Because many of them created their market space years ago and are now so established that it's difficult for a competitor to stage a worthwhile effort to draw revenue away from them. Because they have so much money available to them they can even afford to deal with a challenger by dropping their prices/rates lower than that competitor, operating at a loss for however long it would take for that competitor to die off, and then go back to business as usual(the "Walmart" strategy).
You refer to this as the "Walmart" strategy, but I don't think that's a standard interpretation of Walmart's strategy. From what I can tell, Walmart is more focussed on the long term, contracting with supplies in ways that allow them to keep prices low enough to prevent competitors from ever entering the market. Can you find any examples of Walmart actually following the strategy you suggest?
It's generally understood that "back in the day" (whenever that was) when Walmart was going through it's greatest period of expansion that Walmart would be able to enter an area and have a negative effect on existing businesses that didn't have it's advantages (massive corporate bankroll, improved supply chain, variety of offerings, etc). Eventually those business would atrophy, often closing. At this point, the local store had established itself and was able to behave in whatever manner it wanted (raise prices, lower wages, etc) because they had essentially become the only game in town.
At this point, as they are so entrenched, they probably behave in a very different way and have different needs.
Because many of them created their market space years ago and are now so established that it's difficult for a competitor to stage a worthwhile effort
I find this opinion (which is common on HN) hard to reconcile with the idea that established companies are "old and slow" and susceptible to "disruption" (also common on HN).
Like, no one can take out Apple's AppStore stronghold, but Tesla is going to bankrupt a century-old trillion dollar auto industry with a global supply chain infrastructure? Which one is it?
Aren't these different things, though? Auto companies aren't platforms for the small guys to sell their things.
Nobody is saying it's impossible to sell your product without going through one of the big platforms, just that it's expensive and difficult to market your product without doing so.
Also, I don't think it's ever as simple as established companies being "old and slow" so startups can "disrupt" them. Some companies are old and slow in certain dimensions, but at the top of the game in other dimensions.
Further, established companies have inertia, which can work for or against them.
I do agree with you, mostly with the point that every company/industry is different.
But I have to point out we do hear things on this site like, 'the auto industry is old and slow", and I think it's false. Some of the companies are, and some are quite progressive. Industries are rarely homogenous.
Because there are business where it is natural for customers to cluster. It is not natural for car customers to cluster since nothing stops you from purchasing from a different brand, there is little or no vendor lock-in.
On a social platform or online marketplace there is a natural tendency to cluster, customers do not want to maintain multiple social profiles or bookmark 10 "amazons".
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Why is that? Is it because they were providing a superior service? If they were providing an inferior service, how did they control the market?
Because many of them created their market space years ago and are now so established that it's difficult for a competitor to stage a worthwhile effort to draw revenue away from them. Because they have so much money available to them they can even afford to deal with a challenger by dropping their prices/rates lower than that competitor, operating at a loss for however long it would take for that competitor to die off, and then go back to business as usual(the "Walmart" strategy).
You refer to this as the "Walmart" strategy, but I don't think that's a standard interpretation of Walmart's strategy. From what I can tell, Walmart is more focussed on the long term, contracting with supplies in ways that allow them to keep prices low enough to prevent competitors from ever entering the market. Can you find any examples of Walmart actually following the strategy you suggest?
https://www.investopedia.com/terms/w/walmart-effect.asp
It's generally understood that "back in the day" (whenever that was) when Walmart was going through it's greatest period of expansion that Walmart would be able to enter an area and have a negative effect on existing businesses that didn't have it's advantages (massive corporate bankroll, improved supply chain, variety of offerings, etc). Eventually those business would atrophy, often closing. At this point, the local store had established itself and was able to behave in whatever manner it wanted (raise prices, lower wages, etc) because they had essentially become the only game in town.
At this point, as they are so entrenched, they probably behave in a very different way and have different needs.
I find this opinion (which is common on HN) hard to reconcile with the idea that established companies are "old and slow" and susceptible to "disruption" (also common on HN).
Like, no one can take out Apple's AppStore stronghold, but Tesla is going to bankrupt a century-old trillion dollar auto industry with a global supply chain infrastructure? Which one is it?
Aren't these different things, though? Auto companies aren't platforms for the small guys to sell their things.
Nobody is saying it's impossible to sell your product without going through one of the big platforms, just that it's expensive and difficult to market your product without doing so.
Also, I don't think it's ever as simple as established companies being "old and slow" so startups can "disrupt" them. Some companies are old and slow in certain dimensions, but at the top of the game in other dimensions.
Further, established companies have inertia, which can work for or against them.
I do agree with you, mostly with the point that every company/industry is different.
But I have to point out we do hear things on this site like, 'the auto industry is old and slow", and I think it's false. Some of the companies are, and some are quite progressive. Industries are rarely homogenous.
Because there are business where it is natural for customers to cluster. It is not natural for car customers to cluster since nothing stops you from purchasing from a different brand, there is little or no vendor lock-in.
On a social platform or online marketplace there is a natural tendency to cluster, customers do not want to maintain multiple social profiles or bookmark 10 "amazons".