One of the main fears that retail startups have is if they will be able to compete against Walmart, Home Depot, and the other big-box stores. This is a legitimate fear. Big-box stores continue to grow, particularly in terms of product line and geographic breadth. There are now big-box stores in towns with populations of 1,500 or less. All of us hear stories about big-box stores moving into small towns and driving local merchants out of business. So, it is not surprising that someone with an idea for a men’s clothing store or a pet store might wonder, “But will I really be able to compete against Walmart?” Couple this with the fear of competing with e-commerce sites and it is easy to see why someone might pass on a potentially attractive business idea. Still, many businesses do compete successfully against big-box stores. Their success, however, is not by chance. Although it is impossible to compete against Walmart and the others on price, price is not the only product attribute that customers value. Firms can choose to compete on an array of other dimensions, including product quality, customer service, product knowledge, ties to the local community, and so forth. The following is an analysis of how big-box stores compete, what their vulnerabilities are, and strategies for competing against them directly.....

Discussion Questions:

1. What does this feature teach us about the importance of “crafting a unique market position” when launching a retail entrepreneurial venture?

2. Spend some time looking at Track Shack’s website at www.trackshack.com. Make a list of the reasons that someone interested in running shoes might shop at this firm instead of Academy, even if consumers might pay more for the shoes at TrackShack than they would for comparable shoes at Academy.
3. Suggest a fourth strategy that small retailers can employ to compete against big-box stores.
4. Identify a locally owned business in the city or community in which you live. Describe how the business competes against big-box stores.