11/11/2004

Don't Fear Wal-Mart

Wal-mart isn’t “putting” other stores out of business. The businesses are putting themselves out of business. Wal-mart comes into town and the first thing these mom and pop shops and small chains start trying to do is beat Wal-mart at their own game. These shops start a price war that they are never going to win. These smaller companies are not going to beat Wal-mart on price. Wal-mart is cutting costs all the way back to raw materials, not just at the retail level. You don’t beat an enemy by continuously slaughtering your own troops against there most powerful strong hold. Like Achilles, even the great Wal-mart has weaknesses. If companies would capitalize on those weaknesses and stop battling with price they would have much better chances at survival and even possibly come off triumphant.

13 comments:

Rufio said...

I guess I don't quite follow your logic here. When Wal-mart comes into a town they have "always low prices, always." The mom and pop stores then have prices too high compared to Wal-mart. The only way for these mom and pop stores to increase there demand back to its position before Wal-mart came they must also lower prices. I really don't think they are trying to compete with them on purpose, but its a matter of survival. Maybe its the local consumers that are bringing down the mom and pop stores. If people would just support local businesses I think the mom and pop stores would be fine. So its a matter of consumers being influenced away from local businesses, and I don't think that is what Wal-mart intended.

peter_parker said...

Of course that is what Wal-Mart intended. Why else would they build a store? They build a store because they believe that they will attract business. Of course this business has to be lured away from other firms.
What incentive do people have in supporting local business and paying a higher price? True, local business have a competitive advantage in some things, especially customer service, but maybe it's not enough to survive. I don't think Wal-Mart or local business are to blame for certain firms exiting the market, its a natural phase of the business cycle. Someday Wal-Mart will be obsolete.

Jack Hahhnon said...

I agree 100% with you. I extremely think Wal-Mart is putting more of every other store's business in the corners because their prices are so low. I mean, Wal-Mart has the lowest prices in the country. so, why don't the other stores just lower their prices? They're trying so hard to sell their products and grocreys, that they don't bother to lower their prices! The owners of other stores are just stupid if they can't notice this! I agree 100 percent with every one of you who posted a comment on this. oh, and by the way, check out my blog! I've got some great sites! I'm located at jackhahhnon.blogspot.com.

John West said...

Mom and pop survival is not created by just simply
lowering prices. Everyone on this blog, besides the person posting, doesn't get that point. No mom and pop is goingto be able to match Wal-Mart's prices on the majority of items in a typical store. However; they can create niches and by doing so draw away customers that are tired of the lack of personalization at the big box stores.

Also, everyone is sure quick to point out that one day
Wal-Mart will be out of business. Tell me, where are you all looking at in gauging this doomsday conclusion? Please tell me that your'e not going to cite the failures of once powerful retailers such as Sears and Kmart. Wal-Mart does have it share of problems. Lawsuits are filed 6,000 times annually against them.

natty said...

Mom and Pop stores will not survive if they try to compete with Walmart's prices. Walmart's success lies in having the lowest prices, however, there are other areas in the market that are left wide open. For example, Walmart does not carry a wide selection of products. Example: I like a certain flavor of spaghetti sauce and Walmart doesn't carry it. Walmart's hardware department is pretty limited as well.

A savvy Mom and Pop store will find a core strategy that Walmart is not and this will be the area that they need to be the best in. They can be the place where people go when Walmart doesn't have what they need.

Bottom line: Walmart is not all powerful and businesses can still exist in their presence.

Bruce Banner said...

Having Wal-Mart in a small city does change cultural things of a city but I don't think Wal-mart intentions is to comes in and the first thing is to drive out mom and pop's stores. Just a side note, if you do not like Wal-Mart do not shop there and support your mom and pop stores. But if you are shopping there you should not complain about it.

Taber Wolrab said...

I agree, Wal-Mart doesn't put anyone out of business, it is all done by the company itself. Prices can not be matched, if they could mom and pop shop would be doing as well as Wal-Mart is. Smaller stores should just focus on doing what they do best and capitalize on that.

Julie said...

My boss subscribes to Fortune Small Business, a magazine for small businesses. Last month the cover story was how small businesses can compete against huge stores such as Wal-Mart, titled "Beat Goliath". Among the advice given was the suggestion to become distinctive in order to attract customers who see themselves as independent thinkers and who are tired of shopping in a big box. "Mom and pop" businesses need to give people reasons to shop in their stores as opposed to the "goliath" stores, and as others have commented, competeting with prices isn't always an option.

Bryce Larkin said...

This is a great article for people to read, especially for Cedar City, Utah. Businesses do run themselves out; they can not and should not compete with Wal-Mart on price. Find a niche that Wal-Mart can't serve.

Student 01 said...

Here is a quote I would like to start with. “The successful person is willing to do what the unsuccessful person is not willing to do.” Isn’t Wal-Mart a Ma n’ Pop store it’s self. That is the way it started, they were just willing to do that which no one else was willing to do. If other Ma n’ Pop stores want to compete they better start doing something to differentiate them selves from their competition. The problem is that most of these Ma n’ Pop stores aren’t willing to do what the successful Ma n’ Pop stores are doing. A lot of the stores here in Cedar City want to do the same thing they have always done, but the consumers want more. If the consumers didn’t want more then there would not be a Wal-Mart. Unless the Ma n’ Pop stores do something to give themselves more value then they can die for all I care (THE BUSINESS NOT THE PEOPLE, for those people who believe my views to be too radical).

Maudi said...

I agree Walmart is not the enemy they are just keeping the Mom and Pop stores honest. Mom and Pop stores need to understand the point that was being driven home in this article, and that is they'll never be able to compete with Walmart. The buying power issue along with the lines of distrubution are to much for these small stores to handle. However the whole reason why people go to Mom and Pop stores is for the service and the friendship. Small town stores can compete but only if they do what they are good at.

Dr. Tufte said...

I think there's some pretty good strategic thinking here. Wal-Mart has obe basic strategy. They are the best at cutting costs. You can either do them one better (unlikely) or offer customers something different that they can't get at Wal-Mart.

Anonymous said...

See http://harryjoiner.typepad.com/proven_ways/2004/09/retail_giant_re.html