Overlooked Markets?

I see Wal-Mart is back in the news. The mega retailer is repeating a tough price-cutting strategy that worked for them in 2003 and was partly responsible for the demise of the toy store FAO Schwartz. This time around, Wal-Mart have laid down another challenge to their competitors in the toy market - most notably Toys R Us and Target - by significantly lowering prices on over 100 popular toys.

It’s worth remembering that Wal-Mart wasn’t always big enough to bully its competitors. Indeed, the retail chain’s humble beginnings - in the early 1960s - were focused on serving small towns rather than big cities. At a time when the prevailing wisdom was "big cities equals big profits", Wal-Mart’s founder - Sam Walton - flexed his Perspective Power and saw value in setting up shop in small towns. His counterintuitive approach initiated Wal-Mart’s growth into the largest company on earth, currently worth over $280 billion.

Walton’s visionary approach has a parallel in today’s marketplace. As companies look to emerging markets overseas, are they overlooking opportunities within the inner cities? Companies tend to view this demographic as low-income and overlook the fact that high population density offsets reduced spending power.

Bottom line: Seeing the inner cities from a different point of view might reveal novel opportunities for outstanding success.