See how Sam Walton achieved it~”
1.Low-Cost Strategy
In the United States, the population is a crucial factor when selecting locations for large department stores. Basically, if a place has a population of less than 10,000 people, they wouldn’t choose to open a large department store there because low foot traffic means fewer customers.
However, Walmart is different from others; they adopted a strategy called “Rural Surrounding Urban” strategy. Even in small towns with less than 5,000 people, Walmart would open stores without hesitation. This is because these places are relatively remote, and the cost of land is lower. This aligns with Walmart’s philosophy of low prices and the strategy they implement in rural areas, which coincidentally aligns with their advantage of monopolizing the market without hesitation.
2. Equity Strategy
Walmart not only cares about customers and provides excellent service but also treats every employee well, adhering to the principle of “people-oriented.”
To achieve this goal, Sam Walton came up with a clever idea called the “Second Boss Program,” which essentially involves equity sharing. Sam Walton gave every manager the opportunity to invest and become a shareholder in the store, motivating them to wholeheartedly manage the stores they are responsible for.
Furthermore, Sam Walton devised Walmart’s collaborative strategy, emphasizing that no matter which branch you work in, you are a member of our big family. Any significant decision requires teamwork to accomplish. This spirit of collaboration is crucial at Walmart, where they work together and grow together.
3.Cost Strategy for Opening Stores in Different Locations
As the third-largest country in the United States, there are naturally areas with sparse populations. Rural residents usually prefer bulk purchases. Therefore, Walmart not only finds economically viable land in rural areas but also caters to the shopping habits of rural people by opening stores in these locations.
Walmart also chooses to open stores in areas thriving on the outskirts of cities, where an increase in population contributes to the overall rise in real estate values. This combination of rural and urban development not only promotes economic growth but also allows more people to enjoy the convenience of Walmart’s services.
4. Complete logistics distribution system
The reason why this retail giant has achieved such success is that they have established a complete system in the fields of business operations, financial management, and logistics and transportation to ensure that there are no omissions in these three key areas, thereby avoiding cascading failures.
Take 1966 as an example. At that time, the development of computers was still in chaos, but Walmart had already figured out how to use computers to effectively manage each branch. They cleverly combined computer technology with business and advanced the development of the entire department store retail industry by 10 years. These computer systems not only solve Walmart product inventory and management problems, but also include accounting systems and logistics distribution systems in the department store retail industry.
This enables the entire business to be run and managed efficiently, with comprehensive support. The establishment of this system laid a solid foundation for Walmart’s success.
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