businesses scared of technology
I was reading through the New York Times and saw a story about Wal Mart’s fear of Google. For NYT subscribers, here is the link: http://www.nytimes.com/2005/11/06/technology/06google.html. Basically, the article says that businesses including, but not limited to, WalMart are afraid that Google will actually take away business by informing consumers of more inexpensive or better quality alternatives in the area. We’ve talked a lot about how the internet and technology have helped businesses grow, but here is one example of how it could potentially harm them.
In theory, even the father of Libertarianism Fredrich von Hayek would disagree that business would be harmed by more market intelligence. Indeed the entire marketplace should become stronger if market intelligence and competition were stronger.
In this sense, Walmart should not fear informed consumers using Google at all, but welcome them. Afterall, Walmart’s strength has been their rapid responses to market conditions and their ability to keep prices low. They have been accused of selling below cost until they achieve local market advantage, but I believe they have prevailed in legal challenges to that claim (need to check).
Walmart has been accused of forcing suppliers to cut their costs. To this, Walmart says (with truth) that they pass savings on to the consumer thus reflecting the true market prices.
Fear no Google ;->
Comment by Administrator — November 7, 2005 @ 12:19 am