Wal-Mart and Globalization
Wal-Mart is an organization that is dedicated to keep low prices for the consumers of America. The low prices that they keep come at a cost not only to their employees but to other industries trying to make enough money to stay in business. I believe that Wal-Mart is destroying American manufacturing and also its economy, is it intentionally, that I do not know.
Consumer sees the low prices but not what behind it all. Most employees and outside companies/industries are trying to make ends meet, for an example, Rubbermaid, wasn't well known until their variety of products donned the shelves of Wal-Mart. They were voted as the most admired company in America for its quality due largely to its partnership with Wal-Mart. Raw materials among other materials of production increased for Rubbermaid which meant a price increase to all of its retailers. Wal-Mart wouldn't accept the price increase and subsequently dropped a number of Rubbermaid products, which began the decline for the company.
Wal-Mart is a success because it sells products at low prices that customers want to buy, satisfying customer's wants and needs at the same time Wal-Mart's lower prices draw customers away from other smaller businesses, hurting the community. For an example, America bought so much from China and company, like Thomson/ RCA, suspected that the Chinese were price dumping. Five Rivers Electronics sued the Chinese that lead to many companies going out of business. Wal-Mart sided with the Chinese at that time but FRE still won the lawsuit which lead to an immediate raised in their prices on imports. A trade agreement was signed with China opening the gates to an untapped market. China pays its workers about 30 to 40 cents per hour, which in turn drives down the cost for foreign goods. Wal-Mart can make between 60 and 80% profit on foreign goods, only 20% for domestic.
Wal-Mart is efficient because of its low cost, global sourcing, and being one of the largest retailer, their competitors and other retailers that could not afford to pay their...