Jerry Useem on Wal-Mart. He quotes someone who says, "Wal-Mart is the largest single revenue generator for Hollywood in the world." No wonder people focus on

"'What's the right closet product for Wal-Mart, what's the right stroller?' " Little wonder that Stockholm Syndrome--the phenomenon in which hostages come to identify with their captors--has been a problem for some companies. "At first there's resistance, then they break down, then they go to the other side," says Steve Cleere, a consultant at TradeMarketing. "They're thinking like Wal-Mart people instead of brand people, and they need to be rotated out."

But it's not all bad:

By systematically wresting "pricing power" from the manufacturer and handing it to the consumer, Wal-Mart has begun to generate an economy-wide Wal-Mart Effect. Economists now credit the company's Everyday Low Prices with contributing to Everyday Low Inflation, meaning that all Americans--even members of Whirl-Mart, a "ritual resistance" group that silently pushes empty carts through superstores--unknowingly benefit from the retailer's clout. A 2002 McKinsey study, moreover, found that more than one-eighth of U.S. productivity growth between 1995 and 1999 could be explained "by only two syllables: Wal-Mart." "You add it all up," says Warren Buffett, "and they have contributed to the financial well-being of the American public more than any institution I can think of."

Competitors and suppliers fear a "unipolar" world:

Wal-Mart in 2003 is, in short, a lot like America in 2003: a sole superpower with a down-home twang. As with Uncle Sam, everyone's position in the world will largely be defined in relation to Mr. Sam.

But still, Wal-Mart is the manufacturers' favorite retailer and their most profitable account. They work with their suppliers. All in the name of low prices. Now they're threatening to to kill the category killers, because of those fat margins. Is nothing sacred? Apparently not even Microsoft: Wal-Mart is now marketing a $200 bare bones computer on a Linux-based system. Jerry Useem also has an interview available online.