samwalton

Made in America:Sam Walton 1

SAM WALTON

Introduction

• Samuel Moore Walton (March 29,1918-April 6,1992)

• Founder of Wal-Mart

• Declared “richest man in America” in October 1985 by Forbes.

• Born in 1918 in Kingfisher, Oklahoma during the Great Depression.


• Sam always set extremely high personal goals.

• Played football, baseball and basketball and became youngest Eagle Scout in the history of Missouri at that time.

• Graduated from University of Missouri in 1940 with a business degree.

• Since high school he paid for all his expenses

To Value a Dollar


First Job

• Sam joined JC Penney, a retailing company, as a management trainee.

• There watching store manager he got excited about retailing.

• But due to war he had to resign the job and move in 1942.

• He married Helen in 1943 while still on commission.


Starting on a Dime

• Sam learned much about money and finances from Helen’s father.

• He purchased a store in Newport, Arkansas, a Ben Franklin franchise.

• He learned a lot from running a store in franchise program.


Wal-Mart’s philosophy

• In his store, he would buy an item for 80 cents, priced it to sell at $1.00 and sell three times more of it than by pricing it at $1.20. The overall profit was much greater. By cutting the price, it boosted the sales to a point where it earned far more at the cheaper retail price than it would had by selling the item at the higher price.


Bouncing Back

• Due to lease contract,he has to sell his store and move.

• It led him to bigger and better things

• Sam moved with his family to Bentonville, Arkansas to open self-service Five & Dime store which at that time was a new concept.


Bouncing Back

• He expanded very rapidly and opened many variety stores.

• But, a new concept of discount store came into existence and Sam immediately sensed that discount idea was the future


First Wal-Mart

• He built a store in Rogers, Arkansas.

• Nobody wanted to gamble on it so Sam has to put up 95 percent.

• Sam always checked on competition and always went around with his yellow pad to note down any new idea.

• He always used to promote a items very innovatively.


Recruiting the team

• All along ,history of Wal-Mart has been marked by having right people in right job at right time.

• Whitaker- To get it started

• Ferold Arend- To get it organised

• Jack Shewmaker- To push new ideas

• David Glass- To keep cool in crisis and get control


Taking the Company Public

• Due to rapid expansion, Sam accrued a huge debt.

• To get relief, he went public.

• Over the years, even though many has written them off, Wal-Mart stock did very well


Building the Partnership

• Sam attributes Wal-Mart’s unbelievable prosperity to the relationship managers enjoy with its associates, employees in the store.

• They have a profit sharing plan for all the associates.

• Information is also shared with associates to give them a sense of partnership.


Making Customer Number One

• Sam always believed in secret of successful retailing is to give customers what they want.

• Strong customer demand in small towns made it possible for Wal-Mart to get started.


Meeting the Competition

• Sam believes that one of the smartest strategic decision was to meet competition head on.

• He tributes Kmart and Target for legitimizing discount stores and also acknowledges that competition with them made Wal-Mart a better company.

• Kmart attack on Wal-Mart best external event in Wal-Mart’s history.


• Sam always experimented with different concepts like Hypermart, Discount drug concept and Sam’s club.

• Sam’s club now is a $10 billion business with huge growth potential.

• Sam’s club was result of competition from Price club stores.


Expanding the Circles

• Wal-Mart is known for its distribution and transportation system.

• Sam always put up a good fight whenever somebody wants to buy a new system.

• He tributes David Glass, Jack Shewmaker and Ron Meyer for putting pressure on him for new systems.

• They were the first to use satellite in retailing


• “So you see, technology and distribution are every bit important to Wal-Mart’s ability to grow and maintain control. But, don’t let anybody kid you. Without the right managers, and dedicated associates and truck drivers all across the system, all that stuff is totally worthless.”


• Think one store at a time

• Communicate, Communicate, Communicate

• Keep your ear to the ground

• Push responsibility and authority down

• Force ideas to bubble up

• Stay lean, fight Bureaucracy


Running a successful company

1. Commit to your business. Believe in it more than anybody else.

2. Share your profits with all your associates and treat them as partners.

3. Motivate your partners. Money and ownership alone are not enough

4. Communicate everything you possible can to your partners.

5. Appreciate everything your associates do for the business.6. Celebrate your successes.7. Listen to everyone in your company.8. Exceed your customers’ expectations.9. Control your expenses better than your competition.10.Swim upstream.


Giving something back

• He discusses how he gave something back to the community in terms of scholarships etc.

• Another issue he discusses is Wal-Mart being the huge importer of overseas merchandise.

• He says in too many cases importing is really their only option as American goods are simply not competitive.


• He accepts that Wal-Mart had fallen into a pattern of knee-jerk import buying without looking at alternatives.

• Today, Wal-Mart instructs their suppliers to look for alternatives in America itself.

• He criticizes the Unions for not believing in free market and new solutions and being interested in only Union jobs.


Wanting to Leave a Legacy

• Sam believes in global economy, successful business is going to do just Wal-Mart is always trying to do: give more responsibility for making decisions to the people who are actually on firing line.

• He would like to see American industry challenge Japanese industry like auto industry.

• Thinks American management has bent too far towards taking care of itself first.


CRITICISM


Criticism of his business policies

• Walton ''was to the faith of consumerism what the Mahatma Gandhi was to nonviolence” – Bob Ortega

• Despite Wal-Mart's claims of ''Made in America'' program, much of Wal-Mart's merchandise was and is made overseas.

• ''The history of the company,'' he writes, ''provides ample evidence that Wal-Mart, like any corporation, is merely a machine, an amoral construct with one imperative: the profit motive. That pursuing that motive to the utmost may have a corrosive effect on communities or individuals -- including people within the corporation -- never enters into the equation.''



• Unfortunately, what America demands is not fairness or decency, but cheap goods and lots of them. It's called capitalism.

• A stingy low-wage employer with an arrogant disregard for local and national laws . – The Nation

• What do you get when you cross gutted labor laws with a corporate culture of impunity? Why, Wal-Mart, of course!

• Who pays for Wal-Mart's cheap products from China: the workers who make them.

• Managers are trained to call a special hotline at the first sign of suspicious behavior, including “employees talking in hushed tones to each other.”



• “From the Chairperson of the ‘Board’ down to the front-line manager … the entire management staff should fully comprehend and appreciate exactly what is expected of their individual efforts to meet the union free objective.”

• Open Doors, Closed Minds

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Criticism of Made in America

• Sam Walton says, he didn't believe in giving "any undeserving stranger a free ride."

• "We feel very strongly," he wrote, "that Wal-Mart really is not, and should not be, in the charity business."

• He did not believe in being generous with company profits.


Criticism of Made In America

• Money that Wal-Mart donated to charity, he reasoned, would only come out of the pockets of "either our shareholders or our customers." (He didn't mention workers, perhaps a tacit acknowledgment that picking their pockets was just business as usual.)

WALMART AT PRESENT

Mike Duke (President & CEO)S. Robson Walton (Chairman)

• The company is the worlds third largest public corporation

• Biggest private employer in the world with over two million employees

• Largest retailer in the world


“Walmart remains a family-owned business, as the company is controlled by the Walton family who own a 48% stake in Walmart”

”Its operations in the United Kingdom, South America and China are highly successful, whereas ventures in Germany and South Korea were unsuccessful”


Other Names

Walmart has 8,500 stores in 15 countries, under 55 different names

US – Walmart

Mexico – Walmex

UK – Asda

India – Best Price


Types of Walmart Stores

• Walmart Discount Stores

51,000 square feet to 224,000 square feet

• Walmart Supercenter

98,000 to 261,000 square feet

• Walmart Neighbourhood Market

average about 42,000 square feet


• Supermercado de Walmart

Walmart opened "Supermercado de Walmart" locations to appeal to Hispanic communities in the United States

• Marketside

chain of four grocery stores, all in the state of Arizona


• Walmart Express

smaller discount store, with a range of services, from simple grocery shopping, to check cashing, and even gasoline service

• Sam's Club

chain of warehouse clubs which sell groceries and general merchandise, often in large quantities.


Statistics

Employees – 2.2 Million

-----------------------------------------------------------

Revenue - US$ 446.950 billion

Operating Income - US$ 26.558 billion

Net Income - US$ 15.699 billion

Total Assets - US$ 193.406 billion

Total Equity - US$ 71.315 billion


Walmart International

“Walmart's international operations currently comprise 4,263 stores and 660,000 workers in 15 countries outside the United States. There are wholly owned operations in Argentina, Brazil, Canada, and the UK.”


Competition

• North America - Kmart, Target, ShopKo

and Meijer

• Canada - Zellers, Hart the Real Canadian Superstore and Giant Tiger

• Mexico –Commercial Mexicana, Soriana


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