How Walmart is becoming a monopoly Research Paper

How Walmart is becoming a monopoly - Research Paper Example The company operates each store from the products it stocks to front end equipment in order to speed check out. Wal-Mart invested heavily on cross docking inventory technique in order to achieve and fully realize economies of scale in cost. Wal-Mart Company was launched in 1962 by Cornerstone Walton. Walton had a strategy on the business to expand its stores in order to achieve higher sales volume at prices in comparison with other competitors. Due to discounts gained from department stores Walton initiated chains in Rogers, Arkansas in that year. By the year 1967, the company opened 24 stores across the state of Arkansas and recorded a high volume of sales. The company has continued to expand to major parts of the world in its quest for new markets. By 1978, Wal-Mart expanded into Illinois. It penetrated new markets such as pharmacy, auto service and jewellery divisions. Currently, it is arguably the most emulated retailer. Economies of scale: Currently, Wal-Mart enjoys many monopolies. Everywhere in the county there’s a Wal-Mart. Based on the economic concept it has a large size as well as a huge market share in their existing market. The economic theory of monopoly arises through the smaller the number of firms in the industry and large share Wal-Mart has; therefore, monopoly is deemed to exist. Monopolies arise due to free market (Rand, 1982). Economist considers that monopoly existed due to the existence of one supplier of a good. Its net sales increased by 5 % to 466.1 Billion (Rand, 1982). It has no close substitute within a given geographical location. In most regions, Wal-Mart has created a monopoly up to an extent that no small business can survive alone. Wal-Mart has acquired its dominant position in the retail sector by being relentlessly competitive. It has done everything to keep its cost price as low as possible. It utilises extremely efficient inventory