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    Small Vs. Large Businesses: Bargains

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    Almost all of us enjoy the "bargains" we find at the discount retailers like Wal-Mart and Target. There are operational and business efficiencies that smaller retailers can't duplicate.

    For instance, there was a bicycle shop on Main Street in a small town that had a lucrative trade until Wal-Mart came to town. The owner of the bike shop could not buy bicycles for a price lower than Wal-Mart was selling them for, so he went out of business.

    After several years, the Wal-Mart at that location was not making their "threshold profit" and decided to close. There is now an abandoned building with weeds growing up through the massive parking lot.
    Will the businesses come back to Main Street? Why or why not? (200 words)

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    Solution Preview

    Probably not. Once a business closes for reasons of economic disparity --- the inability to compete using a level playing field --- usually spells the death of that business. As a result, the entrepreneur will look at several options:

    -get a job working for someone to gain a degree of security
    -work toward another business model which is immune to this type of competition
    -move to another area which is more ...

    Solution Summary

    Competition is not always fair - there are instances where the large cause the small to fail. The question is: will the small retailer return if the large retailer also leaves the area. Will they return? Should they return? This essay attempts to answer these questions.