Friday, January 06, 2006

Walmart and Snapper

In a couple of recent posts, I have talked about the dominance of large retail chains. (Tesco and 3G, Tesco and Walmart).

There is a fascinating story in the January 2006 issue of Fast Company (Issue 106, January 2006) about a company that decided to stop selling a high-quality product (lawnmowers that last a lifetime) through a pile-em-high-n-sell-em-cheap store. There is also a summary on Chandler Howell's blog.

Note that the story doesn't just have an economic angle (short-term loss against longer-term economic survival) but also an ethical angle (quality versus throw-away culture) and a social angle (loyalty and trust across network of independent dealers). Note also the system side-effects - sales through the independent dealers rose to compensate for the lost Walmart sales - which were influenced at least as much by social factors as by economic factors.

However, the reason this story is remarkable is that it represents an exception. Few manufacturers are able or willing to say No to Walmart (or Tesco or any of their competitors). The boot is usually on the other foot.

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