Sam Walton’s experience in founding Wal-Mart

Sam Walton

Sam Walton

The world-famous Wal-Mart was founded by Sam Walton. After decades of development Strive to become the world's largest retail kingdom, ranking first on the Fortune magazine's Global 500 list in 2001. Sam Walton's wealth has been achieved so quickly because it's actually very simple: low price, low price, and low price.

When you walk into the door of Wal-Mart, the first thing you see is the slogan "affordable prices every day, consistent", which is even printed on Wal-Mart's shopping bags. There is an essential difference between everyday price parity and general profit-cutting. It uses low-price sales as a long-term marketing tool and insists that every product be cheaper than other stores. This guiding philosophy has made Wal-Mart an expert in cost control in this industry, because only by minimizing costs can we truly achieve affordable prices every day. Wal-Mart's low cost mainly relies on the following aspects:

(1) Adopting warehousing-style operations. Walmart stores are simply decorated, and most of their products come in large packages.

(2) Strengthen cooperation with suppliers. Due to the large purchase volume, goods are generally purchased directly from the factory. Through computer networking, information sharing is realized. Suppliers can understand Wal-Mart's sales and inventory status at the first time, and arrange production and transportation in a timely manner.

(3) Powerful distribution center and communication equipment provide technical support. Wal-Mart has the largest private satellite communication system and the largest private transportation fleet in the United States. The computers of all branches are connected to the headquarters. Generally, branches can receive goods from the distribution center within 24 to 48 hours of placing orders. Such fast information feedback and efficient inventory management greatly reduce inventory, speed up capital turnover, and naturally reduce costs.

(4) Strictly control management expenses. Walmart's overhead expenses are 2% of the company's sales, compared with the industry average of 5%.

(5) Reduce advertising costs. Wal-Mart believes that maintaining low prices every day is the best advertisement. Among its peers in the retail industry, it has the lowest advertising expenses but the largest sales. Wal-Mart places providing customers with first-class services as strategically important as "affordable prices every day". Wal-Mart declares: "We strive to ensure that every product is satisfactory to you. If you are not satisfied, you can return the goods within one month and get back the full payment." The reason why Wal-Mart is able to do this is not only because it maintains affordable prices. At the same time, it tries to purchase local famous brand and high-quality products, and the quality of the products is guaranteed. More importantly, it believes that the cost of regaining a customer is five times more than retaining an existing customer.

(1918-1992)

In the last 50 years of the 20th century, the person who most vividly demonstrated the vitality of the American dream was Sam Walton. After decades of hard work, Sam Walton developed a humble grocery store in the small town of Bentonville, Arkansas, into a global retail king and the world's number one enterprise with more than 4,000 chain stores. ——Wal-Mart.

Wal-Mart is the largest retail company in the world. Its president, Sam Walton, was diagnosed with hairy cell leukemia in 1982. At that time, Wal-Mart had a turnover of more than one billion US dollars; In 1989, Walton was diagnosed with malignant bone marrow cancer. In 1990, he made a plan for Wal-Mart for the next 10 years. By 2000, the company's sales will reach 129 billion US dollars, making it the world's largest company.

A powerful retailer, his goal has been achieved. But he passed away in 1992.

Walton often said that money is not so important after it exceeds a certain limit. What matters is the size of the business.

Approaching death often makes people think more clearly.

That was the case for Sam Walton. On a sunny day in November 1989, in a remote area of ??Rio Grande, Texas, a seemingly small incident made Sam discover how short life was for him.

Walton spent the whole day traversing the ranch grassland, hunting quail. After returning, he found himself locked outside the igloo at one end of the camp.

Walton and Shearer were standing outside his igloo. Walton noticed that a small window was open, so he climbed on the cowboy's shoulders and tried to get in through the small window. It worked, but the hound that had been barking in his ear got caught in the window and hit him in the chest.

The next morning, he still felt pain, but he didn't care and went hunting anyway. At the end of the day, he was still hurting, and the pain had spread into his upper arm, much worse than the unexplained pain he had felt for months. There was no other way. Walton thought it was best to ask a doctor for a check-up. He boarded the small twin-engine Seth that he had bought years ago - used, of course - and flew to Houston.

In 1982, Walton was diagnosed with hairy cell leukemia, a blood cancer that destroys white blood cells in the body's blood. Since then, he has been traveling back and forth to Houston for medical treatment. Walton has always been active and energetic. He often gets up very early and works for a long time before he can shine. But that year, he felt more tired and weaker day by day. At first, he thought it might be because his wife Helen kept complaining that the workload was too heavy. So, despite the pain of his illness, he began delegating more work, compressing his busy travel schedule, and trying to relax by hunting and playing tennis.

Even this is of no avail. So Walton had to get a thorough check-up, even though he had never liked going to the doctor. Doctors in Arkansas discovered that his white blood cell count was disturbingly low. They told him he had had a chronic form of leukemia for at least six or seven years. What caused it? They don't know. Is it possible to be cured? They couldn't tell clearly. But Walton could get the best care money could buy, so they recommended he go to M.D. Anderson Hospital in Houston, one of the best cancer research centers in the country. There, an oncologist named George Quesada was conducting experimental treatments for hairy leukemia using interferon, an unusually expensive substance carefully extracted from white blood cells. At the time, 300 donors were needed to provide enough interferon to treat a patient for three months, at a monthly cost of about $10,000.

Queseida is not the kind of person who hides the truth. The standard treatment, he said, would have been to remove Walton's spleen, followed by chemotherapy. However, he told the unfortunate patient that this treatment had only a 25% success rate. This success only meant that the patient could live for at least another 5 years. Walton has always been averse to surgery, but he has always had a fighting spirit. He said flatly that surgery was out of the question. So, are there any other options?

In fact there is only one other option. Queseda said he could become a patient receiving research treatment with interferon. This can come with risks, such as bleeding or infection, and potential side effects, including flu symptoms and fatigue. But even then, Quesaida, who was treating leukemia patients with fewer than ten hairy cells with interferon, was clearly enthusiastic about his initial results. He told Walton that it appeared to help patients maintain their white blood cell counts while strengthening their immune systems. He also said that this is an experimental treatment and so far, although the results are encouraging, it is still in its infancy. Regardless, he shrugged, the worst-case scenario was that the treatment wouldn't work and they could consider surgery and chemotherapy.

Become a subject of experimental medical treatment? Walton isn't very interested in this either, he needs to think about it. “He mainly wanted to make sure the treatment wouldn’t interfere with his extremely busy work schedule,” Quesada later recalled. Walton flew home to Bentonville, told Helen about his situation, and published a letter in the company's internal newsletter, Wal-Mart World, in October 1982. In the letter, he informed the company's 41,000 employees of his diagnosis, downplaying the seriousness of his illness with his usual seriousness and simplicity, saying that he was otherwise in good health.

The casual attitude adopted in his letter hardly reflected his true feelings. In business, he can make decisions quickly with keen intuition honed over many years of experience. But this matter was different. He didn't know what to do at all.

He spent a month thinking about what to do, then flew to Houston to ask more questions about treatment. Quesada greeted him with new news: Doctors had discovered how to use genetic engineering to select artificial interferons, making the substance easier to obtain - otherwise, for Walton , the acquisition of interferon may already be a problem. Walton rigorously questioned Quesaida and other doctors about the possible risks and possible benign effects of such treatment. Quesada told him bluntly that because the drug was so new, there was still a lot to learn about it. Walton returned home and thought about it for another long month before finally deciding he wanted to try the treatment.

He learned how to inject himself and how to ask others to inject themselves. His entire course of treatment required daily interferon injections for the first six months and three times a week for the other six months. Less than half a course of treatment, the disease was under control, the leukemia was slowly receding, and it no longer bothered me.

It all became so easy.

That was about seven years ago. The leukemia hasn't really bothered him since, although he continues to go to Quesaida a few times a year for checkups. Three months before this hunt, he had gone to the doctor. Quesaida had noticed the subtle changes in Walton's white blood cells, but he was unable to find out the cause because Walton did not want to stay here for three days so that Dr. Quesaida could put into practice what he was thinking. practice.

Now, when Walton appeared with strange pain in his chest and arms, doctors took some bone marrow from his hip and through laboratory analysis, found that he had malignant bone marrow cancer—— Multiple myeloma.

This time, Quesaida’s prediction was even more cruel and there was no cure. It's a much more challenging disease, he said. It's possible to make it regress with chemotherapy and radiation therapy, but it's too difficult to keep it from coming back.

Treatment will also be more difficult. Walton did not suffer from serious side effects from the interferon treatment. However, Quesada warned that he should be prepared for radiation therapy as well as the depleting effects of chemotherapy. Unless one is very lucky, the disease itself brings with it feelings of pain, sometimes severe pain. His bones were damaged and fragile. He will become weaker and tire more easily.

Walton is more confident in Quesaida than the first time. However, he still carefully asked various questions to the doctor. Are there other treatments that are more natural than what they might try? If nothing else, it sounds like chemotherapy and radiation would be too time-consuming. With the help of his family, especially his son John, whose daughter also had cancer, Walton researched different treatment methods, asking doctors one after another about natural remedies, unconventional treatments, vitamins, etc. All methods that may replace or reduce chemotherapy and radiation therapy.

He contacted Cancer Fighters, an Iowa nonprofit organization that provides cancer patients with information about cancer research and treatments, including alternatives to medical treatments. center. Walton has always been a methodical person, otherwise, he would not have achieved what he has achieved today. However, it soon became clear to him that bone marrow cancer would undoubtedly be fatal. In the end, Walton had no choice but to undergo conventional chemotherapy and radiation therapy.

How would Walton react to the fact that death could come at any time? This is difficult to say. He was always enthusiastic and took obvious pleasure in boosting the morale of his employees; he turned his conversations with clerks into rallies; however, he was a person who was particularly reluctant to exchange thoughts and feelings with others. Except sometimes to Helen, he almost never talked about himself. Helen, like him, is a very strict-mouthed person. William H. Enfield, Walton's old friend for more than 40 years, said this: "From a personal perspective, I probably know Helen and Sam better than anyone here, but for them, There’s still a lot I don’t understand, and I’ve never tried to understand it.”

The hypothesis drove Walton to re-examine his life, wondering if he would have slowed down the pace of life earlier. Spend more time with Helen and the kids; or should he be gentler on the people who have poured their hearts and souls into building his retail empire. These ideas are indeed very tempting.

Tempting, but probably wrong. Eventually, as death loomed ever closer, Walton did admit that he began to have existential questions late at night. But in the end, it seemed like it was just beginning and then quickly disappeared.

These are things for the future. After his diagnosis came back, he went back to hunting bigger quail.

Walton often said that money is not so important after it exceeds a certain limit.

He has a cool attitude towards his wealth. This public profile was further confirmed by his reaction to a stock market crash. On October 19, 1987, the stock market plummeted. The Dow Jones Industrial Index fell 508 points in one day. Wal-Mart's stock fell 32% from its price a week ago, causing Walton to lose a net worth of US$1.7 billion. Walton went to Little Rock that day to hold a press conference on higher education issues with some other Arkansas company leaders. When he arrived at Mayor Bill Clinton's office, reporters asked him for his reaction to the stock market crash.

"Money is just pieces of paper," he said, seemingly calm. "This was true when we started the business, and it will be the same after that."

Money is not important, what is important is the size of the business. His goals were always audacious. In 1976, 125 retail stores had total sales of $343 million that year. Walton confidently promised publicly that within five years he would triple sales. "You can write it on the wall now if you want," he told Janet Rhytis. Rhitis is a writer who is writing an interview about Walton for Financial World. "By January 31, 1981, we will reach a turnover of $1 billion." As a result, Wal-Mart reached a turnover of $1.25 billion a year earlier than his scheduled date.

By 1985, Wal-Mart reported sales of $6.4 billion, still behind Kmart ($22 billion) and Sears ($25.03 billion), when Walton and Glass are already talking openly about becoming the nation's largest retailer.

Now in 1990, Walton began to plan for Wal-Mart's next 10 years. He believes that there is no problem in catching up with Sears and Kmart, and it can be done in the next two years. He was pretty sure, so he might live long enough to see it. He is more interested in exploring the potential of Wal-Mart.

The next year, at the annual meeting, he confidently announced the calculation results to the delighted shareholders: Whether he is still alive or not, Wal-Mart's sales will increase fivefold by 2000. Above, reaching 129 billion US dollars per year - far more than Sears and Kmart, thus becoming the most powerful retailer in the world.

Now, his goal has been achieved.