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Andy Grove on Big Companies vs. Startups

PortfolioI haven't been overly impressed with Conde Nast's Portfolio magazine but this article from the latest issue is a very worthwhile read.  It's written by Andy Grove and it talks about the opportunities Grove sees for large companies.  Everyone talks about how startups can be more nimble and focused, as outlined in Clayton Christensen's The Innovator's Dilemma, one of my all-time favorite books, btw.

Grove's article offers somewhat of an anti-Innovator's Dilemma point of view.  As Grove puts it, "In looking at various companies that have been hindered by their own success, we found that under certain conditions a firm can create a new growth spurt for itself by entering an entirely different industry."  He calls it "cross-boundary disruption" and uses Apple's decision to invade the music industry as Exhibit A.  OK, I buy that one, but his next example is Walmart and health care.  Huh? 

Sure, I've seen the mini-clinics they've set up in many of their stores but can Walmart really become a disrupter in the health care industry?  This seems like a major branding message issue to me.  It wasn't that long ago that Walmart's tagline was "Everyday Low Prices."  That's great when you're looking to buy motor oil or milk, and it might even work for a flu shot or a quick checkup, but is that really the message you're looking for at your doctor's office, the person who might be making life and death decisions for you?

In all fairness I see Walmart has changed their tagline to "Save Money. Live Better."  That's a subtle shift from "Everyday Low Prices" and it might help avoid the branding conflict I'm talking about.  Regardless, I wonder how many people will still equate Walmart with "low prices" no matter what tagline they use.  Then again, I suppose the old joke is still true: What do you call the person who ranks lowest in their med school class?  "Doctor."


Rebecca Burgess

No, you're not going to get your next check-up at Walmart. But then again you are probably not their target audience either. I'm not a big fan of Walmart, but I imagine they are providing a decent service for the under and uninsured Americans (and non-Americans) struggling to get basic health services for themselves and their children. I agree, Walmart will hardly be a disrupter in the health care industry, but I do see them filling a gap. Unlike free and discounted clinics, Walmarts are everywhere and easily accessible for the thousands of low-income patrons who might otherwise skip their next well-baby appointment.

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