David Rosenthal: uncertainty

Transcript context

…Yup, for sure. A big one is don't buy anyone else's inefficiency. If you're going to compete on price, you must avoid buying anyone else's inefficiency at all costs. It means having often very contentious relationships with your suppliers. P&G and Walmart were enemies for years, even though P&G had to sell in Walmart and Walmart had to be buying P&G products before they kind of figured out how can we both do this because we do both need to serve the same customer. That took a long time. That ruthlessness of being willing to not buy anyone else's inefficiency, even though it can create tension in the relationship. If you're a business that's winning on price, somebody will be doing that in your space, so you kind of have to if you want to win. Yup. I don't know that this is a playbook per se, but in an industry like retailing, Walmart's business, Amazon's business, and the like, price really, really, really matters. Selection and convenience matters too. That's why Amazon's a thing and the Whole Foods exists, specialty retailers, and all that. But price really, really, really matters. What you're saying is absolutely applicable in cases like that. When price really matters, your margins really matter. Your margin is my opportunity, exploiting inefficiencies, and being as efficient as possible is so important. But not all industries are like that. There's danger of over-rotating to that. Let's say you're in the media industry. That is a high margin industry. The software industry, that is a high margin industry. Not to say prices don't matter. Of course, they do. But there are other dimensions that matter more in those industries. You need to think about what industry you're in before you start applying this stuff. Yeah, that's a great point. The last one is an ill-formed thought, but I kind of want to just get it out there. It might be word vomit. Walmart, in so many ways, is a microcosm of America, or really at this point, of the world. There are so many customers. There are so many employees. They touch so many facets of life. They have such a large share of wallet for a lot of people that everything that can happen will happen. Labor problems, yes, for sure. Significant tensions there.…

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