sam walton.doc

Born:March 29, 1918 to his parents Thomas Gibson and Nancy Lee Walton near Kingfisher, Oklahoma.Died:April 5, 1992Quick Facts about Walton: Despite having billions, Walton still drove a pickup truck and wore clothes from his own discount store, Wal-Mart. After losing a bet in 1984 to Wal-Mart store managers that they could not earn a pretax margin larger than eight percent, Walton dressed up in a grass Hula skirt and floral shirt. Walton opened his first store, a Ben Franklin franchise, in Newport, Arkansas on September 1, 1945 after his wife insisted she would not live in a town of more than 10,000 people.Waltons Educational Background:Sam attended the University of Missouri where he was elected Senior Class President. To pay the tutition bill, he worked as a lifeguard, waiter, and maintained a newspaper delivery route of one hundred and sixty customers. Following graduation, he aspired to attend the Wharton School of Business but quickly found he couldnt afford it. He instead took a job as a manager trainee at J.C. Penney. Today, the Walton College of Business at the University of Arkansas bears his name.The Pre- Wal-Mart Years:After his stint at J.C. Penney, Walton knew he wanted to go into retailing. He began reading everything he could on the subject and visiting different stores. While still operating his Ben Fanklin franchises, Walton approached Herbert Gibson, founder of an already-successful discount chain in the south, to discuss the possibility of a partnership. Rebuffed for having too little capital, the retailing giant decided to go it alone from scratch.Starting a New Business:The first Wal-Mart opened in 1962 in Rogers, Arkansas. Originally, stores were located within one-day driving distance from the companys distribution center in order to ensure almost instantaneous restocking. Sales increased from $313 million to $1.2 billion during the 1970-1980 period while the number of stores increased 8.5 fold. Much of this increase came from bank debt which was largely paid off with the proceeds of the companys 1970 initial public offering.Supply Chain Brilliance:Walton figured out how to expand the business using a combination of bank debt and vendors money (viz., his supply chain was so efficient, he would order a product and have it sold in three days while only having to pay his vendor every thirty days; keeping the float in Wal-Marts coffers for twenty-seven days.) This rapid inventory turn continues at the company today.Technology & Wal-Mart:Sams brilliance was evident by the way he permitted the company to embrace technology. In the early 1980s, the business was one of the first to utilize Universal Product Code (barcodes) to automate the inventory process. In 1983, the business spent tremendous amounts of capital on a private satellite system that could track delivery trucks, speed credit card transactions, transmit audio and video signals, as well as sales data.Sam Waltons Legacy:Today, Sams legacy for low-cost operation can still be felt at Wal-Mart. The corporate headquarters of the worlds largest retailer resembles an old elementary school or bus station; there are no marble floors, solid cherry custom-built furniture, or executive dining areas. Management still stays at budget hotels when taking business trips and the overwhelming corporate mission is to keep prices low and associates happy.Contrary to popular belief, Sam Walton (the founder of Wal-Mart) was not from Arkansas. He was actually born in Kingfisher, Oklahoma on March 29, 1918. He was raised in Missouri where he worked in his fathers store while attending school. This was his first retailing experience and he really enjoyed it. After graduating from the University of Missouri in 1940, he began his own career as a retail merchant when he opened the first of several franchises of the Ben Franklin five-and-dime franchises in Arkansas. This would lead to bigger and better things and he soon opened his first Wal-Mart store in 1962 in Rogers, Arkansas. Wal-Mart specialized in name-brands at low prices and Sam Walton was surprised at the success. Soon a chain of Wal-Mart stores sprang up across rural America.Waltons management style was popular with employees and he founded some of the basic concepts of management that are still in use today. After taking the company public in 1970, Walton introduced his profit sharing plan. The profit sharing plan was a plan for Wal-Mart employees to improve their income dependent on the profitability of the store. Sam Walton believed that individuals dont win, teams do. Employees at Wal-Mart stores were offered stock options and store discounts. These benefits are commonplace today, but Walton was among the first to implement them. Walton believed that a happy employee meant happy customers and more sales. Walton believed that by giving employees a part of the company and making their success dependent on the companys success, they would care about the company.By the 1980s, Wal-Mart had sales of over one billion dollars and over three hundred stores across North America. Wal-Marts unique decentralized distribution system, also Waltons idea, created the edge needed to further spur growth in the 1980s amidst growing complaints that the superstore was squelching smaller, traditional Mom and Pop stores. By 1991, Wal-Mart was the largest U.S. retailer with 1,700 stores. Walton remained active in managing the company, as president and CEO until 1988 and chairman until his death. He was awarded the Medal of Freedom shortly before his death.Walton died in 1992, being the worlds second richest man, behind Bill Gates. He passed his company down to his three sons, daughter and wife. Wal-Mart Stores Incorporated (loc