Yesterday’s Wall Street Journal‘s feature piece was titled “Seeking Growth in Urban Areas, Wal*Mart Gets Cold Shoulder.” To continue to grow, the argument goes, the only thing left for Wal*Mart is urban areas. Except many of those urban areas don’t want ’em. E.g., Boston’s mayor said Wal*Mart’s not his kind of company. Mayor Menino is not alone. Is this the kiss of death for the Arkansas giant? Hardly! Nonetheless, couple it with bad publicity, pullouts from places like Germany, and a long-dead-in-the-water stock price … and things could be better. The same can obviously be said for recent times’ Utterly Invincible Duo: Microsoft & Dell. (And then there are the Big Pharma embarrassments. Oh, and Ford. And …)
The day’s mail also brought my 2 October Fortune. In an article titled “Bill Ford Finally Joined the Club” (the high growth Deposed CEO’s Club), there is a telling (“Telling?” Try: Amazing!) “little” chart. Standard & Poors rates companies as “Low risk,” “Average risk,” and “High risk”—based on “the ability to achieve long-term stable earnings growth.” In 1985, some 41% of big enterprises were “low risk;” and 35% were “high risk.” In 2006 the “low risk” group had dropped to just 13%. And the “high risk” gang weighed in at … 73%.
Not to be smug (sure, Tom), such facts support (1) my long-time skepticism of the “built to last” idea and (2) my Total Skepticism about any “business model” (I hate that term) considered and labeled, as so many are-have been, “the last word”—Dell & Wal*Mart have been accorded that status for the last few years.
(See the wee Special Presentation attached.)