Market Trends For Wal Mart Essay

1997 words - 8 pages

Market trends refer to the general movement of an investment market (wiseGeek, 2009). In every aspect of the any business, market trends are important and should be evaluated to help with key initiatives. Wal-Mart, Inc.'s senior executives will help to make key decisions on challenges ahead or key issues facing the companying on a short and long-term basis. For this week's team paper, market trends will be reviewed in the areas of market structure, new companies entering the market, prices, technology, and productivity. Furthermore, additional trends will be reviewed as it relates to cost structure, price elasticity of demand, competitors, supply and demand, and impact of government regulations.Market StructureWal-Mart, being the leader in retail, has strategized during this season to maximize profits for its store, contingent upon its competitors' strategy. As (Colander, 2008) explains how organizations in an oligopoly market reacts, "If my competitors act one way, I'll do X, but if they act another way, I'll do Y" (p. 289). For example, in reaction to its competitors' advertising and to ensure that it remains ahead of this market trend, Wal-Mart kicked off its "Pre after Thanksgiving" sales on November 21, by offering between 42% to 60% savings off its already low prices (Wal-Mart 2009a). According to its website, "U.S. Shoppers who want to get a jump start this weekend can find values in Entertainment they would expect to see after Thanksgiving Day. We will continue to deliver amazing savings on popular items, and to do so often." As retailers continue to compete with each other for business, shoppers will continue to reap the benefits.Impact of New CompaniesAs new companies enter the market on a global level, keeping prices low will be a key aspect. Although Wal-Mart's focus is keeping consumers happy by offering low everyday prices (Wal-Mart Website, 2009) this strategy will continue to allow Wal-Mart greater success. As more companies enter the market, this may allow Wal-Mart an opportunity to drive prices even lower domestically and globally. To continue with low prices on a global front, Wal-Mart must continue to focus on their International Segment. One of Wal-mart's former presidents and CEO of the International segment stated "We need to be the growth of Wal-Mart some day when the United States slows down" (as cited in Molin, 2004). The International Segment generated about 24.6%, which includes various components of discount stores, supercenters and Sam's Clubs operating outside the United States (Wal-Mart 2009d Annual Report, p 15 para 7). For 2009, foreign currency exchange rates had an unfavorable impact of $2.3 billion for this segment (Wal-Mart 2009e Annual Report, p 16 para 5). Because exchange rates are not usually predicted or stable, this may continue to be an issue for Wal-Mart's International Segment.PricesOne of Wal-Mart's commitments is to provide everyday low prices. This commitment has been an obstacle for the retail...

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