First they take on a product line and become a big % of the company's sales, then they start tightening the screws and demanding price cuts. The manufacturer has to either give up a large fraction of their total sales or use cost-cutting measures like offshoring and materials substitution to reduce their cost so they can sell at the price Wal-Mart demands. Wal-Mart does this incrementally over time so the company has already started down the road by the time they realize what's being done.
This was a big part of the manufacturing offshoring movement of the last few decades. Of course one company isn't solely responsible for that trend, but Wal-Mart with their huge size was a significant part of it. This was before Amazon was a thing. Now the damage is done and everyone seems to be forgetting that Wal-Mart had a hand in it.