Wal-Mart redux: maybe softening?
Since my 3/28/06 posting Everybody hates Wal-Mart except those who shop and those who work there, two related items of interest have appeared in the print media.
One was an article in the 4/5/06 issue of the New York Times, entitled "Wal-Mart Offers Aid to Rivals." It commented that the company is " ...turning to an unusual business plan: helping its rivals." The article goes on to say that Wal-Mart will offer assistance to small businesses (it mentions hardware stores, dress shops, and bakeries) in urban areas where it has opened new stores. "(I)t would offer those businesses financial grants, training on how to survive with Wal-Mart in town and even free advertising within a Wal-Mart Store." This aid to these small businesses is further described as follows.
Wal-Mart will hold seminars to coach the businesses on how to compete with the giant discount stores–by, for example, intensifying customer service...At the same time, Wal-Mart will invest $500,000 in local chambers of commerce, to be used for small-business Web sites and business improvement seminars.
The company’s motivation for this unusual program is explained:
Wal-Mart acknowledged the program was not entirely altruistic. The company is trying to open 50 stores in urban neighborhoods in the next two years, and the aid to small businesses could help build support in cities like Los Angeles and New York where it has met strong resistance.
The other item is a review in the 4/3/06 issue of Barron’s of a new book The Bully of Bentonville, by Anthony Bianco, a writer at Business Week. The tone of the book (which I haven’t seen) is set out in the following reviewer’s commentary:
For much of the book, Bianco paints Wal-Mart as an unstoppable, soulless machine running roughshod over the countryside, municipal leaders and, most of all, its rank-and-file employees. He spends most of the book documenting the company’s overbearing attitude toward workers and its anti-union stance (the company says it is "pro associate," not anti-union).
But then, the author takes a different angle:
For the first time since its 1962 founding, he argues, Wal-Mart’s business model has "broken down and is in need not of repair but of replacement."...Competitors from Costco to Target to Whole Foods Market have managed to succeed in a Wal-Mart world. Some of Wal-Mart’s problems are due to the influence of its social and labor critics , but mostly it comes down to competitors offering different choices and a better shopping experience.
Wal-Mart acknowledges that its superficially magnanimous offer to help small businesses to compete with itself is not entirely altruistic. Would anyone have thought that it was "entirely altruistic?" The charge of the book’s author that the company is being beaten up on by other large companies who are now playing in its league may or may not be true (he offers no evidence to that effect), but it seems reasonable that such may be happening. Given these points, it appears that Wal-Mart is now learning to play defense, after all the years when it has had the ball.
One was an article in the 4/5/06 issue of the New York Times, entitled "Wal-Mart Offers Aid to Rivals." It commented that the company is " ...turning to an unusual business plan: helping its rivals." The article goes on to say that Wal-Mart will offer assistance to small businesses (it mentions hardware stores, dress shops, and bakeries) in urban areas where it has opened new stores. "(I)t would offer those businesses financial grants, training on how to survive with Wal-Mart in town and even free advertising within a Wal-Mart Store." This aid to these small businesses is further described as follows.
Wal-Mart will hold seminars to coach the businesses on how to compete with the giant discount stores–by, for example, intensifying customer service...At the same time, Wal-Mart will invest $500,000 in local chambers of commerce, to be used for small-business Web sites and business improvement seminars.
The company’s motivation for this unusual program is explained:
Wal-Mart acknowledged the program was not entirely altruistic. The company is trying to open 50 stores in urban neighborhoods in the next two years, and the aid to small businesses could help build support in cities like Los Angeles and New York where it has met strong resistance.
The other item is a review in the 4/3/06 issue of Barron’s of a new book The Bully of Bentonville, by Anthony Bianco, a writer at Business Week. The tone of the book (which I haven’t seen) is set out in the following reviewer’s commentary:
For much of the book, Bianco paints Wal-Mart as an unstoppable, soulless machine running roughshod over the countryside, municipal leaders and, most of all, its rank-and-file employees. He spends most of the book documenting the company’s overbearing attitude toward workers and its anti-union stance (the company says it is "pro associate," not anti-union).
But then, the author takes a different angle:
For the first time since its 1962 founding, he argues, Wal-Mart’s business model has "broken down and is in need not of repair but of replacement."...Competitors from Costco to Target to Whole Foods Market have managed to succeed in a Wal-Mart world. Some of Wal-Mart’s problems are due to the influence of its social and labor critics , but mostly it comes down to competitors offering different choices and a better shopping experience.
Wal-Mart acknowledges that its superficially magnanimous offer to help small businesses to compete with itself is not entirely altruistic. Would anyone have thought that it was "entirely altruistic?" The charge of the book’s author that the company is being beaten up on by other large companies who are now playing in its league may or may not be true (he offers no evidence to that effect), but it seems reasonable that such may be happening. Given these points, it appears that Wal-Mart is now learning to play defense, after all the years when it has had the ball.
posted by Mycroft Watson at 3:54 PM
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