The risk of complacency and becoming 'fat and lazy' after achieving success, as seen in competitors like Kmart.
The danger of misaligned incentives, exemplified by the Ben Franklin executives who rejected the Walmart concept to protect their existing high-margin business.
The initial vulnerability of being undercapitalized and operating in remote areas, which Walton turned into an advantage.
Opportunities Identified
Applying a proven business model (like discounting) to an underserved or overlooked market niche (small towns).
Rapidly copying and scaling successful concepts pioneered by competitors, as seen with Sam's Club.
Leveraging technology, like Walmart's early investment in a computer network, to create significant operational efficiencies.
Building a powerful competitive moat through an obsessive focus on cost leadership.