This book focuses on Sam Walton and his world “ Wal-Mart.” Mr. Walton was a man who never dwell on his disappointments. He always had an idea of what he wanted and followed through with it. Sam Walton was a man who took chances, never said never, and kept on fighting the odds. Sam Walton was a leader not a follower.
General Strategy and Values
Mr. Walton had many secrets to creating a retailing empire. One of these secrets was what he called the “ secret of successful retailing.” The secret of successful retailing is to give your customer what they want. Once this has been accomplished the customer will more than likely come back. This is how you create a successful relationship. One very important ingredient of Wal-Mart success was the treatment of his people working inside his stores. If you make sure you the company is taking care of the people working in the stores. Then the effect will be that your people will take care of the customers. This in effect increases the customer’s satisfaction and your employees as well. One more important formula Walton used for his success was the way he “roll it out.” “Roll it out” refers to the way Walton planned his saturation strategy into the market. Walton was one who would go where no one else would even think to go. He moved into small towns with else than 5,000 people and set up a store. He implemented this by building stores so that the distribution centers, or warehouses could take care of them, but they so could be controlled. This saturation strategy saved a fortune in Marketing and Advertising costs.
Sam’s Initial Years
Sam Walton grew up during the depression and knew that hard work and thrift were a way of life. Sam Walton was born on March 29, 1918 to Thomas Gibson and Nancy Lee Walton near Kingfisher, Oklahoma. As Sam Walton grew up he was always an ambitious boy. Don't think this is all Sam did though, he also had to help support his family, along with his father and brother because money was lacking due to the depression. Sam's job was to milk the family cow, bottle the milk, and then deliver the surplus of to customers and then went off to deliver newspapers afterwards. When he graduated from high school he was voted the "Most Versatile Boy" in his class. During this time it would have been easy for Sam to just give up on school and go to work full time. At the University of Missouri Sam majored in Economics. He could not really afford to attend school so he worked extra hard to get the money. Sam waited tables in exchange for meals, lifeguarded at the school pool, and also delivered newspapers. When Sam Walton graduated in 1940 he was voted the permanent President of his class. While waiting, Sam took a job in a Du Pont munitions plant near Tulsa, Oklahoma. While working and living near Tulsa, Sam met his future wife Helen Robson. She lived in a little town called Claremore where she attended Claremore High School and graduated valedictorian of her class and went on to attend college at the University of Oklahoma at Norman and graduated with a degree in business. Soon after they were married, Sam went to serve in the US Army intelligence corps in the continental United States, supervising security at aircraft plants and prisoner of war camps. By the time Sam was discharged from the war he was ranked as captain and decided he wanted to own his own department store. Sam borrowed $20,000.00 from his father-in-law and had $5,000 saved from the military.
How WALMART Came Into Existence
Sam's store was a franchisee of the Butler Brothers, who consisted of two chains. One chain was the Federated department stores, which were small department stores and then the Ben Franklin variety stores. Sam store was going to a variety store and with the assistance of the Butler Brothers, his store led in sales and profits in the six-state region. Since his store was such a success everyone wanted a piece of the action. Sam sold the store and made a profit over $50,000.00. In 1950 though, he purchased a store in Bentonville, Arkansas, which ended up being called Walton's 5 & 10, this store was also a member of the Butler Brothers' Ben Franklin chain. Before this store opened it needed many improvements but to Sam that was no problem. To introduce his store to the new town in July 1950, Walton staged his first sales promotion , called the "remodeling sale" and then the following March he had the grand opening. During this time Sam operated both stores the one in Newport and the one in Bentonville. Most people would not have time to do anything else but Sam did, he decided to start a second store in Fayetteville, located about 20 mile south of Bentonville. Walton knew though he needed a qualified manager to run the store so it would be as successful as his other store. Even with this new manager Sam did not neglect the new store. To keep his stores running in tip top shape Sam was always trying to find new ideas to improve business. As time passed Sam opened more stores with the help of his brother, father-in-law and brother-in-law. In 1954 he opened a store with his brother in Ruskin Heights, a suburb near Kansas City in a shopping center. This store was quite profitable, too. Sam opened larger stores which were called Walton's Family Center. More than 600,000 Americans work at Wal-Mart. Wal-Mart goes according to what Sam Walton believed, "Each Wal-Mart store should reflect the values of its customers and support the vision they hold for their community"
Distribution and Technology
Wal-Marts distribution was a very important strategic point for growth. With Walton’s distribution systems gave him one of his greatest competitive advantages. Distribution was very important to Walton because of his saving and flexibility of controlling distribution. With his private fleet of trucks and distributions centers set up everywhere. Walton set costs to run less than 3 percent to ship goods to his stores. With his competitors shipping costs between 4.5 to 5 percent for the same goods. With these savings meant even lower prices for the consumers. Technology at first for Walton had a great uncertainty, but eventually he gave in and went with it. With new technology helped him move way out front of the industry in both communication and distribution. Walton was always still convinced that technology are just tools and people in the system are primary responsible for the customers.
Thinking Small at Wal-Mart
l Think One Store at a Time
l Communicate, Communicate, Communicate
l Keep your Ears to the Ground
l Push Responsibility--- and Authority—Down
l Force Ideas to Bubble Up
l Stay Lean, Fight Bureaucracy
Sam’s Rules for Building a Business
RULE 1 – COMMIT to your business. Believe in it more than anyone else. If you love your work you will always be there everyday trying to do the best you possibly can, and pretty soon everyone around will catch the passion from you – like a fever.
RULE 2 – SHARE your profits with all of your associates, and treat them as partners. In turn they will treat you as a partner, and together you all will perform beyond your wildest expectations. Remain a corporation if you like, but behave as a servant leader in a partnership. Encourage your associates to hold a stake in the company. Offer discounts stock, and grant them stock for their retirement.
RULE 3 – MOTIVATE your partners. Money and ownership aren’t enough. Constantly, from day to day, think of new and more interesting ways to motivate and challenge your partners. Set high goals, encourage competition, and then keep scores. Make bets with outrageous payoffs. If things get stale cross-pollinate; have managers switch jobs with one another to stay challenged. Keep everyone guessing what your next trick is going to be. Don’t become too predictable.
RULE 4 – COMMUNICATE everything you possibly can to your partners. The more they know the more they will understand. The more they understand the more they will care. Once they care there is no way of stopping them. If you don’t trust your associates to know what’s going on, they will know you don’t really consider them as partners. Information is power, and the gain you get from empowering your associates more than offsets the risk of informing your competitors.
RULE 5 – APPRECIATE everything your associates do for the business. A paycheck and a stock will buy one kind of loyalty. But all of us like to be told how much somebody appreciates what we do for him or her. We like to hear it often, and especially when we have done something we are really proud of. Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They are absolutely free and worth a fortune.
RULE 6 – CELEBRATE your success and find humor in your failures. Don’t take yourself so seriously. Loosen up, and everybody around you will loosen up. Have fun. Show enthusiasm—always.
RULE 7 – LISTEN to everyone in your company. And figure out ways to get them talking. The folks on the front lines—the ones who actually talk to the customers are the only ones that really know what’s going out there. You better find out what they know. This is really what total quality is all about. To push responsibility down in your organization and to force ideas to bubble up within it, you must listen to what your associates are trying to tell you.
RULE 8 – EXCEED your customers’ expectations. If you do they will come back over and over again. Give them what they want – and a little more. Let them know that you appreciate them. Make good on all your mistakes, and don’t make excuses – apologize. Stand behind everything you do.
RULE 9 – CONTROL your expense better than your competition. This is where you always find the competitive advantage. You can make a lot of different mistakes and still recover if you run an efficient operation.
RULE 10 – SWIM upstream. Got he other way. Ignore the conventional wisdom. If every one is going one way, there is a good chance that you can find your niche by going in exactly the opposite direction. But be prepared for lot of folks to wave you down and tell you you’re headed the wrong way.
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