Margins and Profitability for Wal-Mart
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Does low-cost strategy affect margins and profitability? How do firms manage margins? Are suppliers of Wal-Mart happy, since they are known as a low-cost leader?
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Solution Summary
The expert determines if low-cost strategy affects margins and profitability. How firms manage margins are determined. The expert examines if suppliers of Walmart are happy since they are known as a low-cost leader.
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Low cost strategy only affects margin, not necessarily profitability. Firms will low margin (i.e. low revenue per unit of sales) can sometimes sell at a high quantity (and thus achieve a higher profit). Such firms may include Costco, Walmart, any home renovation stores (Lowe's if you are from US, Rona if you are from ...
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