Summary
Wal-Mart hopes to reboot the retail market by turning its attention to selling tech-filled laptops, for the same price, as you would buy pint-sized-tech less laptops. Increasing the discount retailers campaign to this new market segment could start, and accelerate "price wars" dramatically lowering prices across the board. Wal-Mart is looking also to renovate PC displays in a third of their stores to make their PC/Laptop section more easily navigated by customers.
Analysis
Now, we at Computer Service World Inc., are taking a special interest in this article, to say the least. Ourselves, like many other online, and local electronic/computer retailers, in this downed, but recovering economy see lower prices, but possibly not lower costs a possible shot in the Corporate Arm.
However, a price war has possible positive effects for an economy that is now recovering, and retailers just staying a float, could see an influx of customers (and money), should the price be right. Also, another positive, Wal-Mart has a tendency to be able to price-better, or be closer priced to most other major players in the electronic market. Why is this important to the small fry, one might ask? I know I would. Well, it's simple, Wal-Mart's possible initiation of a price war, well, the small guy could in theory save money on a lot of expensive, or time-consuming research (price -- anyway) and keep prices at or better than Wal-Mart (if possible), and be competitive to many different retailers. Also, in the local markets (many of them through out the Central NY Area), people like Wal-Mart's prices, but with extra options (to buy from), would rather buy from a local company, again as long as the price was close.
Again, however, the possible negative effect for the smaller retailers still trying to hold on to diminishing customers, could try to compete, and lower prices, but would see their own profit margins shrink to non-existence. So, while the market would most likely benefit from a price war; the more intense competition with lower prices, would make the smaller company's possible competition in such a market, something that would see some being waned out of it.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
