I spent a few days in Chicago last week, and there was lots of buzz about the acquisition of Sears, a company that opened its headquarters there more than 100 years ago and quickly rose to be the nation's top retailer. It was a title that its acquirer, Kmart, stole in the mid-'80s but relinquished to Wal-Mart a few years later.
On a local Chicago news station, I heard one market watcher comment, "Wal-Mart is probably dancing in the aisles today." His thought: When you take two lackluster companies and put them together, you create an even worse one, albeit a bigger one. It was a rather superficial comment, but there's plenty of evidence to support it. I don't know what Wal-Mart thinks about the deal, and it seems unlikely that anything can diminish its leadership position in retail, but I'd be willing to bet there's little celebration in its aisles.
Being in the No. 1 spot leaves little opportunity for celebration. Too much time needs to be spent on making sure you stay there--and move further ahead. Management consultants will be studying the deal in great detail for many years, I'm sure, and time will tell whether Kmart and Sears have a smart strategy and even smarter execution, whether their corporate cultures can mesh effectively, whether they will relentlessly pursue relevance and not just wring out inefficiencies, whether they will make smart investments in supply-chain and customer technologies, whether they cultivate great leaders, and more.
Author and management-strategy guru Gary Hamel has pointed out that there were times when no one could imagine Disney could be overshadowed, but look what Pixar has accomplished. Or that CNN's market share could slip, but look at what Fox has achieved. That's all good news for the underdogs, but, as Hamel says, "the real challenge is not to stay efficient but to stay relevant."
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