In 1955, when the famous American financial magazine "Fortune" first launched the "Global 500" ranking, it was still in its infancy. After decades of ups and downs, it ranked first among the Fortune Global 500 in 2002, 2003 and 2004. It is the American Wal-Mart retail chain group that created the "global business myth". The following is an analysis of Walmart’s corporate strategy that I share with you.
Wal-Mart's brilliant achievements are unbelievable. Its development process from scratch to dominance only took a few decades. In 1940, Sam Walton, the founder of Wal-Mart, received a bachelor's degree in economics from the University of Missouri; during World War II, Walton served in the Army Intelligence Corps. In 1950, Sam Wharton opened the 5-10 Cent Discount Store in the town of Bentonville, Arkansas, USA. It was just a little-known local small business. In 1962, Wal-Mart opened its first chain store, established its first distribution center in 1970, and embarked on a path of rapid development.
In 1983, the first Sam’s Club was established. In 1988, the first Wal-Mart Supercenter opened. In 1991, Wal-Mart's annual sales exceeded US$40 billion, becoming one of the world's largest retail companies. According to the national service industry classification rankings published by the US "Happiness" magazine in May 1994, Wal-Mart's sales in 1993 reached US$67.34 billion, an increase of more than 11.8 billion from the previous year, surpassing Sears, which ranked first in 1992. (Sears) ranks first in the U.S. retail industry. In 1995, Wal-Mart's sales continued to grow and set a world record in the retail industry, achieving annual sales of US$93.6 billion, and ranking fourth on the Fortune Magazine's list of the largest American companies in the United States. In fact, Wal-Mart's annual sales are equivalent to the sum of all department stores in the United States, and it still maintains a strong momentum of development.
As of April 15, 2001, the company has 4,249 chain stores at home and abroad, divided into four types: discount stores, shopping malls, Sam's Club stores, and home furnishing stores, all of which are operated by the company. Holding shares and implementing direct chain operations. All over the United States, Mexico, Canada, Puerto Rico, Brazil, Argentina, South Africa, China, Indonesia, etc. Its rapid development in just a few decades has to be said to be a miracle in the retail industry. Let’s take a look at how Walmart built this miracle.
Corporate strategy 1. Customer-oriented
Wal-Mart firmly believes that "customers first" is the essence of its success. In 1985, he was listed as the richest man by Forbes magazine in the United States. In 1992, he was awarded the Presidential Medal of Freedom and the founder of Wal-Mart's huge business. Sam Walton said this: "We have only one boss, and that is our customers." He is the one who pays our monthly salary and only he has the power to fire everyone from the chairman up. The reason is simple, as long as he changes his shopping habits and buys things in another store. ?Wal-Mart's business credo is always prominently written on its business premises: Article 1: The customer is always right; Article 2: If you have any questions, please refer to Article 1. ?
Wal-Mart's concept of serving customers does not just stop at logos and slogans, but also goes deep into business service actions. The aisles and lighting in Wal-Mart stores are designed to make customers more comfortable; the greeters at the store entrance are more proactive and enthusiastic than other counterparts; cashiers always work standing to show respect for customers; when any customer is 3 meters away from the salesperson , the salesperson must face the customer, smile, take the initiative to say hello, and ask: Is there anything I can do for you? Wal-Mart strives to make customers feel that this is their store in every chain store, and they will receive attentive and sincere greetings. Reception to ensure that customer needs are met without compromise. It is this customer-first approach that has won Wal-Mart the favor and trust of customers.
Corporate strategy 2. Low prices every day
Wal-Mart has always paid special attention to price competition and has long pursued a business policy of small profits but quick turnover. Walton's famous saying is: "A product costs 8 cents. If the price is 1 yuan, the sales quantity is 3 times that of 1.2 yuan. I don't make much on a product, but if I sell more, I Is it profitable? Therefore, Wal-Mart put forward a resounding slogan: "Always sell goods at the lowest price." Walmart's prices are 5% lower than those of one of its largest competitors, Kmart, on similar items. However, maintaining long-term low prices is not an easy task. The reason why Wal-Mart can maintain its price advantage for a long time is also due to its effective cost control.
1. Strive for low purchase price. Wal-Mart avoids all intermediate links and purchases goods directly from factories. Its strong economic strength gives it strong bargaining power. More importantly, Wal-Mart does not increase its own profits by arbitrarily harming suppliers because of its large scale and strength. Instead, it attaches great importance to establishing friendly and harmonious collaborative relationships with suppliers and protecting the interests of suppliers. Wal-Mart's discounts to suppliers far exceed those of its peers. Kmart, the third largest retailer in the United States, takes an average of 45 days to pay for the goods it supplies, while Wal-Mart only pays an average of 29 days, which greatly stimulates the enthusiasm of suppliers to establish business with Wal-Mart, thereby ensuring the best purchase price for Wal-Mart goods. .
2. Complete logistics management system. Walmart has been called the leader of the retail delivery revolution. Its unique distribution system greatly reduces costs and accelerates inventory turnover, becoming the most powerful support for "low prices every day". Wal-Mart's method of replenishing inventory is called the "cross-loading method." This "non-stop delivery" supply system consists of three parts:
Highly efficient distribution center. Wal-Mart's suppliers deliver the goods to Wal-Mart's distribution center according to the orders of each branch, and the distribution center is responsible for completing the screening, packaging and sorting of the goods. Wal-Mart's distribution center has highly modern mechanical facilities, and 85% of the goods delivered here are processed mechanically, which greatly reduces the cost of manual handling of goods. At the same time, due to the large quantity of purchased goods, automated machinery and equipment can be fully utilized, and the advantage of scale is fully demonstrated.
Rapid transportation system. Wal-Mart's motorized transport fleet is another unparalleled advantage of its supply system. By 1996, Wal-Mart had 30 distribution centers and more than 2,000 delivery trucks to ensure that the time from the warehouse to any store did not exceed 48 hours. Compared with other stores in the same industry, Wal-Mart could replenish goods every two weeks on average. Wal-Mart could guarantee that its branches would be replenished Shelves are restocked on average twice a week. Fast delivery enables Wal-Mart stores to maintain normal sales even if they maintain only a small amount of inventory, thus greatly saving storage space and costs. Due to the effective operation of this fast transportation system, 85% of Wal-Mart's goods are transported through its own distribution center, while only 5% of Kmart's goods are transported. As a result, Wal-Mart's cost of sales is 2-3 lower than the average cost of sales in the same industry, becoming Wal-Mart's global leader. The solid foundation of the annual low price strategy.
Advanced satellite communication network. The satellite communication network system established with huge investment has made Wal-Mart's supply system more perfect. The application of this system enables the distribution center, suppliers and every sales point of each branch to form a connected operation, which can be completed in just a few hours? Fill in the order? Summarize the orders of each branch? Send the order? The entire process greatly improves the efficiency and accuracy of business.
3. Effective control of marketing costs. Wal-Mart controls marketing costs very strictly. Wal-Mart's advertising spending is only one-third that of Sears, the second-largest chain in the United States, and its sales per square foot are twice that of Kmart, the third-largest chain in the United States. Wal-Mart's marketing costs only account for 1.5 of sales, and the product loss rate is only 1.1, while the average values ??of these two indicators for general American retail stores are as high as 5 and 2 respectively. These have further strengthened Wal-Mart's ability to implement low-price strategies.
Corporate Strategy 3. New Concept of One-Stop Shopping
At Wal-Mart, consumers can experience the new concept of One-Stop Shopping. In terms of product structure, it strives to be rich in variety and characteristics to meet the various preferences of customers. It operates a wide range of items, including food, toys, new clothing, cosmetics, household appliances, daily necessities, meat, fruits and vegetables, etc.