The 2014 Fortune 500 list places Walmart at the top, with US $ 485.7 bill in revenue. This is for the third straight year and 11th time overall. The second position holder Exxon Mobile is far behind with a gap of more than US $ 100 bill in revenue. If Walmart were to belong to a category of nations, it would have assumed 28th world rank in terms of GDP, ahead of Austria and just behind Norway.
With 11000+ stores spread across 27 countries, Walmart employs 2.2 mill ‘associates’ (as employees are called at the company), being the third largest employer in the world after US Defense and Chinese Army. Bananas is the number one selling item at Walmart, with more than 1 bill lbs sold every year. All these make Walmart indeed supersize!
The combine of colossal Chinese manufacturing machine and enormous retail spread of Walmart did contribute towards making American Society ‘Consumption Inclusive’, and thereby benefiting millions of ‘border line’ American consumers. The catch slogan of Walmart ‘Everyday Lower Price! ‘ was followed in letter and spirit to attain the mega status in less than 50 years unparalleled in the retail business history of the world.
The story of this giant retailer is well documented. The earliest, and perhaps the most insightful so far, is the autobiographical account by legendary Sam Walton, the Father of Walmart, titled ‘Made in America’. This book is a firsthand description of his entrepreneurial expedition from a modest beginning. It captures the amazing, awe-inspiring and unbelievable aspects covering the origin and spectacular rise of Walmart. It is capable of being a text book to understand entrepreneurial mind-set and learn about scale-neutral entrepreneurship. Don’t miss to read the chapter titled ‘ Swimming Upstream ‘ in the book.
Walmart represents a classic example of operating from a small place called Bentonville in Arkansas State of America. The heroic cost containment, managing size and scale, negotiating purchase, distribution logistics, large scale employment and much more are the invaluable management lessons available from this story. Continuous and ruthless drive to control cost, and thus transfer the benefit to the customer, through a variety of innovative initiatives reassures us about the power of human mind which, when provided the required free play to unleash its capability, can transform living and life. No wonder, the Jumbo e-tailer Amazon derived huge benefit from their interactions with Walmart as also hiring proven talent from Walmart.
Walmart does have its share of challenges. The online retailers of Amazon kind are creating tough competition for Walmart. Its growth and expansion has considerably slowed down in recent years. The company is facing criticism for its employment practices and wage levels. Many of 11000 stores of Walmart require better upkeep and superior and varied stock levels.
The new CEO McMillon, a 20 year veteran at Walmart, is responding to these challenges in a variety of ways including technology harnessing, creating a hybrid ‘offline-online’ model, implementing wage revision, restructuring and higher customer sensitivity. Observers are following the outcome with interest.
But what are of importance are the lessons derivable from origin and journey of Walmart. No entrepreneur worth her/his salt can afford to ignore these pioneering, bold, innovative and largeness-driven entrepreneurial steps.
Read ‘Made in America’. I assure that you will emerge a wiser entrepreneur!