How might you attempt to compete with Wal-Mart if you were:
a) A small hardware store: Wal-Mart has the reputation for having the lowest prices. In fact, they try to be the jack of all trades, but sometimes the smaller mom and pop stores offer the personal service, something the larger department stores lack. The smaller hardware stores can offer more knowledge about the tools that they carry. Their typical brands that Wal-Mart stocks include Stanley and Black & Decker, Black & Decker being the consumer niche brand of DeWalt. The small hardware store can offer the products at a lower price for the short-term, but in the long-term they will not be able to keep up with Wal-Mart.
Wal-Mart uses market research to see who they need to cater to and stick with their customer's price frugality. The smaller hardware store can't compete with the basement bargain prices at Wal-Mart, but they can challenge their dominance by offering personal service, quality products, and most of all rely on word of mouth advertising. Wal-Mart suffers from poor public image and the small stores can use that to their advantage. In Figure 1 in the Appendix, it shows that the small stores are actually rising in numbers with the growth of Wal-Mart. This can be attributed to small stores catering to specific needs of the customers rather than practicing the jack of all trades, master of none.
b) a small men's clothing store: This will be similar to the small hardware store. The difference is that they must concentrate on a certain brand of clothing. For example, if a custom men's suit shop were to open up next door to a Wal-Mart, the shop will not be a direct competitor to Wal-Mart. They have differentiated themselves from the Wal-Mart by offering a more custom experience. ...