Competitive Strategies and Government Policies Paper on Wal-Mart
ECO/365
University of Phoenix
Week 5, Learning Team Assignment
March 18, 2013

Management has recognized the effect of changes in the real-world competitive environment and government policies on other industries and anticipates similar events occurring in their industry, so they ask you for a report considering the following points. Write 1,400 – 1,750-word paper of no more than in which you describe how each of the following are or potentially will affect your industry or one with which you are familiar:

• New companies entering the market, mergers, and globalization, on pricing and the sustainability of profits: Identify the type of merger activity in your …show more content…

Wal-Mart claims by lowering their prices so low it does not destroy competition but promotes it by giving the consumers the lowest price possible and only helps the consumers who are not deniable. The taxes set by the government toward Wal-Mart can affect if they stay in a town for business or how they may price a certain item. The government use something called direct regulation to help with externalities, which is the amount of a good people may use is directly limited by the government (). If the government decided that an externality that Wal-Mart has is there are too many stores and causing many competitors to go under they could say to close 10% of their stores and Wal-Mart would have to comply. The government would have incentives policies, which would result in Wal-Mart having two options: having tax incentive policies and market incentive policies. In which one could be taxed on the multiple stores and keep them or adhere to what the government wants and receive a certificate stating the companies are in compliance. The government can and does make sure that companies are adhering by the rules and regulations set into place because ultimately they affect the consumer. When the government sees a negative externality, they will react to it and address it and it resolve in the best manner possible. Wal-Mart can lower their prices as low as they want but if the company violates any of the