Final answer:
Corporations with high sales volumes such as Walmart typically have low gross profit percentages due to their cost structure aimed at offering low prices. They are efficient and predictable, focusing on scalability and mass distribution, contrasted by higher-profit margins of high-end retailers. The 'Wal-Martization' effect illustrates the broader economic impact of such business models.
Step-by-step explanation:
Corporations with high sales volume, such as Walmart, usually have low gross profit percentages. This is frequently the case because they operate on a cost structure that allows them to offer lower prices to consumers, thereby driving higher sales volumes.
The retail giant's model is built on efficiency, predictability, calculability, and control, with their success attributed in large part to being able to undercut competitors’ prices.
However, this often comes at the cost of lower gross margins compared to high-end retailers, who may have lower sales volumes but charge premium prices for their products, leading to higher gross profit percentages.
In terms of impact on the local economy, while large retail chains like Walmart can employ significant numbers of people, their wages are often low and profits are not usually kept within the local economy, a phenomenon sometimes referred to as the Wal-Martization of the economy.
Firms, both large like Amazon and small like corner delis, determine their sales strategies based on their own production models, cost structures, and target markets, balancing what to sell with output and pricing considerations to achieve their financial goals.