In this competitive corporate world price discrimination is common world. I read Chapter 9 in the book and its talk about different kinds of pricing and discrimination. In this blog I talk about price discrimination. Today Wal-Mart is the largest retailer in the world. Wal-Mart generated $240 billion in sales, which accounted for a little less than 2.5 percent of the U.S. gross domestic product in 2002 (Bureau of Economic Analysis, U.S. Department of Commerce Website, and Fortune, February 18, 2003).
According to this article Wal-Mart competitors blame, Wal-Mart doing unfair competition and not provide predatory pricing. The predatory pricing means company must be shown that the prices of its products below its costs. Wal-Mart can earn an additional profit and competitive advantage because these suppliers are charging relatively higher prices retailers for the same product. U.S. retailers, such as Kmart or Target, were to make the same allegation against Wal-Mart and its U.S. suppliers. Example, a laundry-detergent manufacturer is price-discriminating if it sells its 64-oz container to Wal-Mart for a unit price of $1.79 but sells it to Kmart for $1.92.
Here I think price difference is common issue in business world. By contrast, in this article we saw suppliers and Wal-Mart price discrimination. I think they can earn more profit at discrimination than uniform price. I think because of this price and cost policy Wal-Mart becomes more profitable compare of other businesses. I think U.S suppliers doing complete price discrimination with other buyers.
What you all think about this case? Are they doing price discrimination?
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