The expansion of Walmart has often been regarded as a negative factor that adversely affects many communities, especially entrepreneurs working in these areas. This paper is aimed at discussing the effects that this organization produces on small businesses in Canada.
On the whole, it is possible to say that this competition poses difficulties for these firms, and very often, these firms go out of business. However, one should take into consideration this rivalry also forces businesses to improve their operations and this is one of the reasons why they retain their positions in the market.
First, it should be taken into account that this company has one of the most developed supply chains among many retailers, and it is important for this retailer because it helps them set lower prices for a wide range of products. It is possible to provide several examples illustrating the influence of Walmart. First of all, one can say that the products sold by this corporation are lower by approximately 30 percent.
Moreover, one should take into consideration that Walmart stores have a wider selection of goods, and this attribute appeals to many clients. Therefore, it is possible to say that many customers choose to purchase products from this retailer. As a rule, about 50 percent of small businesses in local areas are likely to be closed within a relatively short period. This is one of the trends that can be identified.
Apart from that, the suppliers of these firms choose to work with Walmart because this corporation can purchase a larger quantity of goods. So, these cases suggest that this corporation harms small businesses. This is one of the main points that should be kept in mind.
Nevertheless, one should not suppose that Walmart only harms other firms since such an assumption would be rather inaccurate. In some cases, the competition with this corporation leads to the improvement in the performance of small businesses. In particular, these firms have to improve many aspects of their operations in order to improve their cost-efficiency.
For example, they adopt new software solutions that can improve their supply chain. It should be taken into account that many small businesses have very obsolete inventory systems, and this is one of the reasons why they cannot compete effectively with such companies as Walmart. Therefore, these firms adopt more advanced information systems in order to remain in the market.
Furthermore, the presence of this corporation prompts many businesses to find new sources of competitive advantage in order to remain sustainable. This is why they focus on the improvement of their services. In this way, they can better retain clients and differentiate themselves among other firms.
This is one of reasons why firms remain competitive, even despite the impact of Walmart. In many cases, people choose to purchase goods at these stores because they have better services. This is one of the main arguments that can be made.
These examples indicate Walmart produces complex effects on many firms operating in Canada. It has to be admitted that the presence of such a competitor presents significant challenges to small businesses. Many of these businesses go bankrupt. Nevertheless, these firms are also prompted to improve their work in effort to retain clients. So, Walmart intensified competition in Canada.