1. Money

Sam Walton (aka Samuel Moore Walton)

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Born:

March 29, 1918 to his parents Thomas Gibson and Nancy Lee Walton near Kingfisher, Oklahoma.

Died:

April 5, 1992

Quick 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.

Walton's 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 couldn't 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 company's 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 company's 1970 initial public offering.

Supply Chain Brilliance:

Walton figured out how to expand the business using a combination of bank debt and vendor's 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-Mart's coffers for twenty-seven days.) This rapid inventory turn continues at the company today.

Technology & Wal-Mart:

Sam's brilliance was evident by the way he permitted the company to embrace technology. In the early 1980's, 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 Walton's Legacy:

Today, Sam's legacy for low-cost operation can still be felt at Wal-Mart. The corporate headquarters of the world's 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.

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