Sam Walton, the retailing maverick and founder of the now largest company in the world, started his career with a small investment, a small loan from his family and a lot of determination.
Walton had a dream to grow his small discount store, Wal-Mart, at a relentless pace that would increase his sales high enough that he could drive all costs out of merchandising. Walton believed that finding costs wherever they lay - in the stores, in the manufacturers’ profit margins and with the middleman – and eliminating them, he could drive the prices of his goods down and make Wal-Mart a competitive force in discounting (Huey, par.4).
Walton, through his vision, determination, ability to motivate people and to build a culture within his organization in line with his ideals, has secured himself a title of one of the greatest business leaders of all time.
SAM: THE MAN
Samuel Moore Walton was born March 29, 1918 in Kingfisher, Oklahoma. He later moved to Missouri where he attended and was elected the class president at the University of Missouri. To pay the tuition bill, he worked as a lifeguard, waiter, and maintained a newspaper delivery route of one hundred sixty customers (Kennon, par. 4). After graduation he aspired to attend graduate school, but found he couldn’t afford it and instead took a position with J.C. Penny in their management trainee program.
The seeds of Wal-Mart were planted in the Ben Franklin variety store chain (Friedman, par. 9). Walton opened a Ben Franklin franchise store in Newport, Arkansas in 1945. He quickly grew it to become the top performing Ben Franklin franchise with $250,000 in sales. When his lease was up in 1950, it had become so successful that his landlord, P.K. Holmes thought running a retail store must be a piece of cake (Friedman, par. 10). He refused to renew Walton’s lease forcing Walton to turn the business over to him.
Walton didn’t relinquish his franchise easily. Only after a trip to an attorney was he convinced that there was nothing he could do to save his business. Attorney Fred Pickens Jr. described Walton’s reaction: After clenching and unclenching his fists, Walton stood up and said, “I’m not whipped. I found Newport, and I found the store. I can find another good town and another Ben Franklin.
Sam Walton was born on March 29, 1918 to Thomas Gibson and Nancy Lee Walton near Kingfisher, Oklahoma. They lived on a small farm but when that was proven non-profitable they moved out of Oklahoma to many towns across Missouri. Sam Walton was the starting quarterback for his football team and was an honors student. He attended the University of Missouri, where he majored in Economics. After a few setbacks Sam decided he wanted to own his own department store. His dream came a reality in the fall of 1945 when he purchased a store in Newport, Missouri with the help of his father-in-law.
There is a lot that goes into being a successful company, and making the Fortune 500 list is most every business owner’s dream. Sam Walton is credited with being the founder and first Chief Executive Officer (CEO) of Wal-Mart. Walton and other CEO’s of the company were able to shape the success of Wal-Mart by implementing strategies that would revolutionize the way retail stores do business, all while pushing Wal-Mart to the top spot on the Fortune 500 list. This paper looks at a few different strategies Walton implemented that ultimately benefitted the company to increase revenue. How did Wal-Mart become the retail giant that it is today? T.A. Frank of Washington Monthly gives a brief history of Wal-Mart in his article Everyday Low Vices.
Wal-Mart was conceived and founded by Sam Walton in 1962, at Rogers, Arkansas. Sam Walton started with just a few small variety stores, funded with borrowed money. His goal was to provide affordable products to the public to make life easier. After his success with the first few stores, Sam Walton borrowed more money to build more stores, creating the Wal-Mart empire as we see it today. The retail giant proves its stoic presence in our lives with its $401 billion sales for fiscal year 2009.
This is a good question. Walmart started as a small five and dime in the city of Bentonville, Arkansas by a man named Sam Walton. After a great success Sam and his wife Helen moved to Rogers, Arkansas where he opened his very first Walmart. He had some retailing experience after his time in the war and he chose Bentonville for the hunting season and because his wife wanted to live in a small town. His ideas of not pocketing extra cash from manufacturers, but rather giving deals to customers and trying to make profit off of how much he sold, changed the way retailers make money in America. Sam had a cheap mindset, not only for his customers, but for himself. Even when he became the richest man in America he continued to get his hair done for
Wal-Mart initially began its operations in 1945, when Sam Walton leased a ‘Ben Franklin’ franchise variety store in Newport, Arkansas. After relocating to Rogers, Arkansas in the early 1950s, Sam Walton’s ‘Ben Franklin’ became ‘Walton’s 5 & 10’. By 1962, Walton found himself the chain owner of 11 different Walton’s stores across Arkansas. He then decided to rename the chain ‘Wal-Mart’, after himself. On October 31, 1969, after further expansion across the state, the chain was incorporated as Wal-Mart Stores, Inc. Three years later, Wal-Mart was approved and listed on the New York Stock Exchange (NYSE).
Sam Walton was born in 1918 in Kingfisher, Oklahoma. In 1942, at the age of 24, he joined the military. He married Helen Robson in 1943. When his military service ended in 1945, Sam and Helen moved to Iowa and then to Newport, Arkansas. During this time, Sam gained early retail experience, eventually operating his own variety store. He opened the first Walmart in 1962 at the age of 44 in Rogers, Arkansas. His competitors thought his idea that a successful business could be built around offering lower prices and great service would never work. As it turned out, the company 's success exceeded even Sam 's expectations. By 1990, Walmart was the nation 's number-one retailer. As the Walmart Supercenter redefined convenience and one-stop shopping,
In 1962, Wal-Mart opened their first store in Rogers, Arkansas. In 1970, Wal-Mart's first distribution center and home office in Bentonville, Ark. open and Wal-Mart went public on the New York Stock Exchange. Just nine years from that, Wal-Mart's annual sales exceeded one billion dollars. In 1988, Wal-Mart super centers opened across the country. In a merely three years from that, Wal-Mart opened their own store in Mexico City, Mexico; making Wal-Mart an international corporation. Not even sixty years has past, and yet, Wal-Mart is over-powering our country.
Wal-Mart’s competitive environment is quite unique. Although Wal-Mart’s primary competition comes from general merchandise retailers, warehouse clubs and supermarket retailers also present competitive pressure. The discount retail industry is substantial in size and is constantly experiencing growth and change. The top competitors compete both nationally and internationally. There is extensive competition on pricing, location, store size, layout and environment, merchandise mix, technology and innovation, and overall image. The market is definitely characterized by economies of scale. Top retailers vertically integrate many functions, such as purchasing, manufacturing, advertising, and shipping. Large scale functions such as these give the top competitors a significant cost advantage over small-scale competition.
The Wal-mart is the largest retail chain in United States and in the world. The wal-mart was founded in the year 1962 by Mr Sam Walton. It was originally named as Wal-Mart discount city in Rogers, Arkansas. At the time when the Wal-Mart stores started in the year 1962 it was focused only in small rural cites and town which had a population of 5000 to 25000. It was soon increased to 18 stores in 1969. In the next 30 years it had more than 4750 stores across 50 states in USA and 9 countries with $245 billion sales. It started its international operations in Mexico in the year 1991 and then it expanded it to different countries across Europe and Asia.
With its headquarters in Bentonville, Arkansas, Wal-Mart was commissioned in the hands of its founder Sam Walton. Generally, the Wal-Mart effect is structured in a manner that it aids economic experts to evaluate attached global and local economic effects to the famous Wal-Mart retail. The term Wal-Mart effect is often employed by analysts to refer to the wide variety of both negative and positive influences of the retail business (Hiltzik 1). Evaluation of the retail’s effects is significant as the business is not only a key figure is the world’s economy but also it is arguably the most performing private economic retail. Briefly, Wal-Mart has conventionally caught the eyes of consumers since it not only boosts their experience by suburbanizing local shopping but also it avails low commodity prices for necessities (Neumark, Junfu, and Stephen 406).
Wal-Mart as we know it today evolved from Sam Walton’s goals for great value and great customer service. Mr. Walton’s competitors thought his idea that a successful business could be built around offering lower prices and great service would never work. Mr. Walton also credited the rapid growth of Wal-Mart not just to the low costs that attracted his customers, but also to his associates. He relied on them to give customers the great shopping experience that would keep them coming back. Sam shared his vision for the company with associates in a way that was nearly unheard of in the industry. He made them partners in the success of the company, and firmly believed that this partnership was what made Walmart great.
The first Wal-Mart store opened in July of 1962 in Rogers, Arkansas by Sam Walton who believed that the future of retailing was in discounting and to avoid competing with established giants like Sears and Woolworth, Wal-Mart’s stated out of the large cities in the beginning and this strategy help avoid competition, while in rural areas Wal-Mart began growing their customer base by offering ways to save money and shorter travel distance, Sam Walton felt the best way to make customers happy was to provide the low prices every day (Farhoomand, 2006). The company needed to continually find ways to control the operating costs so the savings would then be passed on to Wal-Mart customers in the form of lower prices than the competitors. Walton was opposed to having any kind of employee unions for its company and saw them as a disruption and an inconvenience (Farhoomand, 2006). The continued search for lower prices made him aware of business related travel cost, Wal-Mart executives stayed in low cost hotels when they traveled and the cost related to the services provided by suppliers, Wal-Mart helped suppliers improve operations and efficiency to produce lower cost. Walton wanted the suppliers to correct any nonessential or insufficiencies existing in their business structures as a way of gaining lower prices and higher value products for its Wal-Mart stores. To further push savings Wal-Mart forced cost down by eliminating the middleman and buying directly from the manufacturers. This cost saving also applied to executive salaries Walton felt providing employees with stock options, training opportunities, and allow employees to grow and develop would be a better way to engage and involve them in his vision (Farhoomand, 2006).
The first Wal-Mart was opened in Rogers, Arkansas, in 1962. By 1969 it was incorporated into Wal-Mart Stores, Inc., and in 1972 went public on the New York Stock Exchange. The company grew steadily across the United States, and by 1990 was the nation's largest retailer. In 1991 and 1994, Wal-Mart moved into Mexico and Canada respectively. By 1997 it was incorporated into the Dow Jones Industrial Average. As of 2005, Wal-Mart has stores in the United Kingdom, and Puerto Rico, and brings in revenue of close to 300 billion dollars a year. In 2006, Wal-Mart invaded the China and India's markets. During the last two decades, Wal-Mart has been able to take advantage of the rise of information technology and the explosion of the global economy to change the balance of power in the business world (Wikipedia, 2006). Today Wal-Mart continues to grow and their success is not only from their sound strategic management planning but also from its implementation of those strategic plans. In other words operational planning has been an important key to their success.
"Wal-Mart: The High Cost of Low Prices." Top Documentary Films. Web. 8 Aug 2011. .
When Sam Walton died in 1992, some industry insiders doubted that the Wal – Mart chain that he had founded some 30 years earlier would retain its prominence as a discount retailer. Lost for good they feared, would be the “magic spark” that Walton used to light fires under the chain’s 1.3 million associates. And, as Wal – Mart stock failed to enjoy the same bull – market growth as many other companies in the mid – 1990s, the pundits appeared to be correct. Today, however, with stores in all 50 U.S. states and nine other countries, Wal – mart has rebounded, leading the pack of discount stores with record earnings. In fact, with $218 billion in annual sales and 100 million customers per week, Wal – Mart is the world’s largest retailer and was named “Retailer of the Century” by Discount Store News.