Wal-Mart - Sam Walton Success Story

"There is only one boss -. The customer and can shoot everyone in the company's chairman down, simply by spending his money somewhere else."

Growing Up

Sam Walton's career in retail began in 1940, when they become sales trainee in Des Moines, Iowa in a JC Penney store. Despite his enthusiasm for serving customers, Walton was not a model employee. His desire to make happy his customers was so great that it often leaves other responsibilities such as paperwork and keeping the books fall into oblivion. It 's almost been fired by his boss who told him that was not cut out for a career in retail. Walton kept his job, however, because of his skills as a big seller.

In 1942, Walton was drafted in the U.S. Army. He worked in the communications division of Army intelligence and was on home soil throughout the Second World War. When he left the army after three years, Walton was married, had a baby, and decided to start their own business to support his new family. With the $ 5000 which was saved by a loan of $ 20 000 from his wife's father, bought a Ben Franklin variety store in Newport, Arkansas. Walton was 27 years.

Starting The Business

Putting in long hours at the store and a strategy for prices far below what his competitors were charging, Walton new business took off. In 1950 he had the highest efficiency Ben Franklin store in the area. Walton's landlord, seeing his success, Walton decided he wanted to sell the store to his son. When Walton refused, the owner decided not to renew the lease Walton and he was forced to close.

Walton 10 commandments for success were:

1) Commit to your business.

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

3) Energize your colleagues.

4) Communicate everything we can to your partners.

5) appreciate everything your associates do for the business.

6) Celebrate your success.

7) Listen to everyone in your company.

8) Exceed the expectations of your customers.

9) control your expenses better than your competition.

10) Blaze your own path.

Determined as ever to succeed in his venture, Walton looked for other rural towns of Arkansas for a new place to open a shop. We came across a small village called Bentonville and opened the Walton Five and Dime in 1950. He made sure to get a 99-year leases on the property this time. The two local competitors in Bentonville did not want to discount their prices and Walton business began to flourish.

Realizing he had a recipe for success, Walton has started looking for other areas of expansion. He borrowed money and used the profits from its first stores to buy more. In 1960, he owned 15 stores but was not always the kind of return on investments they thought would do. He then made the decision to follow a heavy price-cutting strategy and hope to have the volume very high to turn a bigger profit. This was not a new idea. The problem right now is that the majority of shops offering discounts were small, located in urban areas, and focused on specialty items. Walton plan was to change the way retail is done across the country.

Building an Empire

Walton revolutionary project was to have large supermarkets in rural towns that discounted a wide range of products. His initial approach was to Ben Franklin. They refused because they do not like the idea of ​​operating with lower margins. Without a big company behind it, Walton chose to go it alone. In 1962, he mortgaged his house and borrowed against everything that had to open his first Wal-Mart in Rogers, Arkansas, a nearby town of Bentonville.

Excited about the prospects of obtaining discounts and selection that were previously only available in cities, rural customers came out en masse to his shop. The success of his first store allowed him to expand and in 1969 was 18 Wal-Mart in Arkansas and Missouri.

Financed solely by debt and reinvested profits, Walton decided that in 1970 he took the company public. The IPO raised $ 5 million and Walton retained 61 percent of the company. The money was used to repay debts and fuel further expansion. In 1980, 276 Wal-Mart operated.

Integral to the success of Wal-Mart was the leverage of new technologies to improve efficiency and save costs. Walton knew that the key to success in a low-margin business was to tightly control its costs. Wal-Mart was, for example, one of the first major retailers to use electronic scanners at the registers connected to a system of inventory control so you can immediately know which items were selling well and needed to be re-ordered .

The success of his Wal-Mart has led to another idea Sam - Sam's Wholesale Clubs. These would be discount stores that sold to the owners of small businesses in bulk. The idea was another great success for Walton since 1985 and was considered by Forbes magazine to be the richest man in America with an estimated net worth of $ 2.8 billion.

Similar to Ray Kroc, Sam Walton did not invent the retail, has simply changed the business model and way of doing business to make a joint venture more profitable .......