3 ms·

Except that rule is often bullshit. There are many successful companies that have been built upon cheaper rather than better, eg Walmart.

defen 13y ago
Walmart did (does?) logistics and supplier negotiations better than anyone in the business. That is their advantage, not that their merchandise is sometimes low-quality.
- driverdan 13y ago
  Using that logic you could say that Demand Media did better SEO than everyone else until Google changed their algos.
  - defen 13y ago
    AFAIK Walmart's advantage in those areas could not be completely nullified by a single upstream provider's changes.
    - ddebernardy 13y ago
      China?
JacobJans 13y ago
Yes, of course there are successful companies that don't follow the rules. However, according to the study, the most successful companies DO follow the rules. Of course, success depends on how you define it. For example, if you invested $1 in Walmart stock five years ago, and $1 in Family Dollar, guess which investment would give you greater return? The company that doesn't compete on price. They win. By a lot. Isn't it odd that in the discount retail market, the company that doesn't compete on price gives investors a better return? Very odd indeed. Read the article, in goes into more detail addressing what you brought up.
derleth 13y ago
> There are many successful companies that have been built upon cheaper rather than better, eg Walmart. In addition to what everyone else said, Walmart owns a market other companies don't seem to want: Poor people. Both Costco and Target go after a much richer clientele, and KMart, which is otherwise very similar, is dying. Walmart is the go-to one-stop shopping experience for people working one or more minimum wage jobs. Related to this is the fact Walmart builds stores where other companies don't. As a result, Walmart owns some very rural markets nobody else is touching. Edited to add: My point: Given the above, for Walmart, 'cheaper' is a necessary element for success. They're chasing a market that straight-up can't afford 'better'.

defen 13y ago

Walmart did (does?) logistics and supplier negotiations better than anyone in the business. That is their advantage, not that their merchandise is sometimes low-quality.

driverdan 13y ago
Using that logic you could say that Demand Media did better SEO than everyone else until Google changed their algos.
- defen 13y ago
  AFAIK Walmart's advantage in those areas could not be completely nullified by a single upstream provider's changes.
  - ddebernardy 13y ago
    China?

JacobJans 13y ago

Yes, of course there are successful companies that don't follow the rules. However, according to the study, the most successful companies DO follow the rules. Of course, success depends on how you define it. For example, if you invested $1 in Walmart stock five years ago, and $1 in Family Dollar, guess which investment would give you greater return? The company that doesn't compete on price. They win. By a lot. Isn't it odd that in the discount retail market, the company that doesn't compete on price gives investors a better return? Very odd indeed. Read the article, in goes into more detail addressing what you brought up.

derleth 13y ago

> There are many successful companies that have been built upon cheaper rather than better, eg Walmart. In addition to what everyone else said, Walmart owns a market other companies don't seem to want: Poor people. Both Costco and Target go after a much richer clientele, and KMart, which is otherwise very similar, is dying. Walmart is the go-to one-stop shopping experience for people working one or more minimum wage jobs. Related to this is the fact Walmart builds stores where other companies don't. As a result, Walmart owns some very rural markets nobody else is touching. Edited to add: My point: Given the above, for Walmart, 'cheaper' is a necessary element for success. They're chasing a market that straight-up can't afford 'better'.