Market Model Patterns of Change Essay Example | Topics and Well Written Essays - 750 words - 1

Market Model Patterns of Change - Essay Example Wal-Mart is a perfect example of a business operating in an oligopolistic market structure. This is because they have low prices in the market enabling them compete healthily with other businesses dealing in similar products/services. Secondly, Wal-Mart operates with fewer sellers in the market giving them mutual interdependence over the other firms in the business. The long term effect of Wal-Mart operating an oligopoly will result to rise of economies of scale. This is because they will take advantage of having been in the markets to put barriers to other business wishing to join the business. Secondly, Operating under oligopoly market structure, Wal-Mart may collude to form a monopoly form of market structure, therefore, dictating their terms in the market. As a short term effect, Wal-Mart will be forced to renew their strategies of working because they will be facing different competitors in the market (Roberts & Berg, 2012). Factors affecting Wal-Mart competitiveness is their capability in retailing. The business has various stores situated in various strategic places. These stores seek their profits by retailing their products through high volumes and using low mark-ups to give them a competitive advantage over other business dealing in the same line of products. Secondly, Wal-Mart achieves their competitiveness owing to their standardized pallets, tight delivery schedules and computerized tracking. This has given them an edge over many businesses dealing in the same line since they are not in a position to raise enough capitol to ensure efficiency in the systems. They are also able to use their technology as a source of marketing, therefore, minimize on their revenue spending. Thirdly, Wal-Mart prices play a significant role in influencing their activities and encouraging their competitiveness to other businesses. This is because it is an economy of scale, therefore, they purchase raw materials at a m uch cheaper price