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Wal-Mart's High Cost of Low Prices Essay. 918 Words 4 Pages. Wal-Mart founded in 1962 by Sam Walton is now the largest American retail corporation. With thousands of chains of stores and warehouses Wal-Mart monopolized the American retail industry. In addition, Wal-Mart is the second largest retail corporation in the world employing of two.

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A particular factor cannot be held responsible for inflationary price rise. Essay on the Effects of Inflation: People’s desires are inconsistent. When they act as buyers they want prices of goods and services to remain stable but as sellers they expect the prices of goods and services should go up.

Low prices for consumers Walmart prides itself in having the lowest of prices. At times they are willing to take a short term loss to get the lowest prices. High efficiency standards from vendors In order to have such high efficiency standards, Walmart has innovated and come up with new practices in tracking and requires its vendors to use radio transmitters to make tracking faster and easier.

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This is achieved by having the lowest prices in the target market segment, or at least the lowest price to value ratio (price compared to what customers receive). To succeed at offering the lowest price while still achieving profitability and a high return on investment, the firm must be able to operate at a lower cost than its rivals.

For example, Supplier sells a soup powder at RM20 to Tesco, Tesco may sell for RM30, its means a Profit of on cost. Type of pricing strategy Tesco using now is cost-based pricing .Cost-based pricing affected the prices based on the costs for producing, distributing .Cost-based pricing only suite for Tesco own label products instead of national.

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Walmart; the High Cost of Low Prices Essay. High cost of low prices As Wal-Mart CEO Mike Duke indicated in an October 2008 speech to suppliers in Beijing, Walmart’s goal is to operate “a supply chain where goods are made in a way that protects our planet; where customers feel good about the safety, quality and durability of the products they buy; and where workers are paid well and treated.