Train Tracks and Race Cars

An overwhelming force enters the marketplace.

A train is coming. You wish it wasn’t.

1. Will you stand on the track with your back to the train and deny its existence?

This business owner is saying, “Their customer is not our customer. They will not affect us.”

He is doomed by his delusion.

2. Will you denounce the train to everyone who will listen?

This second business owner says to state and local government, “We don’t want them here.”

He may win a battle or two, but he will always lose the war.

3. Will you face the train with one foot on each rail and say, “Bring it on”? 

This third business owner is saying, “I’m better at this than you are. I’ll make you regret coming to my town.”

I’ve occasionally seen this business owner defeat the giant, but only if the giant was sick, distracted, or not in the mood to fight. Usually the little guy loses.

There are two proven ways to defeat a giant:

1.Go where the giant cannot.

Trains run on rails. The rails dictate where the trains go.

Sam Walton was a small-town retail hustler in a hillbilly state. The giants who occupied the promised land were Sears, Kress (K-Mart), and J.C. Penney.

Big department stores need big populations. As a general store, Sam could operate profitably in towns too small for Sears, Kress, and J.C. Penney. Sam opened his first stores outside of Arkansas in Sikeston, Missouri and Claremore, Oklahoma; towns of about 10,000 people.

Sam Walton grew Walmart to $8 billion – a size equal to Coca-Cola at the time – before he opened a store in a town large enough to have more than one McDonald’s.

2. Let the giant show you the way.

Stand alongside the track and grab hold of the train as it passes. This is a strategy that businesses owners 1, 2, and 3 never considered.

Once aboard, stand between the train cars where you don’t have to fight the wind. Let the train cut a hole in the wind for you. You are riding in the slipstream. Haven’t you seen race cars pull up tight behind the leader and ride along in their slipstream until the time was right to slip to the inside and slingshot past them?

Walmart was slow, but they did act in time. They studied Amazon and saw what was working. Then they committed to upgrading their online shopping experience.

They allowed the giant to show them the way.

Wal-Mart wasn’t able to slingshot past Amazon,* but they were able to retain their status as a giant. They did not become a has-been like Sears, Kress, J.C. Penney, or Blockbuster Video.

Is there a train headed your way?

What is its name?

What is your plan?

Roy H. Williams

*Although Walmart currently does more total volume than Amazon, their online volume is only one-sixth as big. Additionally, Amazon’s market cap of $1.7 trillion makes that company worth 5 times as much as Walmart.