Ideas on how to become rich - How to become a billionaire, part 3

Ideas on how to become rich - How to become a billionaire, part 3

Case study of Wal-Mart - also known as Walmart

and

Case study of entrepreneur and billionaire Sam Walton

A brief history of Walmart and its founder, entrepreneur Sam Walton, current as at 2007/2008, thanks to Wikipedia as well as newspaper reports:

Sam Walton, a businessman/entrepreneur from Arkansas, began his retail career when he started work on June 3, 1940, at a J.C. Penney store in Des Moines, Iowa where he remained for 18 months. In 1945, he met Butler Brothers, a regional retailer that owned a chain of stores called Ben Franklin and that offered him one in Newport, Arkansas.

Walton could neither come to agreement on the existing store's lease renewal nor find a new location in Newport. Instead, the intrepid entrepreneur opened a new Ben Franklin franchise in Bentonville, Arkansas, but called it "Walton's Five and Dime." There this powerful entrepreneur achieved higher sales volume by marking up slightly less than most competitors.

On July 2, 1962, Walton opened the first Wal-Mart Discount City store. Within five years, the company expanded to 24 stores across Arkansas and reached $12.6 million in sales. In 1968, it opened its first stores outside Arkansas.

The company was incorporated as Wal-Mart Stores, Inc. on October 31, 1969. In 1970, it opened its home office and first distribution centre in Bentonville, Arkansas. It had 38 stores operating with 1,500 employees and sales of $44.2 million. It began trading stock as a publicly-held company on October 1, 1972, and was soon listed on the New York Stock Exchange. The first stock split occurred in May 1971 at a market price of $47. By this time, Wal-Mart was operating in five states: Arkansas, Kansas, Louisiana, Missouri, and Oklahoma; it entered Tennessee in 1973 and Kentucky and Mississippi in 1974.

During the 1980s, Wal-Mart continued to grow rapidly, and by its 25th anniversary in 1987 there were 1,198 stores with sales of $15.9 billion and 200,000 associates. In 1988, Sam Walton stepped down as CEO and was replaced by David Glass. Walton remained as Chairman of the Board, and the company also rearranged key personnel in senior positions.

Sam Walton may have stepped down, but Wal-Mart went on and on. Apparently from strength to strength, making more and more money and exapanding and expanding!

In 1988, the first Wal-Mart Supercenter opened in Washington, Missouri. Thanks to its superstores, it surpassed Toys "R" Us in toy sales in the late 1990s. The company also opened overseas stores, entering South America in 1995 with stores in Argentina and Brazil; and Europe in 1999, buying ASDA in the UK for $10 billion.

In 1998, Wal-Mart entered the grocery business, introducing the "Neighbourhood Market" concept with three stores in Arkansas. In 2000, H. Lee Scott became President and CEO, and Wal-Mart's sales increased to $165 billion. In 2002, it was listed for the first time as America's largest corporation on the Fortune 500 list.

In 2005, Wal-Mart had $312.4 billion in sales, more than 6,200 facilities around the world—including 3,800 stores in the United States and 2,800 elsewhere, employing more than 1.6 million "associates" worldwide.

In October 2005, Wal-Mart announced it would implement several environmental measures to increase energy efficiency. The primary goals included spending $500 million a year to increase fuel efficiency in Wal-Mart’s truck fleet by 25% over three years and double it within ten, reduce greenhouse gas emissions by 20% in seven years, reduce energy use at stores by 30%, and cut solid waste from U.S. stores and Sam’s Clubs by 25% in three years. CEO Lee Scott said that Wal-Mart's goal was to be a "good steward for the environment" and ultimately use only renewable energy sources and produce zero waste. Despite much criticism of its environmental record, Wal-Mart took a few steps in a positive direction, which included becoming the biggest seller of organic milk and the biggest buyer of organic cotton in the world, as well as reducing packaging and energy costs. Wal-Mart also spent nearly a year working with outside consultants to discover the company's total environmental impact and find where they could improve. They discovered, for example, that by eliminating excess packaging on their toy line Kid Connection, they could save $2.4 million a year in shipping costs, 3,800 trees, and a million barrels of oil.

In March 2006, Wal-Mart sought to appeal to a more affluent demographic. The company launched a new supercenter concept in Plano, Texas, intended to compete against stores seen as more upscale and appealing, such as Target. The new store has wood floors, wider aisles, a sushi bar, a coffee/sandwich shop with free Wi-Fi Internet access, and more expensive beers, wines, electronics, and other goods. The exterior has a green background behind the Wal-Mart letters, similar to Wal-Mart Neighborhood Markets, instead of the blue previously used at supercenters.


This brief history of Walmart already teaches us key lessons on how to become billionaires and how to become rich. Look at the key steps that Sam Walton and his future entrepreneurial successors did (the key points of the historical case study that I made out in bold, because those were the key learning points and key learning ideas of how to become a billionaire and to build a billion-dollar company):

Sam Walton achieved higher sales volume by marking up slightly less than most of his competitors - simple but effective initial idea

Walmart began trading stock as a publicly-held company on October 1, 1972, and was soon listed on the New York Stock Exchange - listing the company was one of the key steps on the way to financial success

Wal-Mart continued to grow rapidly and continued to expand, expand, expand - this was one of the critical factors in making the company billions of dollars

The company also opened overseas stores - therefore it is clear that overseas expansion and internationalisation or international trade is key and very important in building a billion dollar enterprise

Wal-Mart announced it would implement several environmental measures to increase energy efficiency - that was both cost effective and environmentally minded - and thus killed two birds with one stone, metaphorically, on the road to success and billions of dollars, to use an extended mixed metaphor

Wal-Mart sought to appeal to a more affluent demographic - one of the key ideas of becoming rich is to appeal to people who have the money, who make money and are willing to spend money - this was not a key step in the building of a billion dollar business, because the business was already successful appealing to a less wealthy crowd from the beginning though - nonetheless, even though Sam Walton made his billions and became a billlionaire but appealing to the masses and selling at low margins, it is undeniable that appealing to people who possess the money is important in becoming rich.


This case study you have been reading here on my ideas site was on Sam Walton, and Wal-Mart/ Walmart. Thanks for reading this case study on how to become a billionaire, and there will be other posts to come on this topic. Stay here, thank you very much! Cheers.

Ideas on how to become rich!