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Walmart - Market Trends

Essay by   •  May 23, 2012  •  Research Paper  •  1,581 Words (7 Pages)  •  1,494 Views

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Market Trends

Marketing trends allows a trader and investor the option to apprehend profits. In either a short-range or longstanding period the general trending market shows the flow of one price to the next and generates the revenues and losses. Marketing trends consists of four different factors. The four factors are government, international transaction, speculation, and expectation, and supply, and demand. These factors can help companies to expand and bring in more revenue. Wal-Mart is a large retail company that wants to expand even larger than it currently is today. Finding the best marketing trends that the customers are in touch with would help the company. In the following paragraphs Learning Team B will discuss if the current market trends that Wal-Mart is following will continue or need a change to help the company expand.

Market Structure

Wal-Mart currently operates using the Oligopoly market structure. Though market trends typically change over-time, Wal-Mart most-likely will not change their market structure. Over-time Wal-Mart has positioned the business to grow. The leverage is obtainable and making a change to the market structure when it is not needed could have an adverse effect on the business. With the oligopoly market structure there are very few sellers and actions of the sellers have a large impact on the price of the other competitors. Though a few companies are similar to Wal-Mart, Wal-Mart has a distinguish attribute from the others that offers every day low prices. The marketing structure used by Wal-Mart works best for the firm because entry and exiting is very difficult, thus keeping new competitors out.

Effects of competition

Wal-Mart currently has 16 other top competitors in the retail field. Wal-Mart net sales are currently high but needs improvement. Bill Simon, Chief Executive Officer of Wal-Mart is looking to start a team that will enforce an aggressive plan that will ensure the commitment Wal-Mart has for the consumers. When Wal-Mart start offering broader types of merchandise and align the presentations of the merchandise to fit the need of the customers' competition would not be an issue. A current advantage that Wal-Mart has on the other retail store is the ability to meet the need of the customer by having store in operation 24 hours a day. The effect of this abundant opportunity is keeping employees. Many of the competitors want to try this type of an approach, but the risks are just too high. Wal-Mart will continue to knock the competition out of the park with the low prices, and above average customer service.


The prices that Wal-Mart offers to the customers are continuing to help this company expand. At the end of the 2011 fiscal year, Wal-Mart has an increase in the net sales of 3.4% to $419 billion. The operating income from Wal-Mart has also increased to 6.4%, which is more than $25 billion. Wal-Mart could see almost $11 billion in free cash flow in the 2011 fiscal year. The shareholders of Wal-Mart also saw $19.2 billion in dividends and share repurchases for the close of 2011 fiscal year. Wal-Mart is keeping up with technology. The prices are becoming more transparent. Keeping up with the productivity loop allows Wal-Mart the opportunity to ensure each day low prices. Wal-Mart has multi-channel inventions like Manufacturer-to-Supplier, and Available on arrival, which gives the customers the option to shop as he or she pleases. Expanding Wal-Mart internationally comes from the ability of Wal-Mart providing sound, reasonable prices to the customers.


Wal-Mart has kept up with today's technology by offering a new service that will allow customers to stream their DVD and Blue-ray movies on devices that connect to the Internet network. This idea is perfect in today's technological era. Currently many devices customers own consist of TVs, smart phones, tablets, and gaming consoles. Because of this, Wal-Mart has invented a way to allow customers access to reconnect with movies that they already have purchased on different devices. According to "Wal-Mart Will Convert DVDs to Digital, Wal-Mart customers can bring their DVD and Blu-ray movies to the stores and receive digital access to the titles from the partnering studios -- Paramount, Sony, Fox, Universal and Warner Bros" (Nayab, 2011). By offering this new services Wal-Mart has embarked into new technology, called cloud-based streaming, which is currently obtainable through Hulu, Netflix, and cable companies' on-demand services. It is not a guarantee that this service will be a success but nevertheless, Wal-Mart is continuing to becoming innovative and able to change with the trends of today.

Diminishing Marginal Productivity

According to Nayab (2011), "The law of diminishing marginal productivity holds that the marginal increase in total output declines with increase in additional units of a variable input after a certain point" (para. 1). Productivity of workers will begin to decline at a certain point in their shift. Moreover, adding more workers to accomplish



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