Marketing Managment

Title

Outsmarting Wal-Mart

Authors

Rigby , Darrell K .1 darrell .rigby bain .com

Haas , Dan2 daniel .haas bain .com

Source

Harvard Business Review Dec2004 , Vol . 82 Issue 12 , p22-26 , 2p , 1c

Document Type

Article

Subject Terms COMPETITION MARKET segmentation MARKET share MARKETING RETAIL trade SALES management STRATEGIC planning TARGET marketing COMPETITIVE advantage

WAL-Mart Stores Inc

NAICS /Industry Codes

453998 All Other Miscellaneous Store Retailers (except Tobacco Stores

Abstract

The article focuses on Wal-Mart and how it affects competitors in the retail trade . One CEO compares Wal-Mart

to a raging bear at a campsite and describes his strategy as just being able to survive by letting the beast overtake the closest rival . The idea is that companies have to exploit weak competitors and work around Wal-Mart to coexist with the retailer . There are companies that appear to be thriving despite competition from Wal-Mart . They include grocery stores , pharmacies , and discount stores where customers are looking for an alternative to the quality , service , selection , and price offered at Wal-Mart . Wal-Mart has been successful because the company built local market share , targeted particular segments of customers , and developed a pricing strategy that identified opportunities and vulnerabilities

Author Affiliations

1director , Bain Company 's Global Retail practice

2partner , Bain Company 's Retail practice

Full Text Word Count

603

ISSN

0017-8012

Accession Number

p Database

Business Source Premier

Publisher Logo Outsmarting Wal-Mart

Contents

HYPERLINK "http /web .ebscohost .com /bsi /detail ?vid 1 hid 8 sid a85ec326-337c-44c4- 8b6d-937c9b154fc9 40sessionmgr2 " \l "AN " \o "A survey of ideas , trends , people , and practices on the business horizon " A survey of ideas , trends , people , and practices on the business horizon

Section : forethought

RETAILING

HYPERLINK "http /web .ebscohost .com /bsi /detail ?vid 1 hid 8 sid a85ec326-337c-44c4- 8b6d-937c9b154fc9 40sessionmgr2 " \l "toc " \o "A survey of ideas , trends people , and practices on the business horizon " A survey of ideas trends , people , and practices on the business horizon

For a lot of retailers , the notion of competing against Wal-Mart seems daunting , if not futile . Yet a few are quietly and systematically doing just that . The CEO of one successful competitor described his strategy by citing an old saw "It 's like the two outdoorsmen who wake to find a raging bear at their campsite " he said "One camper slowly stands and backs away the other starts to lace up his sneakers 'You can 't outrun that bear ' whispers the first 'I don 't have to ' replies the second 'I just have to outrun you '

Rather than trying to outrun Wal-Mart , as it were , companies like this CEO 's are both exploiting the weaknesses of other Wal-Mart competitors and simply maneuvering around the bear . Consider HEB and Publix in grocery stores , Best Buy in consumer electronics , Walgreens in pharmacy products , PETsMART in pet supplies , and Target in discount stores . All are managing to coexist and even thrive in the same forest with Wal-Mart

The Wal-Mart threat shrinks into proper perspective when you segment the market along the lines of quality , service , convenience , selection , and price and...