World Business Giants Wal-Mart’s Success
World business giants Wal-Mart’s success Mention “Wal-Mart,” the name is no stranger to Chinese consumers, it is well-known U. S. retailers. Its founder, Sam. Wal-Mart in the town of Dayton in 1945 and started operation in Bentonville, retail trade, after decades of persistent struggle, and finally establish the Kingdom of the world’s largest retail trade. Sam. Walton had been “Forbes” magazine as the nation’s first billionaires, but also because of its outstanding entrepreneurial spirit of President George W. Bush in 1991 was awarded the “Presidential Medal of Freedom,” which was an American citizen’s highest honor.
Wal-Mart is the nation’s highest rate of return on investment companies. Its investment rate of return of 46%, even in times of recession in 1991, up 32%. His history is far from the U. S. retail industry a century-old store “Sears” So long. However, in a short period of 30 years time, it will grow to become the nation and the world’s largest retailer. At present, Wal-Mart’s business philosophy, management skills, has become a hot topic in American management circles. Competitive strategy of encircling the cities from rural areas Wal-Mart’s early days, faced with a powerful Sith, Kmart and other retail giants.
At that time, these large retail enterprise business is largely concentrated in large and medium cities, but for small towns are ignored. Because they believe that small towns do not offer retail business conditions, more than 25,000 in population only to set up shop in the area, but Sam. Walton, however, seize this aircraft, developed and adopted a “encircling the cities” strategy, the selected small towns serve market segments. Their specific implementation strategy is based on the state as a unit, a county a county filled, until the entire state of market saturation, and then back to another state expansion.
By a county to a state, a state to a region, then a regional expansion throughout the country. Sam. Wal-Mart’s principle is that as long as the population in the construction of shops between 5000-10000. Wal-Mart’s successful use of a small town retailers, this has been forgotten by other segments of the market, rapid development, while avoiding competition from other retailers. And other retailers, aware that time, Wal-Mart’s business has become Liaoyuanzhishi, unstoppable, in the National Retail gaining a solid footing.
In order to ensure their rapid development, not just Wal-Mart to open stores, but also established a Sam’s Club: as little as 25 U. S. dollars for each customer you can get a membership in order to obtain a large number of wholesale merchandise. At the same time, Walsh Matthew also used mergers and means, has 112 stores strategic measures to ensure the rapid development of the Wal-Mart. Wal-Mart’s business expansion plans 1960 1970 1980 1990 Sales 1. 4 million U. S. dollars 36 million U. S. dollars 1. 2 billion U. S. dollars 26 billion U. S. dollars Profit 112 thousand U. S. dollars 120 U. S. dollars 41 million U. S. dollars 1 billion U.
S. dollars Number of commercial rub 9 32 276 Discount sales business strategy Wal-Mart is able to quickly develop, in addition to the right strategic positioning, would also benefit from its first “discount marketing” strategy. Wal-Mart stores every quote there is “every day low-cost” big banners. The same kind of goods in Wal-Mart cheaper than other stores. Wal-Mart promoted low-cost, low-cost structure, low-cost business ideas, advocated greater yield benefits to consumers, “for customers to save every dollar,” is their goal. Wal-Mart’s profits are usually about 30%, while other retailers such as Kmart’s margins are about 45%.
Manager of the company held on every Saturday morning staff meetings, if there are branches that certain goods in other stores than Wal-Mart’s low, immediately decided to drop. Low price, reliable quality is a major competitive advantage of Wal-Mart has attracted a batch after batch of customers. Reposted elsewhere in the Research Papers Download http://www. hi138. com Improve the distribution system has become highly efficient protection of Wal-Mart’s products as “affordable”Known. In order to achieve “cheap”, only the purchase price down and work hard.
Wal-Mart purchase directly from the factory, commodity intermediaries significantly reduced. Meanwhile, the smart buyer is always painstaking bargaining, try to turn the price pressure to a minimum. The past, the retail outlets to the manufacturer by orders, and then by the various manufacturers will be sent to the various goods store. The Wal-Mart introduced a “unified ordering, the central allocation. ” First of all branch orders are aggregated into the headquarters, and then co-ordinate orders from headquarters. After the transaction of goods, they were sent directly to the company’s distribution center.
A total of 20 Wal-Mart distribution centers nationwide, and then sent to various outlets from the distribution center. Distribution center location of choice after a careful study must be able to ensure that products shipped from distribution center to various branches of the period of not more than a day. Company has a dedicated team, with more than 6,000 trucks, 4,900 boxes per day delivery. Wal-Mart stores with more than 80,000 kinds of commodities, and of which 85% of the goods by the company’s distribution center in the direct supply, while other competitors can only achieve 50% to 60% level.
A result, retailers from Wal-Mart opened on the computer out of order-to-goods shelves for an average period of time only two days, while the other competitors take about five days, because they can not through its own distribution network transport is more multi-commodity. Efficient distribution system greatly reduces the transportation costs of Wal-Mart. Wal-Mart stores cost of goods shipped to only 3%, while the competitors will need 4. 5% to 5%. This ensures that Wal-Mart’s low prices can sell their goods on the competitor acquired the same profits.
Overall order is not only price discounts available to bring economies of scale, and the unified deployment of resources and greatly shortened the goods from the factory to the retail time, greatly improves work efficiency. Can be said that Wal-Mart in the distribution system, achieved by the efficiency and scale of Wal-Mart, one of the biggest competitive advantage. The implementation of high-tech information management Wal-Mart is able to do low-cost, depending on the sound distribution system. The distribution system also relies on advanced computer technology to guarantee.
The company applied to distribution systems and computer inventory management. Company’s headquarters have a high-speed computers, with 20 delivery centers and more than 1,000 stores to connect. Payment counter scanners sold through the store every piece of merchandise, are included in automatic computer. When a cargo down to a certain number of hours, we will send the signal to store a timely request to the headquarters after the purchase based supply arrangements sent to stores from the nearest distribution center, and then arranged by the distribution center’s computer Send the time and route.
At the store 48 hours after placing an order, the required items will all appear on the shelves. This highly efficient inventory management, the company quickly grasp both sales, but also lack of timely replenishment of stock; neither inventory nor commodity merchandise in and accelerate cash flow, significantly reducing capital costs and inventory costs. At the same time, the company in 1986 with Daimler-Benz signed a contract to spend 24 million U. S. dollars, established a satellite interactive communication systems. With the system, can be in all stores, distribution centers to communicate.
The company has a six-channel satellite system, you can at the same time, and more than 1000 stores video calls. In this way, the headquarters of the meetings and decision-making can be transmitted via satellite to various outlets can also be a new product demonstrations. Wal-Mart has spent a total of 700 million U. S. dollars not be completed until now the computer satellite systems. This is the world’s largest commercial database, than the American Telephone and Telegraph Company’s even more significant. This high-tech communications system to make information within the company to timely, rapid and smooth flow.
It is this advanced communication system is the basis for efficient management of Wal-Mart. High-tech distribution system is the growth of Wal-Mart to develop and maintain control of important factors. Support Wal-Mart’s corporate culture is unique Wal-Mart has nearly 400,000 employees. Companies are not the employees as “employees” to look at, but as “partners” and “colleagues. ” The company provides all of the subordinates called “colleagues” not “employees. ” Sam. Walton that “concerned about their colleagues, they will care about you” to train employees “love companies like loving home” spirit.
Company’s concern for the interests of employees is not just lip service or a few banners on the type of corporate culture theory, but a set of detailed and specific implementation plans. The company will “employees are partners,” the concept of specific policy plans for the three complement each other “profit-sharing plans, employee stock purchase plan, loss of incentive plans. In the profit-sharing plan, the company ensure that every one in the company more than a year, as well as work for at least 1,000 hours a year or more employees are entitled to a share.
The use of a formula related to profit growth, Wal-Mart employees of each qualified wages in the percentage of classified to this plan, employees left the company in cash or stock can be removed this share. The employee stock purchase plan, employees can deduct wages way below the market value of 15% of the price to buy shares. Loss is the enemy of the retail industry, Wal-Mart to control this flawed approach is to share the company with employees to reduce wear and tear due to be profitable.
If a store will be loss of control in the company’s goals within the store are available to each employee bonuses, up to 200 U. S. dollars. A result, Wal-Mart’s loss is only half the industry average. Moreover, it prompted an increase of employees trust each other. Wal-Mart’s business will be the weekly Saturday morning. Weeks will be to explore and debate the morning business ideas and management strategies place. Could make recommendations at the meeting in recognition of the advanced and found that discussion a solution.
In this way, the problems identified immediately at the weekend could be solved in time, without having to wait until next week. Sam. Walton said that Wal-Mart on Saturday morning will be the core of the culture. Its basic purpose is to exchange information, reducing the burden of everyone’s thinking, united team. Companies often after the meeting on Saturday morning get-togethers, shouting slogans, and inspiring, a get-together, reducing the burden of each employee so that employees receive physical and mental pleasure, but also strengthened the cohesion, unity and the team.
It is easy to employees arising from the joyous get-together on Saturday, brought to work in an atmosphere, which is sought by Wal-Mart’s “Let the stores keep a relaxed atmosphere. ” The company also provides employee into the store every day on their hands sworn to ensure that customers walk 10 feet away from the salesman, when, it is necessary approached greeting smile. In order to train employees, the company set up the Walton Academy of Science, the best possible training to employees. The company launched a “to the general manager wrote,” the campaign to encourage employees to write to the Managing Director.
All these indicate that companies pay attention to listen to the voices from the grassroots level. Because Wal-Mart’s motto is “contact with customers is the front-line staff, rather than sitting in the office of the bureaucracy. ” This system to ensure timely feedback of information, but also encourage employees to improve the management made a number of fruitful suggestions. All of these constitute a unique culture of Wal-Mart, which is the mainstay of support for the retail giant. How to do retail business in China
Shanghai’s Hualian, Nanjing Su fruits are “breeding ground corner”, has a strong regional limitations. At the same time a large-scale foreign retailers in the Chinese market, “beach landing,” such as Wal-Mart, Carrefour, wide long-off and so on, to the enormous impact of state-owned retail business. However, almost all of China’s foreign retailers concentrated in large cities, the state-owned retail enterprises is not without room for development. We look forward to the early emergence of Wal-Mart in China.
