Prizefighter strategy

In the early days of Walmart, the company was a much smaller contender to large rivals, such as Sears, Roebuck.

Walmart’s founder, Sam Walton executed a shrewd growth strategy in which he never went head to head against it’s much bigger rivals.

Instead he opened up stores in smaller towns and rural areas that were underserved as they were considered too scarcely populated by the big retail chains.

Walton’s Strategy

He played the chain store game harder and better than anyone else. Walton invented practically nothing. But he copied everything anybody else ever did that was smart—and he did it with more fanaticism and better employee manipulation. So he just blew right by them all.

He also had a very interesting competitive strategy in the early days. He was like a prizefighter who wanted a great record so he could be in the finals and make a big TV hit. So what did he do? He went out and fought 42 palookas. Right? And the result was knockout, knockout, knockout—42 times.

Walton, being as shrewd as he was, basically broke other small town merchants in the early days. With his more efficient system, he might not have been able to tackle some titan head-on at the time. But with his better system, he could destroy those small town merchants. And he went around doing it time after time after time. Then, as he got bigger, he started destroying the big boys.

Well, that was a very, very shrewd strategy.

Advertisements