Frontiers of Entrepreneurship Research
1996 Edition


COMPETING AGAINST A RETAILING GIANT:
A LOOK AT HOW LOCAL MERCHANTS
RESPOND TO THE ARRIVAL OF WAL-MART

Jeffrey E. McGee, University of Texas at Arlington


Introduction

Theoretical Foundations

The Empirical Setting

Methodology

Results

Table 1: Factor Analysis of Competitive Methods Used by Small Retailers in Hostile Environments
Table 2: Cluster Profiles of Merchants in Hostile Environments
Table 3: Results of Analysis of Variance of Merchants in Hostile Environments
Table 4: Factor Analysis of Competitive Methods Used by Local Retailers in a Benign Environments
Table 5: Cluster Profiles of Merchants in Benign Environments
Table 6: Results of Analysis of Variance of Merchants in Benign Environments

Discussion

References


ABSTRACT

The entry of a mass merchandiser or large discounter into a rural market often creates a hostile environment for the existing retailers. This study examines the competitive behavior of small retailers following the arrival of a large discount chain store, Wal-Mart, into a rural market. The small retailers studied either perceived increased levels of environmental hostility as a result of Wal-Mart’s arrival or the retailers felt that the discount chain’s entry had no impact. The patterns of those competitive behaviors associated with superior performance are identified. The competitive behaviors were also contrasted within the environments which were perceived as either hostile or benign.

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Last Updated 4/5/97 by Cheryl Ann Lopez

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