Business Paper 1

Submitted By eirejones
Words: 738
Pages: 3

Is Wal-Mart Good for America?

I do not believe that Wal-Mart benefits America. If people cannot afford these low prices then they are losing out on low prices and U.S. employment. In 1994, Rubbermaid was Wal-Mart biggest customer and was voted nation most admired company. As Rubbermaid joined with Wal-Mart their company profited in bigger ways than none. But when the cost of raw material had increased, Rubbermaid went back to Wal-Mart and asked if they could increase the price on their products, Wal-Mart refused to increase the price. Wal-Mart was very vindictive in the meeting with Rubbermaid. Walmart suggestion was that you are not going to tell us what to do and we don’t care what it does to you. Wal-Mart decision caused Rubbermaid to plunge into deep trouble. In 2004, Rubbermaid had to auction off its birthmark and the original plant was closing. A thousand of jobs were lost because of Walmart decision on not to spike higher prices to the consumers. When Wal-Mart was in trouble and the stock was decreasing, they turned to manufactures that are oversees such as China to crank sales products. Much bigger profits on items made from low wage countries caused a tremendous change in Wal-Mart. As Wal-Mart dropped these manufactures in America, jobs were lost because of overseas suppliers. This does not benefit America, for without these jobs many people will not be able to afford these low prices that Wal-Mart produces. Wal-Mart should look to help their own people first rather than just focus on what benefits that can reap just for themselves. One principle that I observed in the episode is principle 4, people respond to incentives. Wal-Mart is known to strive to keep their cost as low as possible. Wal-Mart has something called the opening price points which is rock bottom prices that Wal-Mart show cases in certain displays. These are incentives to keep customers attracted to the store. If people see an eye popping price point they are sold because everyone wants to get the best price for an item that they are going to purchase. Another principle that I observed in the episode is Principle 1, people face trade-offs. Some people say that the effects of trading with China has resulted in job loss. This is true for some cases for, trade flows one way or the other. Some number of jobs have been eliminated because Chinese competitions while other jobs have been created because of Chinese competition. The tradeoffs of Chinese competition can be good and bad. The last principle that I observed from this episode is Principle 2, the cost of something is what you give up to get it. Wal-Mart may be giving up job losses but they are gaining a tremendous profit in sales and product activity. Everyone is not