Monday, March 2, 2009

Competing with the Big Box Retailers: Yes, it is possible

Today on the radio, I listened to a talk-radio host make the arguments that entrepreneurs are unable to compete with the big box stores such as Wal-Mart. This is nothing new -- as I hear this argument frequently. This always intrigues me -- as I see Wal-Mart as a positive.Walmart - Save Money. Live Better.

First, Wal-Mart (like any other big business) was started by an entrepreneur and we can learn a lot from Mr. Walton.

Second, Wal-Mart offers consumers convenience and lower prices through their economies of scale. Yes, this benefit also applies to all the people living in small town America where Wal-Mart is supposedly ousting all the existing small businesses. I know I appreciate this.

Third, Wal-Mart makes the market more efficient. Sure, many small businesses go under that are no longer able to offer any competitive advantage. But, the real entrepreneurs will simply respond to this change and find a new way to compete.

And, yes, it is easier than you think to compete with Wal-Mart. You just need to think strategically, and think either a low price OR a premium product niche! Here are some examples: -- They specialize in diapers and other baby products. They match the prices for diapers with the big box retailers and even offer free shipping on orders over $49. They are able to do this by focusing on a niche and not having to spend the big bucks on a retail outlet.

Whole Foods -- Although they offer grocery items just like the Super Wal-Mart, they are able to compete and bring in customers by focusing in on more organic and specialty items.

No comments: