BUS 644: Operations Management
Prof Arthur Baldonado
11 February, 2013
Wal-Mart: What is it Good For
Small business is at the heart of the economies of small towns all over the United States. Yet, big box stores like Wal-Mart and Target are growing increasingly popular in these same communities. This is because they are able to provide a wide variety of goods and services and the lowest prices possible. In weaker economies, these convenient and thrifty options can help stretch a family’s wallet and minimize the time it takes to run a household. However, these benefits come at a cost. Many have argues that Wal-Mart destroys any competition in a small town, ruining small businesses. There are also arguments regarding social and logistic concerns related to having a Wal-Mart in your town.
Most notable to the concerns surrounding Wal-Mart are the economic concerns. To the average citizen living relatively near the Wal-Mart, economic concerns should tip the scales in favor of Wal-Mart. The retailer maintains some of the most competitive prices on the market. Stores often sell a vast variety of good at bargain prices. Even if you do not actually shop at Wal-Mart, the mere presence of Wal-Mart lowers prices in a community. According to Wal-Mart.com “the average American family saves $2,500 a year regardless of where they shop, since Walmart’s presence and leadership helps keep prices low.” (Walmart-Stores, Inc, 2012). It is easy to see how saving $2,500 a year can seem appealing. However, this same idea can cause local business to band against Wal-Mart. Most small businesses already price their goods as low as they can and still generate a profit. Being forced to price products lower can shut down many of these businesses. Additionally, these small stores cannot afford to stock the kind of inventory that Wal-Mart maintains. In many areas, Wal-Mart has devastated the small business driven down...