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Georgi Genchev
SES 360B
March 6, 2015
Assignment 6
Do you think Wal-Mart is abusing its monopolistic position in the marketplace or are
they just super-efficient in their business model?

Wal-Mart is certainly a giant on the market. The multinational retail corporation is one of
the Worlds largest companies and also the biggest private employer worldwide. In its warehouse
stores it offers prices significantly lower than the one of their competitors. The firm's revenue
nearly equals that of the next six retailers combined. But is Wal-Mart abusing its monopolistic
position in the market place or their success is a result of a super-efficient business model? I
would argue in favor of the first suggestion by providing examples of the retailers business
practices.
The effects of monopoly can sometimes be difficult to identify. But again we have easy
illustrations ready to hand, in a case from the midst of the last decade. Wal-Mart decided that it
did not approve of the artificial sweetener Coca-Cola planned to use in a new line of diet colas. In
a response that would have been unthinkable, Coca-Cola yielded to the will of an outside firm
and designed a second product to meet Wal-Mart's decree. One of the basic premises of the freemarket system is that actors are free to buy from or sell to a variety of other actors. Those who
would use the word "free" to describe the market over which Wal-Mart presides should first
consult with Coca-Cola's product-design department. These results were decided not within the
scrum of the marketplace but by a single firm.

Furthermore, the effects of Wal-Marts practices can also be seen in the horizontal
competition against other retailers. Every year, the landscape is littered with that many more dead
or half-dead retailers - including such once-big names as Winn Dixie, Albertsons, K-Mart, Toys R
Us, and Sears. While I was working in the Newport, RI, the Wal-Mart store was twenty
kilometers away from the town, so that it will not harm the local retailers. The company has
grown so big that has become a threat not only for the big players, but for the whole retailing
industry.
Another troubling fact is that Wal-Mart has gathered the power to dictate content, even to
the most powerful of its suppliers. Because no longer is the retailer's attention focused only on
firms that produce T-shirts, electrical cords, and breakfast cereal. Every day Wal-Mart expands its
share of the U.S. markets for magazines, recorded music, films on DVD, and books. This means
that every day its tastes, interests, and peculiarities weigh that much more on decisions made in
Hollywood studios, in Manhattan publishing houses, and in the editorial offices of newspapers
and network news shows.
Wal-Mart is indisputably an industry leader. Its profits are enormous and it provides goods
on a cost that no other company could afford. However, there is a price for that exploited
employees, bankrupting competitors laying off employees and people somewhere in Africa
working for five cents a day so that someone could buy a T-shirt for ten bucks or that Wal-Mart
could make a record profit for this quarter.