IS WAL-MART AN OLIGOPOLY OR A MONOPOLY?
Wal-Mart is the largest American company in terms of sales, and is estimated to be the largest company in the world based on sales. It employs more than 1.4 million individuals. Its operations are based primarily in the United States, although it has recently begun to expand to other countries, including Japan. The company has begun to face public criticism for its labor practices as well as the pressure that it puts on suppliers, but the company is also credited with helping to keep the inflation rate low in the United States, no small feat for a single company. This research considers whether Wal-Mart operates as a monopoly or as part of an oligopoly, and the consequences for the larger economy of Wal-Mart's behavior.
A complete monopoly exists when there is a single producer with a unique product that has no close substitutes (Samuelson, 1995). This gives the seller considerable influence over the price that can be charged for the good or service. The monopoly most likely engages in institutional public relations advertising since it is not necessary to advertise the product or service itself. Another key feature of monopolistic competition is that there must be significant barriers to entry; perhaps large capital investment would be required for new companies to enter the market. Without these barriers, the monopoly would face considerable competition from other companies seeking to take advantage of the demand in the market.
Oligopolies are characterized by few sellers (but more than one) who sell either goods that are not differentiated from one another or that have only slight differentiation (Samuelson, 1995). Oligopolists have some control over the price that they are able to charge for their goods and services, but less control than a monopoly. Oligopolies must be careful in their pricing strategies to avoi
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