McDonald’s, Starbucks, And Now Wal-Mart Takes Its Lumps

Feb. 23, 2011
Success in business is never a sure thing for anyone, no matter how strong their track record.
Wal-Mart Stores, one of the undisputed American business success stories, has taken some lumps of late. Which goes to show that success in business is never a sure thing for anyone, no matter how strong their track record.No one is saying Wal-Mart is going to be giving up its retail leadership position. But like other business success stories, the company has fallen victim to bad decisions and unfortunate circumstances.This week, Wal-Mart reported its seventh consecutive quarterly drop in same store sales in the U.S. Business analysts have examined the causes, noting pricing and merchandising issues. One problem most analysts agree on is the company got away from its historic every day low prices strategy and as a result, has lost sales to other discount retailers.Wal-Marts success was built on its ability to deliver exceptional value to consumers. The company pioneered the use of technology to reduce distribution costs. It took a partnership approach with its product suppliers to further improve its values to the consumer. I can remember when Sears and Kmart, as separate companies both larger than Wal-Mart, seemed helpless against the Bentonville, Ark. juggernaut.In the previous decade, McDonalds, another one of the countrys greatest business successes, went through a rough period when it engaged in the burger wars with its competitors. The company pulled out of this slump by calling a former CEO out of retirement, the late Jim Cantalupo, who revamped the menu to meet new consumer needs.Starbucks, another business superstar, has been forced to address competition from convenience retailers once it set higher standards for coffee expectations. The company has responded with a host of initiatives, including Via instant coffee, Seattles Best Coffee, a premium brand for the mass market, and other moves.All of these companies are run by smart people and have huge resources at their disposal, but their success is never guaranteed over the long run.All business organizations need to continually pay attention to changing market conditions and have a structure in place that allows them to respond.

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