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The Wall Street Journal this morning has an interesting story comparing the way two major retailers – Wal-Mart and Starbucks – have cultivated their reputations.

“Wal-Mart, the world's largest public company, is also one of the world's biggest targets,” the WSJ writes. “It is being sued for discriminating against women and for forcing employees to work overtime. It has been accused of hastening the decline of U.S. manufacturing by buying products overseas, and blamed for ruining town centers by driving local companies out of business.

“Starbucks, by contrast, has won kudos for helping to revive neighborhoods and towns by creating traffic for surrounding businesses. The company also gets praise for treating its suppliers and employees well, practices it publicizes widely.”

The major difference, the Journal notes, is that Starbucks always has realized the importance of image and reputation, and that reputation “was a means to success, not a byproduct of it.”

At Wal-Mart, on the other hand, until recently critics were dismissed and criticism ignored – simply because the company thought its success would speak for itself.
KC's View:
It is critical to any discussion of this subject to realize that neither company’s reputation is in stone…that reputation and image are organic, living things.

Wal-Mart, for example, is clearly working to improve its image in the marketplace, with recent natural catastrophes providing a window into people’s good graces.

And Starbucks, has been reported, is being targeted for what some people say has been a willingness to “discourage” union activity.

We would observe that it will be easier for Starbucks to keep its good reputation that for Wal-Mart to change people’s perceptions…simply because that is the reality of image management.

But we also think that there is an authenticity to Starbucks’ reputation because it has been fostered since the company’s beginnings, and seems to be a high priority of current management. That’s an enormous advantage.