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To: Question_Assumptions
If I point a gun at you and say, "Your money or your life!", am I negotiating with you?

Now you're suggesting that Wal*Mart's vendors are being coerced at the economic equivalence of a gun point type scenario? Do tell me more.

145 posted on 01/17/2005 3:59:00 PM PST by LowCountryJoe (Many things in moderation, some with conservation, few in immoderation, all because of liberation!)
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To: LowCountryJoe
Now you're suggesting that Wal*Mart's vendors are being coerced at the economic equivalence of a gun point type scenario? Do tell me more.

In some cases, yes. Did you read the article at the top of the thread? Wal-Mart has the capacity to turn a small vendor into a national powerhouse but it also has the capacity to turn a national powerhouse into a small vendor or a dead one. I judge how much of a choice vendors have by what kinds of bad deals they are willing to accept to keep doing business with another business. If Microsoft tells IBM, for example, "Either you sign this agreement saying that you won't ever sue us for any patent infringements (noting that IBM has a huge patent portfolio) or we won't give you an OEM Windows license for your PCs," IBM is left with two choices. At least they were when Microsoft gave them this "choice" for Windows 95. Was it a real choice? Not really, because without Windows 95, IBM would have been out of the PC business. In other words, Microsoft had a gun pointed at IBM's PC business.

Similarly, when Wal-Mart tells Vlasic, "Either you keep selling us those gallon pickle or we'll find another vendor," after the $3 pickle jars have gutted Vlasic's traditional food store market, does Vlasic really have a choice? I'm not talking about vendors who mess themselves up. Of course that happens. I'm talking about vendors who have a choice between wrecking their own business one way or another or cutting the quality of their products simply because Wal-Mart is (A) disinterested in the health of their vendors (B) unwilling to really take the customer's costs into account, and (C) apparently disinterested in quality (Why should it be? The faster things wear out or break, the sooner you return to Wal-Mart to buy a new one.). Wal-Mart loses no sleep if a vendor like Vlasic or Huffy goes out of business or starts to produce goods of lower quality to keep up, but I'm not sure how that's supposed to help consumers over the long haul unless all you care about is price without any regard for quality or choice.

147 posted on 01/17/2005 4:11:37 PM PST by Question_Assumptions
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