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August 30, 2006
August 29, 2006
Circling the wagons or... for the kill?
If you seek a five forces analysis of Wal-Mart, please try this page.
Last week in a post entitled "Life Imitating (Wal-M)art" I intimated that Wal-Mart might soon begin a counter-offensive against a growing number of increasingly vocal critics. I had no first-hand or inside knowledge that such a response was forthcoming. It was just an educated guess, a prediction of sorts. Today, Michael Barbaro of the New York Times confirmed my hunch in an article entitled "Wal-Mart Counters Criticism With a Political-Style Ad Campaign." My take on the article is that while it accurately and fairly describes Wal-Mart's recent moves, it fundamentally misreads the underlying motivations for and potential consequences of them.
Wal-Mart, under attack now from unions and prominent Democrats, yesterday introduced a marketing campaign that closely resembles the television advertisements used by political candidates. ... For Wal-Mart, the ads represent a significant departure from its practice of rebutting critics in the media but presenting itself, at least in consumer television marketing, as untroubled by its image problems.
Strictly speaking, this seems more like a public relations, rather than a marketing, campaign. The latter term is more appropriately applicable when a firm is trying to persuade potential customers to buy its products or services and existing ones from shopping elsewhere. For example, Ford uses marketing campaigns to tout its cars, to persuade customers to buy its cars and not Chevrolet's or Toyota's.
Continue reading "Circling the wagons or... for the kill?" »
August 28, 2006
Nobody Does It Better
If you seek a five forces analysis of Wal-Mart, please try this page.
If you read only one article about why the Democratic Party's recent anti-Wal-Mart campaign is a bad idea, let that one article be Sebastian Mallaby's "Shopping for Support Down the Wrong Aisle" in today's Washington Post. It is one of those rare articles to which snippets are an injustice. When I say I wish I had written it myself, I give it the highest compliment possible.
File Under: Wal-Mart
links for 2006-08-28
August 25, 2006
Somewhere over the rainbow
If you seek a five forces analysis of Wal-Mart, please try this page.
It has become fashionable of late to paint the war between Wal-Mart and its critics in starkly antithetical terms. On one side is the undeniably successful behemoth of Bentonville with strong support from the financial community, denizens of and politicians from Red States, pro-family groups happy with Wal-Mart's refusal to vend seemy and obscene CDs, several notable economists and journalists who praise the firm for its creation of massive consumer surpluses, as well as other pro-business types.
On the other side are Big Labor, unsettled but undeterred by its attempts to unionize the firm's 1 million-plus employees; a small army of union-funded and highly-motivated, if not always on-target, anti-Wal-Mart organizations; Blue State senators and big city politicians looking for votes; the brie and brioche-eating, Whole Foods-loving, Saab-driving, I-look-down-my-nose-at-Wal-Mart-and-their-customers types; anti-sprawl activists; small business groups claiming economic damage from Wal-Mart's competitive moves; disgruntled former employees; inefficient suppliers unable and/or unwilling able to meet the firm's increasingly rigorous demands; a large swath of the mainstream media, the New York Times most notably; universal healthcare advocates; and a host of assorted cranks, malcontents, anti-capitalists, organ and axe-grinders.
And while there is more than an element of truth to this characterization, there is also something lost by doing so. The tendency to construe in black and white terms, irresistible and easy as it may be, makes us lose sight of the fact that there are not only shades of grey in this debate, there is an entire spectrum of opinion. In fact, as a recent article by The Morning News of Bentonville Arkansas makes clear, it's increasingly a rainbow spectrum:
August 24, 2006
links for 2006-08-24
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August 23, 2006
Life Imitating (Wal-M)art
If you seek a five forces analysis of Wal-Mart, please try this page.
Two days ago, in a post entitled "The Wal-Marti Code" I remarked on the strafing of Wal-Mart by several 2008 presidential hopefuls. I noted, in so many words, that life was imitating art. In particular, I observed that several senators among the hopefuls were behaving exactly as the fictional Senator Sedgwick Sexton, a character in a novel by Dan Brown entitled Deception Point. (Brown is also the author of the blockbuster The Da Vinci Code.) Though I didn't express it in exactly these words, I concluded that the senators' strategy concerning Wal-Mart is ill-advised, wrong-headed, and politically tone-deaf.
Today, to my utter and pleasant surprise, I found support for my point of view coming from a most unlikely quarter: The LA Times editorial page. In a piece entitled "Democrats' Shameful Wal-Mart Demonization" the Times concludes that "Presidential hopefuls only hurt themselves when pandering to unions by bashing the country's largest employer."
WITH ONE EYE ON 2008 and one on their labor union base, Democratic luminaries are canvassing Iowa and other states this summer to campaign against the nation's incumbent … retailer. They obviously see Wal-Mart as this season's Enron, the one corporation that represents all that is wrong with America.
But the editors don't just attack the politicians' strategy, they also take issue with its underlying assumptions and unstated motivations. And here they hit the bullseye like a laser-guided bomb:
The candidates are so intent on gaining tactical advantage in the primary season that they risk alienating possible supporters in the general election. ... The gusto with which even moderate Democrats are bashing Wal-Mart is bound to backfire. Not only does it take the party back to the pre-Clinton era, when Democrats were perceived as reflexively anti-business, it manages to make Democrats seem like out-of-touch elitists to the millions of Americans who work and shop at Wal-Mart.One reason the Democrats may have a tin ear on this subject is demographic. Certainly most of the party's urban liberal activists are far removed from the Wal-Mart phenomenon. The retailer has thrived mainly in small towns and exurbs, which is one reason a Zogby poll found that three-quarters of weekly Wal-Mart shoppers voted for President Bush in 2004, and why 8 out of 10 people who have never shopped at Wal-Mart voted for John Kerry. Denouncing the retailer may make sense if the goal is to woo primary activists, but it's a disastrous way to reach out to the general electorate. Or to govern, for that matter.
I don't know how this will all play out. It is possible that life will continue to imitate art. That is to say, much like their fictional "good friend" the hopefuls will do their funders' bidding up and until the strategy backfires. It's also possible that the target fires back, that The Empire Strikes Back.
File Under: Wal-Mart
links for 2006-08-23
August 22, 2006
Organs of the State II: Body of Evidence
The Gulf News recently reported on the plight of Huma Hussan and her husband, Kamran:
Kamran Hassan, 30, from Pakistan, moved to Dubai with his wife, Huma, 28, five months ago where she has been diagnosed with idiopathic pulmonary fibrosis. It is a disease where gradually the air sacs of the lungs are replaced by fibrotic tissue causing an irreversible loss of the tissue's ability to transfer oxygen into the bloodstream. "My wife needs a lung transplant but there are no live donors for lungs, you need a sudden death case and hope for matching lungs," said Hassan.
Like any devoted husband would, Kamran is doing everything within his power to aid his wife. Still, obstacles abound: He wants to take his wife
to China for a lung transplant operation (but) is unable to book flights because airlines are restricting the amount of oxygen he can bring on board that are vital for his wife's survival.
There is also is also the matter of money:
"A hospital near Shanghai, the Wuxi Chest Hospital is ready to admit her. They said they could do the transplant in two months but we have no money for the operation and no airline will take us," said Hassan.
I have tremendous sympathy for Kamran. When I was his age I, too, was the primary caregiver for a terminally ill spouse. My heart goes out to him...and yet a part of me hopes that the two never make it to China and get that transplant. My mind says it can't be justified because of the growing body of evidence indicating that something is horribly awry in the way Chinese transplant doctors go about their work.
Continue reading "Organs of the State II: Body of Evidence" »
links for 2006-08-22
The Wal-Marti Code
If you seek a five forces analysis of Wal-Mart, please try this page.
Well my summer vacation and blogging hiatus are over. During my absence I did something I can’t recall ever having done: I read four novels. It’s not that I don’t like reading. I just prefer history, biographies, and philosophy. Three of the novels I read were linked by a common theme: all were written by top-selling author Dan Brown. They were, in order of reading, The Da Vinci Code, Angels & Demons, and Deception Point. On the whole I found the novels to be everything their descriptions promised- fast-paced, action-packed, intriguing, highly-readable, and well-researched.
The plots revolve around smart and powerful people with strongly held opinions on and substantial knowledge about some of life’s most important and fundamental questions. The novels make reference to historical artifacts and places, theories, technologies, institutions, policies, and philosophies that guide and influence the lives of billions of people on the planet. And they contain details that are clearly the product of significant background research.
All of that having been said, there was one detail in Deception Point which gave me pause. It was the author’s characterization of Wal-Mart as a depredatory quasi-monopolist rather than a savvy supplier of consumer demand. I wondered whether the characterization was researched, whether Brown made it up, or whether he was interjecting his own opinion. It is a minor point, taking up just one page of the 736 pages, yet worthy of attention.
August 14, 2006
links for 2006-08-14
August 13, 2006
Carnival of Wal-Mart III
If you seek a five forces analysis of Wal-Mart, please try this page.
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Tom Slee of Whimsley Blog reports on the good, the bad and a bit of the ugly that he sees behind Wal-Mart’s “Always Low Price” strategy. Tom began his blog to help explain and promote his book entitled “No one Makes you shop at Wal-Mart.” It’s a book that I think I will find much with which I agree and disagree. And if the book is even half as good as the blog posts about Wal-Mart, I expect it to be one good and informing read. Money quote: The good thing about Wal-Mart stores is well-known, simple, and can be stated in three of the company's own words: Always Low Prices. The bad things about Wal-Mart are what it does to get those prices low. These are now also well known: cut costs remorselessly and exploit the benefits of scale. Few would argue with the claim that a low price is, by itself, a good thing." I know one who might ;-)
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Hadashi feels "somewhat snarkily pleased that despite all its corporate might and yellow-bouncy-smiley-face power, Wally is admitting defeat and pulling out with over $1 billion in losses." Upon reflection, she also reflects on those feelings and recognizes in herself some of the same cultural arrogance that she imputes to Wal-Mart. Who have thought that contemplation on the trials and tribulations of the world’s largest retailer could lead to a moment of self-realization? On a totally unrelated note, the banner pic on Hadashi’s blog is outstanding and worth a visit for that reason alone.
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It’s been said that there are only two certainties in life- death and taxes. Not everyone agrees. The late soul singer Marvin Gaye had a hit record in the 1970's entitled "Trouble Man." He said "There's only three things That's for sure- Taxes, death and trouble.” Jeff Hess over a Writing on the Wal doesn’t believe the old adage either. His post concerns the efforts by 18 of the nation’s richest families to avoid paying estate taxes. Among the “cabal of the uber wealthy” is the Walton family, the source of whose wealth is Wal-Mart. Here’s Jeff’s explanation on why we should care about Wal-Mart’s attempt to reduce the number of life’s inevitabilities to one: So why single out Wal Mart and the Walton family in any of this? Am I simply a Wal Mart-hating Marxist envious of their success? No. This is important because it is further evidence that Wal Mart and the Walton family are no longer simply acting as bad corporate citizens in our Republic. Instead they are acting as an independent, un-elected body setting national tax policy and creating legislation. Not since the days of John D. Rockefeller and Standard Oil has one family wielded this much power. And it’s not good for the Republic that I love. To me it sounds like the Waltons are exercising their first amendent rights to petition the government concerning grievances and that is exercising his frist amendent right to speak out against it- two things which are good for the Republic we both love.
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John of MarathonPundit takes issue with Chicago's recent "living wage" ordinance. To his mind, the result will be that retail purchases will continue to be transferred to the web and the suburbs and that the city, already severely under-stored, will remain that way. Liberal activists, columnists, and bloggers are claiming Wal-Mart and Target are bluffing when the retail behemoths state they'll cut back or cancel their expansion moves into the Second City. My hunch is they're not. Look for Wal-Mart to create a "big box" necklace along the borders of America's third most-populous city if the "big box" ordinance stands.
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Professor Bainbridge posted on the demise of Maryland’s Wal-Mart Healthcare law. That law required that “any company with more than 10,000 employees must spend at least 8 percent of their payroll on health benefits or put the money directly into the state's health program for the poor.” As the Professor notes, though Wal-Mart was not named specifically in the bill, “no other employer was large enough to satisfy the text set out in the statute.” Interestingly, the law was not invalidated on these grounds. The Professor explains.
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Jack Yoest notes how low anti-Wal-Mart protesters were willing to sink last Christmas. According to the article Washington Times article he cites: “[U]nion-sponsored protesters handed out empty, gift-wrapped boxes to children and made them cry...the arrests of...the protesters may have been ...a ...strategy designed by Big Labor-backed WakeUpWalMart.com.” Perhaps Jack should have named this one "How Low can YOU go?" or "Always (be)Low the Belt."
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Smilerz has concerns with the larger implications of cities, states, and municipalities attempting to pass laws that punish Wal-Mart for its success. “If a policy is good it should affect everyone equally (isn’t that what the Equal Protection clause was supposed to accomplish?) whether its loopholes to avoid restrictive regulation or, as in this case, regulation that can only be applied to a single party.”
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MP Turner of Curiouser and Curiouser asks “What is going on at Wal-Mart?” He wonders about the wisdom and effect of their new shoplifting policy, one that strikes him as a tad too permissive. Money quote: So, from what I can gather, this is purely a financial and political move. As the manager said, it costs him money to process a low-dollar theft and he loses the difference. And local governments are after all squawking about the extra load on its meager police forces. The only problem with that is that Sam Walton would have none of it. Somehow I feel inclined to agree. But then again, sometimes founders have trouble keeping up with the times.
August 9, 2006
links for 2006-08-09
August 7, 2006
Carnival of the Capitalists
Welcome to the Carnival of the Capitalists at The Business of America is Business. The gang at CotC came up short-handed this week and I volunteered to lend them one. IMHO, this is one of the premier carnivals in the blogosphere. As such, I consider it a privilege to host. For a little information about yours truly, try the "About" page. If you want to know more about what I've been written on this blog, try the "Archives" page. And for information on my academic work, follow the link to the "Social Science Research Network." Finally, if you regularly or even irregularly post about Wal-Mart, please consider submitting anything you have to the Carnival of Wal-Mart that I recently started. But please don't do any of that until you've had a chance to read the posts I have chosen for inclusion in this week's carnival. And now...in no particular order...on with the show.
Neal Phenes at Et Tu Bloge presents Chicago Attacks Walmart-Ends Up Like Hezbollah. This is a well-written and thoughtful post about how those claiming to look out for "the little guy" can actually do him more harm that good. Here's the money quote: "The first-order economic analysis of minimum wage laws shows that they reduce employment by raising the price of labor; the Law of Demand teaches that an increase in the price of a good reduces the quantity of it that is demanded. So the result of the meddling is fewer jobs, higher retail prices and less competition. Happens all the time. But the proposal's supporters and the politicians get to feel real good about themselves. And that is what really counts."
Mark of "Sportsbiz" has a must-read post on "The Best Deal in Sports History." Summary: "When the ABA merged with the ABA back in 1976 a unanimous vote was required and you won't believe the deal that was struck by one of the owners of a team not included in the merger." The post gives a whole new meaning to "you get what you negotiate." As Dick Vitale would say "Awesome, baby!"
Josh Giersch of "Josh Reviews Everything" has a post that got me thinking it may be time to crack open that piggy bank. He notes that "After recent spikes in the prices of copper and nickel, some coins are worth nearly as much for their metal content as their face value." If that's the case, I've got a small fortune in small change.
David Maister presents Stop Chasing The Prom Queen and the Star Quarterback posted at David Maister's Passion, People and Principles. He notes: It's been my experience that everybody makes the mistake of thinking that THEIR project is so important to the client enterprise that it must be the client CEO who not only makes the buying decision, but wants to meet all the possible providers (i.e. them.)
Barry Welford of StayGo Links- A Public Diary On The Way To A Patent wonders about whether Microsoft is promoting competition that may ultimately result in its transformation.
Pawel Brodzinski of "Managee" gets the award for best foreign blog post! Though he's writing from Poland, his post about "What attributes a CEO of software-related company should have" ought to be applicable anywhere on the planet.
The ever-interesting Eveyln Rodriguez of CrossRoads Dispatches recently visited the BlogHer conference. It obviously inpsired her because she wins this weeks award for mosting intriguing post title "Women Have Shopping Blogs, Men Have Cool-Hunting Blogs and Other Venus-Mars Petite-Grand Tales."
Yours truly has a post wondering why glam-rocker David Bowie should be getting credited for a theory about on-line music that I (arguably) came up with first! The title is "The College of Rock and The Bowie Theory"
Rob of Businesspundit reviews research "showing that mood does indeed affect work performance." I'll be using this post and related link in my Organizational Behavior course this fall.
Steve of Bizinformer weighs in on the healthcare debate with a post entitled "Small business Healthcare is Sick." His conclusion: "Employees and owners in large numbers are taking risks with their health and their families health. In many cases ultimately putting the burden for coverage on government programs and healthcare providers who are willing to serve them."
Bob Vineyard of InsureBlog has healtchare in his mind too. He asks "Would the health insurance system really be improved if plans were national, instead of by state?" The title of the post is "Got a Few Problems With This..." so my guess is that you can guess his answer.
Matt Inglot asks Is It Wrong to be an Employee? posted at Matt Inglot. My answer is: "I sure hope not." Read his thoughtful post to learn why he raises this provocative question and how he answers it.
Jim Logan presents Small Business Branding or Putting The Cart Before The Horse posted at Jim Logan. His advice is sage: I don’t want to start a religious war over branding. But if you’re broke and you’re worrying about your brand…you’re focused on the wrong thing. Branding and immediate revenue have nothing in common and shouldn’t share the same conversation.
Michael Wade of Execupundit gives some techniques for obtaining candid opinions from your associates.Think of the post as a thoughtful reply to this question: "When the boss asks for opinions at a staff meeting, just how much truth is safe?"
Leon Gettler of the SOX First blog (that's Sarbanes-Oxley, not Boston Red SOX or Chicago White SOX) asks an important question: Why is it so hard to encourage whistleblowers?. His answer: Maybe it's because fear appears to be a feature of modern working life, according to researchers. There are many forces at work that keep the code of silence and collusion in place.
Wayne of Blog Business World posts installment of the "Conversations with Experts" series. This weeks expert is Kare Anderson of "Say it Better." The topic is "How to Build Your Business On and Off-line."
I always appreciate when a blog post answers an important and succinct question. In a post entitled "Online Property Investment Tools" Nubricks does just that. The question is this: "So you’ve bought your new home / investment property and want to sell it on. How do you find out what price is the optimum sale price?"
Keeping with the real estate theme for a momentFat Pitch Financials covers the recent spin-off of Realogy by Cendant Corp. Realogy "contains all the real estate service businesses that were contained in Cendant. These businesses include the leading real estate franchises- Century 21, Coldwell Banker, ERA, Sotheby’s, and The Corcoran Group." Thanks for bringing this to my attention!
2008 Presidential contenders take note! Brian Gongol of Gongol.com and CotC host extraordinaire says that Iowa's economic destiny is at risk. His conclusion: "Iowa and other rural states are at especially high risk of trouble as the Federal government continues to fritter away America's solvency."
Dave Lorenzo from the Career Intensity Blog explains what it means for salespeople to go "Above and Beyond the Call of Duty.
I also highly appreciate it when biz bloggers give no-nonsense advice appropriate to those who don't have fat wallets. Jeffrey Strain at Personal Finance Advice presents Jobs That Cost Nothing To Start http://www.pfadvice.com/2006/08/03/jobs-that-cost-nothing-to-start/trackback. His summary: While there is a tendency for people to believe that it costs a lot to start a business, there are a lot of opportunities to do so for little to no cost.
That said, there's nothing wrong with providing tips and sharing insights that will help companies with big budgets. Kevin Hillstrom over at "Mine that Data" has a post that doe sjust that. His summary: Many companies face challenges when trying to optimize marketing spend. A simple formula can greatly aid the process of optimizing marketing spend.
Nina Smith at Queercents presents The Art of the Restaurant Upsell The questions she poses is this: "Do you think that a server in a restaurant should disclose the price (without customer prompting) when he/she pushes a high priced item?" I'll give you my answer: Yes! Read the post to see what her's is.
Jack Yoest notes that Senate majority leader Bill Frist possesses at least one formidable private sector skills- he knows how to sell.
Alexander Kjerulf has a wonderful post entitled Top 5 business maxims that need to go posted at The Chief Happiness Officer. I think this post is going to make it into one of my syllabae this fall.
Jeannie Bauer at Bouncing Back explains how How A Bad Boss Improves Your Career. After reading this post I realized I owe a few people a thank you card...or two.
I don't know Adrian Savage of "The Coyote Within" blog but I suspect he has nothing against the two words "if" and "only"- at least not in the abstract. But he raises a very good point about the organizational problems that can arise when the two words are placed in the same sentence.
Ask Uncle Bill doesn't think much of certain pre-employment personality tests being administered by HR departments. I wonder if he'd prefer France's heavy reliance upon handwriting samples as a selection mechanism?
Big Picture Guy over at "Big Picture, Small Office" says that "A true professional knows his ability isn't real unless he's actually on the field demonstrating it." Read the post to see how "Bill, a project engineer, is given the tough job of rebuilding a plant after a fire. Challenged by the everyday things, Bill is able to focus on this daunting assignment and use his considerable talents and unbounded energies to beat the odds."
Steve Faber presents Soros Screws the UAW posted at Debt Free. My question: what's not to like about George Soros?
Jim Logan presents How To Use Guarantees To Close More Sales Opportunities - Part 1 posted at Jim Logan. The post recommends a new way of looking at guarantees- seeing from the customer's perspective: The power of a guarantee is directly related to the risk you appear to be taking, not the risk you take away from a prospective customer. Guarantees aren’t about directly limiting the risk of the prospect. Guarantees are about raising the prospect’s confidence in you.
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