Thursday, August 7, 2008

Walmart -- A Visual Map
















I've posted an interesting link to a website that creates visual representations of data...It's called Flowing Data (www.flowingdata.com). One visualization was for Walmart, the link is below. The visualization shows the history of Walmart's stores, and plots a point for each place a store opened. From their roots in Arkansas, the Walton's built their business from the bottom up into the low cost provider of all things, mostly consumer staples, but recently into higher margin goods like electronics, etc.

It's a neat visualization, if nothing else. But the map and the history represent what any true entreprenuer sees in their dreams. Starbucks no doubt had the same visions, but recently came to understand that growing too fast can sometimes hurt too, since same store cannibalization can happen when you just grow for the sake of growing. Quality suffers, and the dilution of your brand ultimately occurs, since SBUX set out to sell the experience of Italian coffee shops, but has come to shift its focus on an ungodly product mix (food and trinkets) that customers no longer stay in the store to drink or experience. (A perfect example, they sell gift cards now as a result of the pressure they feel to grow same store sales over and above the trend...classic growth company problem.) Starbucks has also realized that the market can't always support a premium price when competition comes in to drive your returns to the cost of your capital.

It's an age old story, which again, is why innovation is the key to any long-term business success. If you can innovate beyond your competition, you win. It's another way of saying, "if you can stay one step ahead of your competition, you can beat your competition." Gretzky said it best, "Don't go where the puck is. Go where it will be."

Link to Walmart Map

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