Strategy matters more than ever
When everyone is playing the same game, your execution is critical. Your store is like their store, your bread is like their bread, so we care very much about the care and skill you put into your product or service.
Of course, that still matters, but the revolution of the web means that the way you go to market, the structure of your offering, the model of your business–these are sufficient to cause you to lose, regardless of how you play the game. (And able to give you a huge post if you plan right).
Sam Walton was a huge success, largely because he developed a new retail strategy, not because he was better at running a store than anyone else. Local bookstores are in trouble, not because they don't work hard or care a lot, but because they are saddled with expenses that used to be smart (rent for a local storefront) in a world where they are merely ballast.
Running a business with the wrong strategy in the wrong place at the wrong time is possible, but it's an uphill battle. The alternative is to think very hard about your model, your costs and the benefits you offer to the people you'd like to serve.
You could change from a product to a service offering, from free to expensive, from low service to high service, from storefront to web, from large to small, from spam to permission, from acquiring new customers to delighting old ones, from wide open to invitiation only, from dirty to green, from secret to transparent, from troll to benefactor, from custom to mass, or for any of these, vice versa.
Not changing your strategy merely because you're used to the one you have now is a lousy strategy.