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This thesis focuses on the impact of a mega-store on the existing businesses in a specific area--Magazine Street in New Orleans. The potential mega-store is a 200,000 square foot Wal-Mart Supercenter that is part of the retail component of the St. Thomas housing re-development. The focus of this project is the retail competition that might be generated by this mega-store. Businesses were studied and placed into categories as either direct or indirect competitors to the mega-store. Previous research identified certain categories of store types that could be impacted (either positively or negatively) by the location of national stores in their communities. These categories were used to determine the impact that Wal-Mart might have on businesses on Magazine Street. Business owners were surveyed to determine how they thought they would be impacted. In the opinions of the business owners, the overall impact that a Wal-Mart would have on Magazine Street businesses would be negative. The surveys do show, however, mixed attitudes among the Magazine Street business owners toward Wal-Mart's coming.

In this dissertation, we show how the firm can improve its revenue and competitiveness through segmenting the market by exploring consumer heterogeneity. In the first essay, we show that asymmetric assortment breadth among two competing retailers can emerge as an equilibrium when consumers differ in their prior knowledge about their product preferences and their shopping costs. Under this equilibrium, the full line retailer expands the market demand by attracting the uninformed consumers with large shopping costs and the single product retailer passes on the savings from a streamlined assortment to the informed consumers by setting a lower price. Therefore, the two retailers soften the competition between them and both achieve higher profits. In the second essay, we consider a setting in which consumers experience distinct instances of need for a durable product at random intervals and derive random amount of utility from each instance. Consumers are differentiated according to the frequency with which they experience instances of need. For a firm that provides a durable product to such a market, we consider the implications of selling versus renting on a per-usage basis. Selling minimizes transaction costs, but may result in inefficient utilization of units that are produced. Alternatively, per-usage rentals allow more utility to be generated per unit of product that is produced. Focusing on these trade-offs, we identify conditions under which the firm should sell, offer per-usage rentals, or offer a combination of the two. In the third essay, we continue to use the durable good framework to study how various forms of government subsidy programs shift consumer's demand patterns and thus generate different magnitude of additional savings in resource consumption. We give the conditions under which each type of cash rebate programs does the best in generating resource savings per dollar spent. / text