Essentials of Business Management
When Sam Walton opened the first Wal-Mart store in 1962, it was the beginning of an American success story that no one could have predicted. A small-town merchant who had operated variety stores in Arkansas and Missouri, Walton was convinced that consumers would flock to a discount store with a wide array of merchandise and friendly service. Hence, Wal-Mart's mission is to deliver big-city discounting to small-town America.
From humble, hard-working roots, Sam Walton built Wal-Mart Stores, Inc. into the largest, fastest-growing, and most profitable retailer in the world.
A child of the Depression, Sam always worked hard. He would milk the cows, and by the age of eight, he started selling magazine subscriptions. When he turned 12, Sam took on a paper route that he continued well into his college days to support himself. Walton began his retail career at J.C. Penney in Des Moines, Iowa in 1940 making just $75 per month. In 1945, Sam borrowed $5,000 from his wife and $20,000 from his wife's family to open a Ben Franklin five and dime franchise in Newport, Arkansas.
In 1950, he relocated to Bentonville, Arkansas and opened a Walton 5&10. Over the next 12 years they built up and grew to 15 Ben Franklin Stores under the name of Walton 5&10. Sam had plenty of new ideas. He liked to deal with the suppliers directly so he could pass the savings on to the customers. He later brought a new idea to Ben Franklin management that they should open discount stores in small towns. They rejected his idea.
The First of 3054
Sam and his brother James (Bud) opened their first Wal-Mart Discount City store in Rogers, Arkansas in 1962. Walton and his wife Helen had to put up everything they had, including their house and property to finance the first 18,000 square-foot store.
With gradual growth over the next eight years, they went public in 1970 with only 18 stores and sales of $44 million. While other large chains lagged behind, Wal-Mart soon grew rapidly in the 1970's, due to their highly automated distribution centers and computerization. By 1980, they were up to 276 stores with revenues of over $1.2 billion.
Sam Walton's guiding philosophy for his stores from the beginning was to offer consumers a wide selection of goods at a discounted price. The company saved money by keeping advertising costs low and located stores in small towns where residents had few options for retail shopping. On one level, Sam Walton was just folks, the guy with the red dented pickup with the bird dogs in back. On another, he was the flinty entrepreneur, there to peer as deep into the salesmen's souls as into their sample kits and persuade them to give a deeper discount for Wal-Mart's bulk and massive purchases.
Wal-Mart's success in small towns led to criticism that the stores took business away from small, hometown merchants. Nevertheless, the company managed to successfully market the stores as friendly,...