Global Oil Simulation Paper

Global Oil Simulation: Wal-Mart Perspective

The oil industry greatly effects not only the United States’ economy, but the entire global economy. Many multi-national corporations are effected bythe cost, the availability, and various societies’ needs for oil (Unknown, 2007). Wal-Mart, for example is greatly effected by the recent increase in the cost of oil, which in turn effects the price ofgasoline.
Wal-Mart caters to lower-income consumers and provides them with everything they need to maintain their households all in one place at low prices. Wal-Marts are found all throughout theworld, in cities and in small, rural towns. This allows the multi-national corporation to receive business from consumers with varieties of income ranges. However, as a result of the recent increase ingasoline prices, profits for Wal-Mart are on the decline.
Higher gasoline prices cut into consumer spending. This means that because consumers are spending more money to fill up their tanks, theyhave less money to spend at stores such as Wal-Mart. The retailer has signaled that its second-quarter results might fall short of what was expected compared to its 8% increase during the first quarter(Bonddad, 2007).
There are many things to blame for this decline in share-value and consumer spending. Two reasons put out by Wal-Mart are inflation and higher gas prices (Bonddad, 2007).Inflation, such as increases in the price of staple foods, effects what consumers buy from Wal-Mart and what they instead go to dollar-stores and thrift stores to purchase. Gasoline prices have increased by40% since February and throughout these increases, Wal-Mart consumers have maintained the same income level with nothing to compensate for the inflation (Bonddad, 2007).


Higher gasoline pricesalso make it harder and more expensive to import and export goods. Aircrafts, trucks, and boats all require fuel to travel long distances around the world to make sure that Wal-Marts have enough...