Much of the current dialogue concerning Wal-Mart's impact on the economy seems one dimensional:

the pro-Wal-Mart side wants to claim the retailer represents a business renaissance the likes of which
the world has not seen since the Industrial Revolution. The anti-Wal-Mart side desires to place at Wal-
Mart's feet every ill encountered by American society, the current-day woes of American manufacturers
in particular.

Both skim the surface of deeper questions, which Charles Fishman, in his book The Wal-Mart Effect,
manages to avoid. Instead of falling into these ideological traps, Fishman explores questions of
partnership and what it might mean for Wal-Mart to benefit one geo-political class or region while
negatively impacting another.

In a word, his analysis is holistic as opposed to brittle and shrill.

The last twelve months have yielded a host of new books and documentaries on Wal-Mart. Very few
manage to avoid portraying Wal-Mart in a stereotype that aligns with their respective ideology - little
nuance can be found on the topic of Wal-Mart.

The always present force of American political populism plays a particularly significant role in most
deconstruction of the impact Wal-Mart has on the economy and local communities.

As unemployment fluctuates and well-known American manufacturers close shop and move to lower-
cost manufacturing parts of the world, those left to cope in a new economy whose job potentials require
training they do not have or compensation that would negatively alter their lifestyle, Wal-Mart becomes
a convenient target for their accumulating wrath.

Enter Fishman and his superb The Wal-Mart Effect to counter this.

Gone are the vain platitudes about small-town America that Wal-Mart has decimated; but also gone is
the equally incestuous analysis of Wal-Mart's impact on business strategy, which states that Wal-Mart's
impact is only healthy - a logical extension of the invisible hand of the market made more efficient by
the logistics' technology of the computer age.

If there is a weakness to Fishman's book, it is his inability to directly access how large manufacturers
really view Wal-Mart. This is certainly not Fishman's error as few chief executive officers whose business
futures are inexorably tied to Wal-Mart remaining a customer would be willing to speak with the candor
Fishman's analysis demands.

Two of Fishman's primary CEO interviews are with the founder and president of Makin Bacon, Jonathan
Fleck, and Jim Wier, of Simplicity - the owners of Snapper lawn mowers. The Makin Bacon information is
interesting and is a way for Fishman to draw out the good within Wal-Mart: namely, that its retail
leadership position can capitalize a new business and pull an idea out of obscurity into the marketplace.
This is an important power, and if properly managed, could make Wal-Mart a force for innovation. But
Fishman is careful to place a bookend against the idea that Wal-Mart is a force for innovation in his
series of discussions with Wier.

Wier's company made the loaded decision not to do business with Wal-Mart because Snapper
understood their customers bought with a particular emphasis on product quality, customer service and
local service and repair, which doing business with Wal-Mart would not support. Wal-Mart's volume
would certainly have been meaningful to Snapper - as long as the primary metric used was sales'
revenue. If the evaluating metric was profitability, then the Wal-Mart proposal became decidedly
different from Snapper's perspective.

Wier knew that fluctuations in his raw material prices could make the Wal-Mart supply contracts drive
his product line to a break-even proposition. Perhaps most importantly, he knew that a move to do
business via Wal-Mart would circumnavigate Snapper's existing resellers, a critical part of his channel to
market that competitors could pounce on, and disquieted consumers once used to local support would
not appreciate.

Few companies have their own distribution channels as Snapper does; however, in his own thoughtful
way, Fishman is suggesting that if manufacturers want to preserve their margin, they must do something
that more closely positions their product, service or technology to the consumer. As long as Wal-Mart
does the work of the manufacturer for them, there is little the manufacturer can complain about.

Fishman's quietly made point is well said: do business with Wal-Mart if you will, but do not complain
about the position they consequently put you in. If you want another outcome, develop an alternative
business model.

By constructing his book through carefully chosen examples, Fishman is able to draw out what Wal-Mart
does well at the same time he points at the downside risk of doing business with them.

Fishman does not shy away from stressing the enormous efficiencies Wal-Mart has created for
consumers and manufacturers. Makin Bacon serves as a good example of how a small business, through
Wal-Mart's expansive distribution infrastructure and easy-to-use information systems, can create a
multi-million dollar business.

The segue Fishman manages to make on this topic is brilliant: these enormous efficiency gains in
distribution technology and the resulting lower cost to the consumer are actually making American
consumers more inefficient.

One example Fishman uses to illustrate his point is the ubiquitous American refrigerator item of
packaged pickles. Because Wal-Mart is so successful at distribution and has forced substantial price
concessions from pickle producers, the American consumer buys too many pickles. The pickles are
bought knowing full well they will never all be used, but since the price is so low, few people care.
The point is a subtle one, but bears wrestling with: can pressure on efficiency gains become inefficient if
it is not actually created by the market? This is a part of Fishman's overarching Wal-Mart effect - that the
company has become a force augmenting the market itself and, in many cases, doing to a particular
good what the market does not need done. In the case of pickles, the consumer did not want more
pickles, but Wal-Mart's underlying business model (everyday low prices) begets an unrelenting pressure
on every product sitting on every shelf. The unprecedented result is an artificial market force that over-
stimulates the pricing portion of the consumer's purchasing decision.

This unrelenting pressure on price appeases an obvious consumer need - low prices. But low prices are
in and of themselves only part of the delicate dance between the retailer and the consumer. While low
prices are important, consumers also want their shopping experience to be enjoyable. The unrelenting
and singular pressure on price upon which Wal-Mart has built its reputation and multi-billion dollar
business has an impact on the environment and culture of the stores, and the company itself.

Fishman manages to comment tactfully on the Wal-Mart offices in Bentonville, Arkansas, which are filled
with manufacturer samples of plastic lawn chairs instead of the prototypical American office furnishings.

Successfully managing to avoid being mean-spirited, Fishman is working to point out that the almost
evangelical zeal Wal-Mart has on price impacts more than just price - it diminishes the intangible joy of
being a partner with, an employee of and a customer within the Wal-Mart system.

Wal-Mart has little intangible allure to the consumer. It is a meat-market, an oil-change, which means it
does not capture the part of the American consumer where lasting loyalty resides. It is as if Fishman,
while writing this book, foresaw the changes Wal-Mart has recently been attempting to make in its
marketing. Deemphasized in this most recent advertising is the "Everyday Low Prices" slogan with the
swashbuckling smiley face (the smiling yellow button).

Now, well-crafted two-page print advertisements show on one side the commodity the consumer wants
at a low price, on the other side a well adorned kitchen, living room or dining room whose
accoutrements were unexpectedly found while shopping at Wal-Mart.

Will Wal-Mart make this transition? Fishman stops short of predictions, seeming to be comfortable that
his contribution to the public dialogue over Wal-Mart will be to draw out the deeper questions and
issues that are too easily glossed over by those using Wal-Mart for a vehicle to their own political
aspirations and ideologies.

The Wal-Mart effect is essential for those doing business with Wal-Mart, those seeking to understand
the role price plays to North American consumers and individuals who seek to understand how Wal-
Mart is impacting the global economy. Few readers will set this book down without profit.