Posts Tagged ‘economies of density’

Scattergun Target expansion

March 13, 2009

You may recall my discussion in January of the nifty Wal-Mart expansion graphic at Flowing Data.

Well, they’ve delivered another one. This time it’s fellow US big-box discount retailer Target under the microscope. Click on the pic below for the animated graphic thingie.

target-growth-path

The big insight from this new map is that Target did not adopt the oil-slick style growth we saw with Wal-Mart. The expansion here is much more opportunistic, as they jumped back and forth across the nation.

It took the firm considerable time for them to fill in a lot of gaps. It does raise questions about their scope to build sufficient economies of density.

Target is not an international retailer, so this is their entire growth story. For any Australians scratching their head, our Target is a rather ancient logo licensing arrangement (i.e there is no relationship between Wesfarmers and the US firm).

Let’s hope the next firm to get the Flowing Data treatment shows some international expansion.

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Spreading like Wildfire – Wal-Mart on the move

January 8, 2009

I stumbled across this very neat graphical representation of the growth of the world’s largest firm, Wal-Mart (Click on the picture below to see the video play through).

wal-mart-growth2

It is a wonderful illustration of the “oil stain”-style expansion that has been identified for other retail players such as Zara and Westfield.

The Zara approach is to open a flagship store in a city/state and then follow it up with saturation of the local market with smaller stores (and other brands from the Inditex stable like Bershka, Pull and Bear and Massimo Dutti). The firm argues that this allows them to build sufficient economies of scale in distribution, marketing etc.

For Westfield, it meant tackling the US as a series of much smaller markets and building their brand and market knowledge in each location.

Wal-Mart appear to have taken a similar approach to Westfield, but obviously on a much larger scale in the pursuit of what Thomas Holmes has called “economies of density“.

Again, it is a huge shame that the Wal-mart data is only presented for the US. It would be great to see their expansion into Canada, Mexico, Germany, Japan, the UK etc. Presumably this oversight springs from the data source.