Walmart

Walmart built the most efficient distribution system in retail history, then discovered efficiency has limits. From 38 stores in 1970 to 4,616 US locations by 2024, the company exemplifies operational excellence taken to its biological ceiling. Under CEO David Glass, Walmart invested $30 billion building 190 distribution centers (1990-2006), applying Murray's Law to optimize facility placement. The result: average DC-to-store distance dropped from 400+ miles to 150 miles, enabling daily replenishment and 8-10× inventory turns versus competitors' 6-8×. This efficiency advantage bankrupted Kmart and forced Sears into terminal decline.

But efficiency can't solve every problem. Walmart hit US saturation around 2005-2010 when new stores began cannibalizing existing locations. CEO Doug McMillon recognized the real metabolic limit in 2015: Amazon was hiring 3,000 software engineers per quarter while Walmart hired 300. The constraint wasn't capital - it was capability absorption rate. Walmart's centralized control architecture that dominated physical retail became a liability in digital competition. The company's territorial defense strategy illustrated the mismatch: Walmart's rural 'fox strategy' (large, loosely defended 15-mile territories) collapsed in dense suburbs where Target's intensive small-territory defense dominated. Overlap zones saw margins fall from 24% to 16%.

Walmart's adaptation struggles reveal that biological strategies are context-dependent. The company's Germany expansion (1997-2006) lost $1 billion trying to import the US playbook - mandatory smiles, greeters, morning chants - into a culture and competitive environment that rejected every element. Its cloud computing venture failed because retail competitors refused to use Walmart's infrastructure. Twenty years of dominance couldn't overcome the lesson: what got you here won't get you there, and sometimes the moat that protected you becomes the wall that traps you.