Study: Can a company be too successful?
WAL-MART
Case Study: Can a company be too successful?

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

3. Video #1

4. 2011
3,600 Stores
In USA
Total Revenue:
1995 = 100 billion
2003 = 245 billion
2011 = 450 billion

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

6. 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

7. 2011
450 billion

8. 2011
3,600 Stores
In USA
Total Revenue:
1995 = 100 billion
2003 = 245 billion
2011 = 450 billion

9. 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?

10. 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

11. Video #2

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

13. 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

14. Should Wal-Mart be regulated?