Current Event #4- Absolute Advantage

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Ashley Ding Principles of Business P5 Current Event #4- Absolute Advantage URL: Summary: The giant retailer Wal-Mart plans to open smaller stores in urban areas. It is considering starting small convenience stores in smaller storefronts. The new stores will be approximately 20,000 square feet, which is less than one-seventh the size of a normal Supercenter, but still eight times larger than 7-11. Wal-Mart has tested this idea out before, with four stores under the name Marketside in Arizona at around 15,000 square feet each. In addition, it has opened two hundred supermarket-like Neighborhood Markets at around 42,000 square feet each. It is expected that the new Wal-Mart concept of stores will be a fusion of the two. The positive side of this new plan is that more jobs
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Unformatted text preview: will be created as well as a health benefit, if it sells fresh food. However, other smaller competitors such as family businesses will lose customers. Opinion: This is an example of absolute advantage since Wal-Mart is able to buy produce cheaper than anyone else with its ability to negotiate deals. I feel like this is a great method to help increase Wal-Mart’s profits, but it will have a negative effect on the overall economy. Its competitors will lose business and profit. Wal-Mart is being too greedy at this point and is not thinking about the big picture. Also, this new plan may fail since it is very similar to the concept of a supermarket, which many exist today (i.e. Safeway, Lucky’s, etc.)....
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