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Q: How would you classify Wal-Mart in terms of position on the wheel of retailing versus that of an off-price retailer?
A: Wheel of Retailing theory says that retailers tend to emerge at the low end of the market, [ and win at the outset by offering customers low prices made possible by highly efficient operations – which Wal-Mart did in the 1970s through the 1990s in spades. But over time, these retailers become increasingly "fat" by letting their costs and margins increase. The new retailers' success leads them
to upgrade their facilities and offer more services, increasing their costs and forcing them to raise prices. Eventually the new retailers become like the conventional ones they replaced, and the cycle begins again when still newer types of retail forms evolve with lower costs and prices. ]
Expert answered|majasalv17|Points 0|
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Asked 6/5/2013 6:15:25 PM
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