Walmart a monopsony?
Wal-mart is one of the best examples of pricing power. According to Barry Lyn here are a few facts: One in every five retail sales in America is recorded at Wal-Mart's cash registers, that the firm's revenue nearly equal that of the next six retailers combined, that for many goods, Wal-Mart accounts for upward of 30% of U.S. sales, and plans to more than double its sales with the next five years. Most people would state that Wal-Mart's rise had been good for the nation, but the issue is how Wal-Mart is going to use its power in the future. Wal-Mart is like any other monopsonist in that they do not participate in the market so much as to use its power to manage the market. Also, according to Barry Lyn, author of this article, Wal-Mart has grown so powerful that it can turn even its largest suppliers, and entire oliogopolized industries, into extensions of itself. The effects of this practice are most obvious in Wal-Mart’s horizontal competition against other retailers. Many businesses today are being affected by how Wal-Mart has grown. What do you think will happen in the next five years?
1 comment:
The next five years will most likely be the same for walmart. They are a very dominate power in the selling market and for good reason. Unless someone is willing to make less money to try to undercut walmart, than we will most likely not see anything different than what we do now. The one thing that i have been thinking about is what about 15 years or so down the road. Walmart will most likley have every small supermarket etc and if i were walmart i would use this to my power. They could be the niche of their market, and why not raise the prices of the goods because by this time there will be no other competition. This is what I think possibly could happen in the future, walmart could just over take everyone and then just raise the prices on the consumers and we will really have nothing we can do unless the government would step in....just a thought!!
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