Posted: August 10th, 2022

Walmart Economic Analysis

I need help writing my essay – research paper see attached outline that was approved for this project. Also, here are the professor’s notes from the Outline – please take these into consideration.

Professor notes from outline:
many papers written about Walmart, so be very careful of the similarity scores,

Make sure each category is clear and covered.

Make sure to write a paper and not a book, stay within the allowed limits.

Make sure the similarity score is below the allowed level, the powers tat be are not merciful when over (at least currently) with no re writes

Made sure all references are Ace homework tutors – APA format. (higher penalties)

Instructions:
Economic Analysis of a Domestic Firm
Choose one of the following two assignments to complete this week. Do not complete both assignments. Identify your assignment choice in the title of your submission.

Select a Fortune 500 company (use this list for help identifying companies: http://fortune.com/fortune500/ (Links to an external site.)). Look up the company’s annual report (Fortune (Links to an external site.) conveniently provides links to the annual reports for these companies). In a paper, (you might find this link (Links to an external site.) helpful for reading an annual report):

Identify background information on the company, including the company name, ticker (stock) symbol, GICS Sector, and GICS Sub Industry.
Assignment Help – Summarize the products the company produces and sells and who their target customers are.
Describe factors that could shift the demand curve for the company’s product(s) (see the risk factors discussed in the K-10).
Describe factors that could shift the supply curve for the company’s product(s) (see the risk factors discussed in the K-10).
Describe whether the company’s product(s) would be expected to have an elastic demand or inelastic demand.
Ace my homework – Write my paper – Online assignment help tutors – Discuss the firm’s profitability with an explanation of the difference between accounting profit and economic profit.
Examine the costs the company incurs and discuss whether the majority of costs are fixed or variable in nature.
Describe the market structure that best describes the market the firm is in (see modules 5 and 6).
Analyze how the market structure affects the profitability and pricing power of the firm.
Adhere to the following standards:

Your paper should be 8-10 pages in length, not including the title or reference pages.
Your paper should include at least 5 scholarly (library, not Google) sources (use the Economics Library Guide (Links to an external site.) to start your research).
Sources such as The Balance, EconomicsHelp.org, Investopedia, and similar websites are not acceptable.
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Walmart Economic Analysis

Colorado State University-Global Campus
ENC210 Macroeconomic Principles

Walmart Economic Analysis
Introduction
Walmart is a global retailer, with most of its stores all under one roof. It is considered the world’s largest retailer and a disruptor in its rights as it has vastly transformed the retailing industry. The company was established in Delaware in 1969 and currently commands a larger percentage market share in the retail industry. This leading position has been achieved partly due to the retailer’s aggressive expansionist policies, with a keen eye on the provision of a diverse array of goods to local markets across the U.S. Paruchuri et al. (2009) outlines the Walmart remains to be the leading retailer taking a considerable 35% of the market far above other brick and mortar stores across the country. The structure of the retailer has been hailed to play a key role in enabling its success.
Company Background
As a discount retailer chain, Walmart, has had the ability to drastically reduce costs and thus rapidly capture a larger percentage of the market in the U.S. (Thomas and Bromley 2002). Along with this explanation, other suggested explanations for their success within the American market include the presence of a higher purchasing power [due to multiple decades of physical presences and consistent growth] talent acquisition, greater investment in logistics, distribution, and adequate inventory management, shared operation cost and diverse customer demands, as well as wholesaling and retailers practices, play a role in its leadership (Paruchuri et al. 2009). This allows Walmart’s revenue to exceed a larger percentage of companies in the retail sector combined.
In their annual report, Walmart accrued a net profit of $318 billion; Walmart U.S.’ first-quarter sales grew 10% in 2021, mainly bolstered by its eCommerce platform sales that grew 74% to the COVID-19 pandemic (“Wal-Mart Stores Inc. – AnnualReports.com”, 2021). The companies rapid and sustained growth is owed to the organizational vision, mission and general culture that strives to minimize the cost of sales and maximize profits leveraging on providing quality products. The vision and mission of the company are outlined in simple aspects such as its logo. The company logo represents a spark or asterisk, which shows its impact on the retail industry (“Wal-Mart Stores Inc. – AnnualReports.com”, 2021). Each of the asterisks entailed in the company’s logo symbolizes ideas that have worked to make the company successful.
The company has achieved its success through a continued drive for expansion to capture a larger consumer base. Walmart has done this by opening thousands of stores across the U.S. Research indicates that 67% of all retailers in the U.S. are located within five miles of a Walmart (Paruchuri et al., 2009). The large presence has worked to ensure global awareness of the brand to the average consumer within urban and rural areas. Their success, however, has been very disruptive to local markets, so much that a term; the Wal-Mart Effect.
The Wal-mart effect is a theory that was coined to outline a phenomenon of disruption where the establishment of a Walmart chain in any locale across the country resulted in a local effect that was compelling smaller competition out of business, as well as driving down wages, on the positive side its affordability keeps inflation low and sustains higher productivity sustaining profits. (Paruchuri et al., 2009). Implying its domination of the market and overall ability to define markets under a neoclassical model (as it affected the prices, supply and demand of goods and services). In the Global Industry Classification Standard (GICS) sector, Walmart belongs to the consumer discretionary with a subsector in the retailing industry. This is a sector that covers goods and services for which consumers general demand is contingent on consumer financial ability. Changes to the structure of the Walmart retail market poses opportunities for the humongous brand and communities, as well as risk for local municipalities. Overall, Walmart dominates the retail sector and continues to experience exponential growth- their growth is only meant to increase with its move to establish an online presence, which is a fast-rising market.
Walmart Economic Analysis (Body)
The company is a retail brand; hence, they deal with household goods, snacks, pharmaceuticals, and parking spaces. Overall, the store’s main ideology could be implied to follow the theories of McDonaldization, which relies on four main principles- efficiency, predictability, control and calculability (Ritzer, 2010 – Essay Writing Service: Write My Essay by Top-Notch Writer). McDonaldization outlines that a modern society modelled under the neoclassical economic model- derives its functionality on the principle of rationality which requires acceptance of the rule of efficiency in order to be practical in business. The resulting aspect is a general phenomenon of uniformity across society. Jackson (2004) outlines that global expansion requires attention to location, as people’s cultural value systems are fashioned differently across the board. But also, under the era of globalization, value for efficiency has come to overlook cultural implications and shine a spotlight on the McDonaldization of economic processes in a bid for efficiency.
Walmart’s uniformity in its stores differentiates them from many retail giants. A uniformed approach to consumerism creates more predictability in its services, driving the consumer trust higher. Ritzer (2010 – Essay Writing Service: Write My Essay by Top-Notch Writer) outlines that this is because people across the world, and especially in the west, have come to prefer a world where there are no surprises. Having the same store design, same outlay of products across all their stores, and generally similar ambience and environment drives up predictability, forcing more customers to become dependent on Walmart for products, as such more likely to become to shop with them. The company also owns the stores; hence their overhead costs and rent are all in the profits (Chiu, Hsu, Mao and Wang, 2021). The margins, and control of the product listed, atmosphere, employee behaviour and general setting of the store across all their locations also enable the company to register 100% profits on sales.
Target customers are usually the young and old who visit malls. Axford (2014: 2024 – Essay Writing Service | Write My Essay For Me Without Delay) states that the world has many cultures of its own that define reality differently relative to their own value systems and that they are meaningful frames of the social organization even within a nation-state. With greater economic growth, consumers disposable income has come to rise to cater for more spending (Ritzer, 2010 – Essay Writing Service: Write My Essay by Top-Notch Writer). This is more pronounced in the U.S., where globalization has brought about increased consumerization, due to the diversity of goods, at wider price variations, creating an all-inclusive consumer list of goods and an even greater choice for goods and services. Researchers outline further that global interconnection is the acceleration of the integration between nations into a global system of development fuelled by consumption, it contributes to the expansion of cultural ties between different social values, but it risks the dangerous loss of cultural identity as younger generations continually lose their ties to their cultures and become faceless mirroring common fashion, food, consumption and preference across the board. (Raikhan et al. 2016: 2024 – Do my homework – Help write my assignment online). Essentially implying that a consensus (global order) has been established and created sameness within cultures through acculturation and manifested in a standardized form of living in regards to all aspects, even with economic practices. This creates a greater likelihood for consumer manipulation through advertisements and generally similar consumer behaviour across the board. A factor that Walmart has capitalized on for their own success.
Now people prefer to shop in one place. The adaptation of McDonaldization models to retailing, especially for Walmart, ensures predictability, control, efficiency, and calculability. Control implies automation; calculability reinforces quantity provision rather than quality; predictability emphasizes goods and service provision sameness regardless of the store location around the world (Ritzer, 2010 – Essay Writing Service: Write My Essay by Top-Notch Writer). The sameness is a holistic aspect that entails Walmart business model and has become more emphasized with the development of technology (Jantzen et al., 2009). This offers more convenience for the clients (Tan et al., 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online). The emphasis on rationality is seen to replace traditional retailing with a logical approach to the provision of goods and services. There is an emphasis on consistency and constant availability of goods and services. This manifests in the compression of time and space, along with increased interaction between cultures and globalization which has led to an increase in the exchange of commodities, people and ideas; a global consciousness defined as cosmopolitanism has emerged. (Turner and Holton, nd). It is ultimately bringing about greater conveniences and establishing Walmart as a market leader as it is present in almost all urban and rural centres.
The resulting phenomenon of a large presence has outlined a generally consistent demand curve for Walmart. This implies that their stores are popular all over the U.S. Brendan and Lundsten (2014: 2024 – Essay Writing Service. Custom Essay Services Cheap) establish through research that Walmart tends to go for younger and older generations, as most of Walmart’s shoppers, 70.6% have an income below $75,000, compared to Festival Foods shoppers who are middle-aged with 55.4% having an income above $75,000. Walmart’s biggest and most obvious effect- named prior- the Walmart effect plays a significant role in its domination driving demands to the stores’ goods. Brendan and Lundsten (2014: 2024 – Essay Writing Service. Custom Essay Services Cheap) outline that Wal-Mart provides lower prices to consumers, creating a competitive pressure within its competitors by lowering prices that consumers pay for goods forcing even those who do not normally shop at Walmart to shop there due to closure or their competition as they endure reduced profitability. This sustains an insatiable demand for its services as there is no other option since the Walmart effect results in the closure of smaller competitors.
Additional to Walmart’s wide variety of goods and services, social capital in the area dictate demands for the product. Wal-mart effect considers a large discounting chain’s ability to negatively affect small independent stores of downtown shopping districts, resulting in the erosion of tax bases, lower employment, reduced wage, increased poverty levels and increased community disintegration (Paruchuri et al., 2009). The effect on the community and the local government can be devastating, affecting the social and cultural capitals of the regions wherein it is established. Basker (2007) provides proof from empirical research showing that the Wal-mart effect on local government and communities results in lower government expenditure on social welfare services, increased urban sprawl, traffic, crime and a general reduction in social capital. Still, their goods are defined as conveniences associated with one-stop shopping and consistency in availability of goods- consumers are attracted to the store after accounting for the prices and location of the stores. Basker (2007) outlines that the “parameter estimates for a demand equation allow consumer preferences to depend on travel distance, price, individual demographics, and store identity in a flexible way imply that the average consumer would be willing to pay a premium to shop at Wal-Mart over the alternatives.” These aspects all result in a combined general demand for the store’s goods, increased consumer expectation even for future surges in prices, and general accountability by Walmart to adherence of consumer tastes and preferences, especially to household items.
Walmart supply curve is also consistent; however, the market always dictates how the consumers will react. Walmart has a larger market share across the U.S. Franklin (2000) outlines that Walmart market share remains to dominate the lower-income and smaller metropolitan communities- middle-class and lower-income regions mostly. Coupled with the Wal-Mart effect, the oversupply of retail outlets is a factor that was covered earlier, outlining that it has the ability to decrease social capital, and in the case of supply, the larger Walmart presence results in its ability to dominate the supply chain due to the sheer ability to tap into capital and define the supply chain. Basker (2007) outlines that Walmart is a leader in the retail sector on many fronts as it applies the use of;
1. Information technology
2. Has a great supply-chain management
3. Established private-brand that allow it to purchase more product directly from manufacturers overseas
4. embraces a low-service “one-stop shopping” format
All these provide a useful prism through which one can evaluate its market dominance and control of products. This is aided by the fact that Walmart commands a significant market share in many markets in the U.S.; hence their popularity is hinged on the service, coupled with its insistence on building quality standards above the local competitors (Durand and Wrigley, 2014: 2024 – Essay Writing Service. Custom Essay Services Cheap). The stores have to maintain their quality service for continued return customers.
Technology is a factor that can contribute towards the shifting of the Walmart supply curve. Durand and Wrigley (2014: 2024 – Essay Writing Service. Custom Essay Services Cheap) outline that there is a greater need to implement supply chain management in order to dominate any market, and technology plays a key role in sustaining a proper supply network. As mentioned above, customers do not like uncertainty and favour controlled, predictable, and efficient service providers. Durand and Wrigley (2014: 2024 – Essay Writing Service. Custom Essay Services Cheap) outline that Walmart has supply networks that vary, constantly changing with better industry standards and adopting best practices from other regions. They are regionalized and some even globalized to ensure consistency in goods and services provided. This sustains greater expectations from customers as it retains a greater power of distribution.
The company mainly provides essential and convenient goods and products. The type of products sustains a form of inelastic demand since they are essential products. Walmart considers market segmentation to ensure better product placement. Market segments are groups of consumers with similar wants and needs, i.e. they are homogenous. Segments are pieces of a larger market that are alike (Vuon, Nguyen and Vuong, 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online). Here we identify pieces of a market with common needs and characteristics which define the larger group. Product differentiation is also an important tool of product placement. These are the changes of marketing mix elements that work to help see differences between products and services. Segmentation’s benefits is that product can be created to fit a particular need; it can be priced according to its position [e.g. Higher prices for the luxury market and brands owned by Walmart], promote the proper image for the desired buyer and select better distribution line for the proper market (Vuon, Nguyen and Vuong, 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online). Segmentation increases the effectiveness of sales and reduces inefficiency. This increases customer loyalty to brands and promotes greater trust in the brand. This has also developed a market structure that has worked to suppress new entrants and sustained increased exit rates (Paruchuri et al., 2009)—essentially working to sustain Walmart’s dominance and continued profit maximization at minimal costs of production.
Conclusion
Walmart retains its position as the leading retailer in the country partly due to its wide representation across a vast region of the U.S. Coupled with its uniform organization, an adequate workforce, holistic supply and inventory management chain, Walmart continues to dominate the U.S. market by share, killing of competitors in the process in a phenomenon defined as the Wal-Mart Effect. This ensures that the company retains wide demand, universal presence, and also wide supply with a diverse range of products. Since they sell convenience products all under one roof in a one-stop-shop manner and at low prices, the retailer retains an inelastic demand reinforcing their position to their location even further.

References
Axford, Barrie (2014: 2024 – Essay Writing Service | Write My Essay For Me Without Delay). Theories of Globalization. Oxford: Wiley, 2014: 2024 – Essay Writing Service | Write My Essay For Me Without Delay. Print.
Basker, E. (2007). The Causes and Consequences of Wal-Mart’s Growth. Archive.nyu.edu. Retrieved November 1 2021, from https://archive.nyu.edu/bitstream/2451/23347/2/Geography2.pdf.
Brennan, D. P., & Lundsten, L. (2014: 2024 – Essay Writing Service. Custom Essay Services Cheap). Walmart vs. Festival Foods—David and Goliath? Journal of Real Estate Practice and Education, 15(1), 43–54. http://www.jstor.org/stable/24863197
Chiu, Y., Hsu, Y., Mao, X., & Wang, J. (2021). An Empirical Study of Holiday Season Discounts: A Comparison Between Third-Party Marketplace Sellers and Fulfilled by Walmart Sellers. SAGE Open, 11(2), 215824402110241. https://doi.org/10.1177/21582440211024179
Durand, C., & Wrigley, N. (2009). Institutional and Economic Determinants of Transnational Retailer Expansion and Performance: A Comparative Analysis of Wal-Mart and Carrefour. Environment And Planning A: Economy And Space, 41(7), 1534-1555. https://doi.org/10.1068/a4137
Franklin, A.W. (2000). The impact of Wal-Mart supercenters on supermarket concentration in U.S. metropolitan areas. Agribusiness 17:105–14.
Jackson, Peter. (2004). “Local Consumption Cultures in A Globalizing World.” Transactions of the Institute of British Geographers 29.2 (2004): 165-178. Web.
Jantzen, R., Pescatrice, D., & Braunstein, A. (2009). Wal-Mart and the US Economy. Eastern Economic Journal, 35(3), 297-308. https://doi.org/10.1057/eej.2008 – Affordable Custom Essay Writing Service | Write My Essay from Pro Writers.19
Paruchuri, S., Baum, J., & Potere, D. (2009). The Wal-Mart Effect: Wave of Destruction or Creative Destruction?. Economic Geography, 85(2), 209-236. https://doi.org/10.1111/j.1944-8287.2009.01023.x
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Ritzer, George.(2010 – Essay Writing Service: Write My Essay by Top-Notch Writer) Mcdonaldization. Los Angeles, Calif.: Pine Forge Press, 2010 – Essay Writing Service: Write My Essay by Top-Notch Writer. Print.
Turner, Bryan S, and Robert J Holton (nd). Chapter 5 Theories of Globalization and Culture. Theories of Globalization. Print.
Tan, B., Yan, J., Chen, S., & Liu, X. (2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online). The Impact of Blockchain on Food Supply Chain: The Case of Walmart. Smart Blockchain, 167-177. https://doi.org/10.1007/978-3-030-05764-0_18
Thomas, C. J., and Bromley, R. D. F. (2002). The changing competitive relationship between a small town centre and out-of-town retailing: Town revival in south wales.Urban Studies 39:791–817.
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Vuong, Q., Ho, T., Nguyen, H., & Vuong, T. (2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online). Healthcare consumers’ sensitivity to costs: a reflection on behavioural economics from an emerging market. Palgrave Communications, 4(70). https://doi.org/https://doi.org/10.7910/DVN/CWHOIC

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