Microeconomics Study Economic Behavior Individual Household Firm.

¶ … Microeconomics study economic behavior individual household firm. In Session Long Project, follow firm choice entire session. You analyze firm makes economic decisions events economy affect firm. Wal-Mart is the leading retailer within the United States of America, being also one of the largest global companies. On the Fortune 500 list of companies, Wal-Mart is located on the eighth position by its market value. The selection of this company for further analysis is based on the complexity of the firm, often revealed through conflicting elements.

For instance, Wal-Mart is the undisputable leading retailer in the U.S., but has been unable to consolidate a competitive position outside the country. Then, the firm registers impressive profits, but faces fierce criticism from the stakeholders. Then, from a strictly fiscal standpoint, the company follows a sustained growth trend, even in times of economic crisis, when other companies go bankrupt. All these elements, alongside with others, make Wal-Mart a notable presence within the business community and raise the interest of the researcher regarding the company's economic position.

At this level, for instance, emphasis would be placed on a multitude of economic concepts, such as scale economy or price sensitivity. In the case of Wal-Mart for instance, the company has been able to create scale economies by operating in efficient conditions and at large scales. This virtually materialized in the organization's ability to quickly access resources and allocate them in an efficient manner, in which it created advantages of consumers, as well as attained profitability objectives.

"As a dominant player in retailing, the company's size provides it with enormous efficiencies that it uses to keep costs low. For example, its size allows Wal-Mart to do its own purchasing more efficiently since it has roughly 5,000 large stores worldwide. This gives the company tremendous bargaining power with its suppliers. Not only does it get its products cheaper, but its size allows it more inexpensive distribution.

In addition, it has an enormous amount of information concerning consumer likes and dislikes, and it can spread its best practices across its entire store base" (Morning Star, 2010). Wal-Mart's success has also been based on its ability to approach and serve price sensitive consumers. These normally include people who seek lower prices as a result of lower levels of disposable incomes. They as such need the necessities of life, but at affordable prices.

The company targeted these consumers through its very business model, which seeks to provide the lowest price and help people save money and live better (Website of Wal-Mart, 2013). This business model has become even more successful today, as the economic recession created more price sensitive consumers. Recently, the company's strategy has been expanded to promote not only the lowest possible prices, but also to stimulate consumers to buy American made products. The company's philosophy in this pursuit is represented by the belief that an increased domestic consumption of U.S.

made products would boost the economy of the nation, by creating more demand, as well as better employment opportunities within the American economic sector. The measure is also expected to help improve the.