Important Lessons We Can Learn From the Business Life of Sam Walton

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Table of Contents

Introduction
Innovation
Persistence
People skills
Conclusion
References

Introduction

Sam Walton is better known for pioneering the Walmart retail chain of stores, which has since then grown to become one of the world’s largest retail stores by revenue and also ranks highest as one of the biggest private employers in the world. Walmart started as a single retail shop and later built on its successes to grow into one of the largest retailers in the world. Sam Walton helped build Walmart to global positioning by following both entrepreneurial and business strategies that may have seemed incomprehensible at the time (Garrison, Noreen & Brewer, 2005).

Innovation

Sam Walton could be viewed as an innovative business leader. He helped pioneer the discount store concept when establishing Walmart. According to Garrison, Noreen, and Brewer (2005), Sam Walton was an innovative business manager who chose to focus on increasing sales volumes while the rest of the peer companies focused on establishing healthy profit margins on their products. As a result, Walmart had low profits per product item on its shelves (Garrison, Noreen, and Brewer, 2005). The idea of setting low-profit margins on products could be considered quite risky, given the high competition in the retail-store market. Innovation can be described as experimenting with new ideas and concepts, in the process developing a new way of thinking that changes the way business is carried out.

Persistence

Risk-taking is a characteristic prevalent in most entrepreneurs, as they are seen as taking chances in anticipation of future benefits and profits. By setting low-profit margins, Walmart was able to undercut its competitors in terms of pricing and therefore, offer better rates to consumers. As a result, Walmart was able to derive high sales volumes, quickly surpassing its competitors in the field. In the long run, Walmart was able to make greater profits due to the increased sales (Garrison, 2010). This in turn fueled growth for the discount chain retail store both nationally and globally. Increasing sales further meant that Walmart could further reduce its prices lower and still profit from lower than industry average markups. Risk-taking does not always work out the first time. Sam Walton met several challenges along the way, including people advising against his business model. Instead of following the crowd, Sam Walton was relentless in his quest to build Walmart and make it more competitive relative to big companies in the market at the time (Garrison, 2010). His persistence paid off in the long run as Walmart was able to outgrow its competitors who used the more traditional business approach. To maintain profitability, Walmart ensured that it controlled its costs.

People skills

Another great attribute of Sam Walton was how he dealt with people. Sam Walton believed that building and sustaining strong relationships with people was a great way of growing a business (Garrison, 2010). He valued people, regardless of their position in the company. Sam Walton valued employees’ opinions, and carefully listened to them as they were an integral part of his company. Listening to employees and always keeping them up-to-date with the latest developments in the company not only empowers them, but also keeps them in the loop in what is going on within the company, and how they and their performance will be affected. Employees are in a better position to understand their work environment.

Conclusion

Emphasizing customer value, as part of establishing and sustaining human relationships, also helped grow Walmart. Sam Walton made sure that customers’ needs were always satisfied by ascertaining that customers could find all their needs inside Walmart. Walmart guaranteed to customers that they could find everything under one roof, thus making sure that the customers always came back for repeat purchases. Walmart, therefore, exceeded customer expectations due to its huge collection of items and relatively low prices, which made it build on brand loyalty, growing and maintaining its large market share in the process.

References

Garrison, R.H., 2010. Homework Manager for Managerial Accounting. New York, NY: McGraw-Hill.

Garrison, R.H., Noreen, E.W., & Brewer, P. (2005).Managerial Accounting. New York, NY: McGraw-Hill.

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Important Lessons We Can Learn From the Business Life of Sam Walton

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