For Fred Meijer, the day of reckoning came in August 2003. He could no longer avoid making a choice. Wal-Mart stores had wandered into his life, first like a curious visitor and then like a vengeful rival. This Midwestern businessman could no longer ignore the resulting upheaval. With his work and life threatened, he had to ask himself, "How do I win in a world dominated by Wal-Mart?"

Meijer, who founded and built a chain of over 170 supercenters that bear his name, sought answers as he gathered 70 of his top executives in Grand Rapids, Michigan. He was hosting a three-day strategy session that I helped to choreograph as part of a strategy consulting team.Meijer reminded the executives that Wal-Mart had just opened its fourteenth supercenter in Meijer's home state. Several Meijer stores--combination grocery and discount superstores--had slipped from money makers to money losers under pressure from the goliath retailer. There was reason to believe that by 2008, Meijer would confront Wal-Mart head to head in most of its upper Midwest locations.

Meijer, the company's chairman emeritus, recounted an old story to set the tone for this critical meeting. "Two friends were being Next Page>>