People pursue opportunities that increase their utility. They behave in a calculated manner, analyzing costs and benefits, which allow them to allocate their money to maximize their pleasure. There are constraints, however, on a person’s budget that forces them to rationalize their purchases. Lately, these constraints have risen with the unhealthy state of the U.S. economy. The American citizens have become increasingly concerned with their financial well-being. They are worried about the continuous rise in cost of living and the instability of the economy. As a result, the American citizens are forced to utilize their income in the most cost effective way. They search for low prices to get the most out of their dollar. As this pursuit for low prices intensifies no store has ...view middle of the document...
Consumers usually do not reduce their consumption of these necessities, such as detergent, but they search to find them at the lowest possible costs. Secondly, as the economy declines people are turning to Wal-Mart for the discretionary goods that they would normally buy elsewhere. For example, consumers are now purchasing their electronics from Wal-Mart because they offer better deals. The timing of the economic slump has allowed Wal-Mart to display their new markets, such as the grocery department. Thirdly, Wal-Mart has been expanding internationally. The economy outside the United States is prosperous and adding to the success of Wal-Mart. In the past year, international sales have risen a staggering 17.5% and have comprised 24.3% of overall sales. In general, Wal-Mart is a success because it offers a broad range of goods, including apparel, electronics, prescription drugs, and a supermarket, at low convenient prices. As it continues to grow, it will become increasingly more attractive to consumers.
The explosion of Wal-Mart reflects the current state of the economy. Though it helps individual people, it also hurts the economy by offering these prices at a large retail store. There is nothing wrong with searching for cheap prices, but Wal-Mart takes away from other businesses. Other companies struggle to stay afloat while Wal-Mart controls consumer purchases. The United States should focus more on quality and less on convenience in order to boost the economy. While Wal-Mart offers a great service to individual buyers, it offers a disservice to America as a whole.
Gross, Daniel . "As Economy Tanks, Wal-Mart Thrives ." Investing 2 Feb 2008 1. 17 Feb 2009
What is Wal-Mart’s contribution to Real GDP?
What is Wal-Mart’s standing in the stock market?
Has Wal-Mart saturated the U. S. market?
Will Wal-Mart be successful with the international expansion?