Current Market Conditions

Current Market Conditions Paper
ECO 365
University of Phoenix
April 6, 2011












Introduction
In a society that has seen such a drastic downturn in the economy, people are searching for the best possible bargains they can find.   People across the United States are looking for ways to save money; thus, searching for stores that will provide them with everything they need at a lower cost.   Companies all over the United States are fighting to stay competitive and are seeking ways to restructure their company and still provide for consumers the best possible prices.   Companies such as Wal-Mart do not have to change their structure to fit the demands of consumers because it already offers its customers brand name items at lower prices.   Wal-Mart’s basic structure has helped make it a powerful retail business, and a place consumer’s love.
Market Structure
Wal-Mart Stores Inc. opened its first discount store in 1962, Sam Walton had no idea his business would be the success that it is today. The reason for Wal-Mart’s success is their ability to create a basic structure for their business. Wal-Mart offers a variety of well-known brands and sells them at about 5-10% cheaper than other retailers.   This makes Wal-Mart a powerful force in the retail business. Wal-Mart Stores is considered an oligopoly market structure. Colander (2008) defines oligopoly as a market condition in which sellers are so few that the actions of any one of them will materially affect price and have a measurable impact on competitors. With their continued success, Wal-Mart’s market structure could also be considered a monopolistic competitive structure. Wal-Mart has all the characteristics of a monopolistic competitive structure as described by Colander (2008), they have many sellers, offer differentiated products, and they exhibit multiple dimensions of competition.
Wal-Mart’s success lies in their product differentiation through advertising. Although advertising has a wide...