Richard Gottlieb

Wal-Mart: Our Private Sector Government
February 6, 2008

Those of you familiar with my book, Ambassador to the Kingdom of Wal-Mart as well as the articles I have written for Playthings magazine on the same subject, are aware of my view that Wal-Mart operates on a never before seen scale.  It is so big, that if its revenue were converted to gross domestic product, it would be one of the biggest countries in the world.  Traditional approaches to working with a company of this size do not apply.

It was with this in mind that my eyes were drawn to an article entitled: “Wal-Mart: The New Washington.”  Written by Michael Barbaro and published in the February 3, 2008 New York Times, the article goes into some interesting detail on how Wal-Mart is operating like the government.  Wait! No! Not like the government; better than the government.

In other words, this entity (and it may be beyond being a business now), is not just the size of a country, it is acting like one.  Here are some excerpts from the article:

As the federal government debates how to wean the country from its addiction to oil, Wal-Mart just announced it would require suppliers to make major appliances that use 25 percent less energy within the next three years.
. . .

Take the case of electricity-sipping compact fluorescent light bulbs. Since Wal-Mart began heavily marketing them two years ago, it has sold 145 million bulbs, saving enough electricity, it says, to forestall the need for three coal-fired power plants in the United States.
. . .

Sounding like a politician, the chief executive of Wal-Mart, H. Lee Scott Jr., said in an address to employees two weeks ago, “We live in a time when people are losing confidence in the ability of government to solve problems.” But Wal-Mart, he said, “does not wait for someone else to solve problems.”

So what does this mean for us?  I think it means that Wal-Mart has, more than ever, the ability to affect, not just the market place, but the way people live their lives.  If Wal-Mart thinks something like fuel efficiency or thinking green is the way to go then that’s the way it’s going to go. 

Smart companies who supply and compete with them will do well to pay close attention to Wal-Mart’s decisions on what is to be deemed important in American life.  It is as close to a national mandate as a non-governmental agency can come.  What suppliers successfully produce and how retailers successfully compete, survive or thrive may well depend upon it.

Posted by Richard Gottlieb on February 6, 2008 | Comments (0)