Wal-Mart and Lawn Mowers
Let’s talk lawn mowers and Wal-Mart and about Jim Weir, the Man Who Said No To Wal-Mart:
“[I]t was clear that Lowe’s was going to build their outdoor power-equipment business with the Cub Cadet brand, and how Home Depot was going to build theirs with John Deere,” says Wier. “Wal-Mart wanted to build their outdoor power-equipment business around the Snapper brand. Were we prepared to go large?”
Snapper customers wanted quality lawn mowers that were worth repairing. (There’s a credo we can get behind.) Wal-Mart was selling lawn mowers cheap enough that they could be considered disposable. So Jim Weir tells Wal-Mart:
“Now, at the price I’m selling to you today, I’m not making any money on it. And if we do what you want next year, I’ll lose money. I could do that and not go out of business. But we have this independent-dealer channel. And 80% of our business is over here with them. And I can’t put them at a competitive disadvantage. If I do that, I lose everything. So this just isn’t a compatible fit.”
The Wal-Mart vice president responded with strategy and argument. Snapper is the sort of high-quality nameplate, like Levi Strauss, that Wal-Mart hopes can ultimately make it more Target-like. He suggested that Snapper find a lower-cost contract manufacturer. He suggested producing a separate, lesser-quality line with the Snapper nameplate just for Wal-Mart. Just like Levi did.
You might find this an interesting article about Wal-Mart, its workings, and its relationships with suppliers.
