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Monday, September 11, 2006
Are the trends of selling in low price/High volume good or bad for the economy?
Are the trend of selling at very low price good or bad for humanity and economy...share your thoughts..
2 comments:
Anonymous
said...
Normally, I probably wouldn’t argue over this, but in an effort to expand my horizon (learning other perspectives) and to further develop my ability to think critically I will take the plunge and kick things off.
I think that Big Box Stores such as Wal-Mart are both bad for humanity and the economy. This post focuses on the local economy that supports the local people.
For many, the appeal of a specific city or town is the downtown because of the quaint boutiques, the special restaurants, and other unique small businesses. In contrast, no one says, “lets go to city x because they have a big Wal-Mart.” Most Big Box stores have more capital and resources with which to compete and offer lower prices than small business owners. When Big Box stores set up in a town or city, consumers are drawn to purchasing products where prices are cheaper. And the so-called “choice” to buy local is not the same for everyone because not everyone has the purchasing power to pay higher prices for a product. As a result of Big Box stores, the downtown shops lose customers and eventually go out of business. Downtowns then become vacant buildings without any tourist appeal and without any economic prosperity.
The money generated by Big Box stores doesn’t stay in the community. Profits from Wal-Mart do not magically end up in the pockets of the local people. Corporations such as Wal-Mart commonly employ people for minimum wage on a part time basis in order to extract the most work from the employee at the lowest prices. Here, Wal-Mart benefit$ in terms of no high salaries to issue and no need for benefits of any kind. Moreover, what benefit does a community’s work force gain from so-called job creation if the worker does not gain any valuable skills from working in a Wal-Mart retail store that can be applied in the future?
What I’m trying to communicate here is that there is a power imbalance between Big Box stores (I’ve used Wal-Mart as an example here) and the local economy. Just because Big Box stores exist, doesn’t mean it works (well). One has to ask, who has power in the relationship between big corporations and the local businesses? And one has to remember that those in control act in the interest of maintaining if not increasing their control/profits.
Alright.. I will try to first analyze your points then suggest few new ones and describe the real Concern for the 2 business modules, one of them is the big stores modules. But first to your points briefly.
1- Town Appeal; Big stores don't appeal to people and that is true. But they are not meant for that anyways. Most tourist's appeal areas still thrive greatly and big stores usually are not interested in these areas. say for example Niagra Falls.
2- Money generated don't end up in the community. There is a truth to that but not because of the nature of this business module. It is because of their products (More on that later).
2.1- Employee fairness: Could be but I see here almost opposite scenarios, In fact a lot of people do like to work for big companies than smaller ones. Reason is because people are more likely to be ripped of in smaller stores. I know a small store that employs people for less than minimum wage (paying under the table with no benefit) and gets away with it. Big stores can't and are monitored much more than smaller stores.
I believe that there is always 2 modules that will always exist next to each other. First Module: Large Volume, Cheap Price and Second Module: Low Volume High price.
If a shop intended to be in the second modules tries to be marketed in the first module, it will fail and also vise versa.
The first module does offer a lot of benefit. For example, you live in an apartment building, this is example of the first module where people are sharing the high price of a land. Without buildings housing costs will be much higher and for the same location you would pay probably double to rent a house. Similarly other products are given to the consumer at bottom pricing from the factory. This s good too. Other examples are big computer companies. Dell for example started with a kid in college that saw the tragedy of the second business module (small volume high prices very common with IBM and Macintosh PCs at the time) and made a business based on the second module where he gathered the cheapest products and made little profits but eventually higher volumes. Dell made more competition in the market place and forced creative thinking.
But what is the catch or concern for the first module? It is mostly in the nature of the products sold. if the products are mostly produced from the same local area or country then it can't be but help to that area. However, the fact of global open economy coupled with the first module is disastrous in this respect because products are imported from cheap labour / less controlled countries thus allowing inhumane treatments and economically disastrous consequences for the community which imports. If a country such as Canada puts serious laws in place to encourage local products, then it can't be but good.
Now, My concern with the second module is a community that thrive on small shops where everything is expensive, under the table or illegal workers, less benefits and lots of tax frauds. Not only that but you will find small shops gathered in mafia like fashion to control a product's price, could be Milk or eggs or cloth or whatever..
Both modules have their benefits and concerns, I believe both need to exist but both being monitored seriously to have a better economy and community.
Are the trend of selling at very low price good or bad for humanity and economy...share your thoughts..
2 comments:
Normally, I probably wouldn’t argue over this, but in an effort to expand my horizon (learning other perspectives) and to further develop my ability to think critically I will take the plunge and kick things off.
I think that Big Box Stores such as Wal-Mart are both bad for humanity and the economy. This post focuses on the local economy that supports the local people.
For many, the appeal of a specific city or town is the downtown because of the quaint boutiques, the special restaurants, and other unique small businesses. In contrast, no one says, “lets go to city x because they have a big Wal-Mart.” Most Big Box stores have more capital and resources with which to compete and offer lower prices than small business owners. When Big Box stores set up in a town or city, consumers are drawn to purchasing products where prices are cheaper. And the so-called “choice” to buy local is not the same for everyone because not everyone has the purchasing power to pay higher prices for a product. As a result of Big Box stores, the downtown shops lose customers and eventually go out of business. Downtowns then become vacant buildings without any tourist appeal and without any economic prosperity.
The money generated by Big Box stores doesn’t stay in the community. Profits from Wal-Mart do not magically end up in the pockets of the local people. Corporations such as Wal-Mart commonly employ people for minimum wage on a part time basis in order to extract the most work from the employee at the lowest prices. Here, Wal-Mart benefit$ in terms of no high salaries to issue and no need for benefits of any kind. Moreover, what benefit does a community’s work force gain from so-called job creation if the worker does not gain any valuable skills from working in a Wal-Mart retail store that can be applied in the future?
What I’m trying to communicate here is that there is a power imbalance between Big Box stores (I’ve used Wal-Mart as an example here) and the local economy. Just because Big Box stores exist, doesn’t mean it works (well). One has to ask, who has power in the relationship between big corporations and the local businesses? And one has to remember that those in control act in the interest of maintaining if not increasing their control/profits.
Alright..
I will try to first analyze your points then suggest few new ones and describe the real Concern for the 2 business modules, one of them is the big stores modules.
But first to your points briefly.
1- Town Appeal; Big stores don't appeal to people and that is true. But they are not meant for that anyways. Most tourist's appeal areas still thrive greatly and big stores usually are not interested in these areas. say for example Niagra Falls.
2- Money generated don't end up in the community. There is a truth to that but not because of the nature of this business module. It is because of their products (More on that later).
2.1- Employee fairness: Could be but I see here almost opposite scenarios, In fact a lot of people do like to work for big companies than smaller ones. Reason is because people are more likely to be ripped of in smaller stores. I know a small store that employs people for less than minimum wage (paying under the table with no benefit) and gets away with it. Big stores can't and are monitored much more than smaller stores.
I believe that there is always 2 modules that will always exist next to each other. First Module: Large Volume, Cheap Price and Second Module: Low Volume High price.
If a shop intended to be in the second modules tries to be marketed in the first module, it will fail and also vise versa.
The first module does offer a lot of benefit. For example, you live in an apartment building, this is example of the first module where people are sharing the high price of a land. Without buildings housing costs will be much higher and for the same location you would pay probably double to rent a house. Similarly other products are given to the consumer at bottom pricing from the factory. This s good too. Other examples are big computer companies. Dell for example started with a kid in college that saw the tragedy of the second business module (small volume high prices very common with IBM and Macintosh PCs at the time) and made a business based on the second module where he gathered the cheapest products and made little profits but eventually higher volumes. Dell made more competition in the market place and forced creative thinking.
But what is the catch or concern for the first module? It is mostly in the nature of the products sold. if the products are mostly produced from the same local area or country then it can't be but help to that area. However, the fact of global open economy coupled with the first module is disastrous in this respect because products are imported from cheap labour / less controlled countries thus allowing inhumane treatments and economically disastrous consequences for the community which imports. If a country such as Canada puts serious laws in place to encourage local products, then it can't be but good.
Now, My concern with the second module is a community that thrive on small shops where everything is expensive, under the table or illegal workers, less benefits and lots of tax frauds. Not only that but you will find small shops gathered in mafia like fashion to control a product's price, could be Milk or eggs or cloth or whatever..
Both modules have their benefits and concerns, I believe both need to exist but both being monitored seriously to have a better economy and community.
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