Would Wal-Mart be as or more successful if it was headquartered in New York or LA instead of Bentonville, Arkansas?
Is there something about small town values and thinking that made this behemoth, or was it a fluke? Could other companies be more successful if they were to move to small town America?
Answers (12)
I believe that the essence of Walmart's success is Sam's attitude to money. It's based on the principles he learned from his parents, his childhood and his experience. If he lived in NY or LA, this experience would be different.
Other companies could be more successful if they move to a small town (depending on their business). There is less competition in small towns, doing business there is easier. Although, many companies need more demand to be successful, and only big cities can create it.
David P.
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Sam Walton didn't want to do things the same way everyone else did, so I think he was better off out of the big city environment. His customers are not city slickers, but normal people in ordinary places.
He also saved a boatload of income tax by avoiding those two tax-greedy jurisdictions.
Arun S.
Digital marketer and copy writer, helping companies connect with their audiences online and offline.
Wal-mart grew by opening stores near small towns, away from large metropolises like NYC and LA and under the radar of bigger competitors like Kmart. Being headquartered in a small town, it understood its customers well. Had it been based in New York, it would have had a hard time finding employees who could relate to the needs of people living in towns with populations of 5,000 or 10,000.
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The bottom line is the State sold out to the WalMart family. With cheap realestate, vast amounts of land to build distribution centers on and a large, fairly uneducated workforce where labor is cheap it comes down to what it always comes down to Rod. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$!
If WalMart were in LA, SF, or god forbid NYC then maybe it would not be the empire that it is today...
Clarification added March 24, 2010:
Hi Rod, Let me clarify the uneducated workforce thing. If I am a finance person with lets' say 10 years experience with a degree from a State College (hypothetical example here) If I work in NYC my salary is 80K a year. The same job at WalMart would probably pay 55-60K a year. If you have 2000 finance people on your team, do the math. Then there is Marketing and Operations people, where you can use the same formula. That is how they are so profitable.
I don't buy the whole quality of life small town bit.The vast majority of the population would like to, or already does live in the "big city"
Last point. Where are WalMart stores located? The vast majority are located in poor, or lower middle class areas.
I hear you can buy a Flat screen HD tv, without HD ofcourse for a really good price at one of there stores.:-0).
Savo D.
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No, because they would waste much more money and got distracted too many times.
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The HQ location does not matter as much as the company culture, so NO! Walls.
Charlene N.
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HI Rod ..... I think what you are grappling with is the culture of an organization. Walmart's forte was/is watching the pennies so the dollars take care of themselves. The fact that it started in a small town is part of its lore and charm but not in and of itself the reason for its success.
Any company can be more successful by adopting a similar, thriftier value system like WalMart's original founder. But simply re-locating to a small town (without the actions backing it up) is nothing more than a sham.
Rituparna B.
Assistant Manager, KPMG-Outsource Partners International (now part of EXL Service Holding)
Don't think so....in fact they had the small town advantage.
Less competition, dedicated customer base and building the brand that they are and eventually expanding to become who they are today.
Another one's KFC, look where they stared.
"Could other companies be more successful if they were to move to small town America? "...think that wouldn't work unless they originated out of small town.
Bill G.
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From what I know of Sam Walton and Wal-Mart, I think it would have bee less successful in NY or LA because (no particular order):
1. It would have gone against the core principles of frugality (NY and LA would have been WAY too expensive for Sam)
2. It was against his wifes wishes. Helen, Sam's wife, said "Sam, we've been married two years and we've moved sixteen times. Now, I'll go with you any place you want so long as you don't ask me to live in a big city. Ten thousand people is enough for me."
3. A smaller town also allowed Sam to creep up on the competition.
4. Being is smaller towns and away from big city distributors forced Wal-Mart to invest heavily in its own distribution (something they have been known for).
5. A smaller town allowed the vendors to move in close and setup shop to do business with Wal-Mart. Proximity allowed for closer relationships.
Stephen R.
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NO. WalMart would not exist if its HQ were in New York or LA.
WalMart emerged by pursuing a highly distinictive place strategy, taking the large metro department store concept to smalltown America. By aggregating the demand of several small proximate towns, which individually might support a 10,000 square foot general store, WalMart offered what the general stores had on offer plus much more at lower prices.
The initial business model could not have supported a big metro corporate overhread. The store concept could not have worked in big metros without substantial scale, which could not have been competitively viable until the business model was refined, systems developed, vendor relationships established...all of which were done in the initiial smaller scale stores. Then, over time, Walmart evolved to the point it could be not only a viable but a dominant compeptitor in major markets.
The second question answer is PLACE STRATEGY distinction. Ceretainly, in WalMart's case, the attributes of Bentonville, Arkansas informed the place strategy. You would make a grievous mistake to think any of this is tied to small town values or a fluke.
Third question answer is PLACE STRATEGY. If moving to small towns is the right place strategy for them, then prospectively other companies could be more successful. But small town location per se is NOT a viable stand alone strategy.
Those who want to know more about Place Strategy should consult my 275 Corporate Real Estate and Place Strategy Mistakes and How You Can Avoid Them, available from Amazon.
Edward Z.
Founder, Inno Inc
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It does not matter, they rely on their own satellites to link their stores
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Peter P.
Independent Marketing and Advertising Professional
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As long as the same brains were doing things - pretty much the same. Bring an idiot to a small town and all you have is a small town idiot, bring a bunch of smart guys and ... not hard.
