Sam Walton: Disrupting an Industry
A retailor who was initially told that his idea for streamlining production, which would lead to lower prices for consumers was impossible and later founded Wal-Mart, the world’s largest company by revenue. His story exemplifies the advantages of capitalism.
Here is a full transcript of the video:
Sam Walton re-invented a fundamental part of the American economy… how we buy. Born on an Oklahoma farm, he was a child of The Great Depression and knew what it meant to struggle. By the 1950s he had worked his way up to franchising Ben Franklin variety stores in places like Bentonville, Arkansas. Sam always had a strong connection with his customers. He thought a lot about all the under served customers across rural America. A much larger market than his variety stores could ever reach. What did they need?
Easier access to goods. Prices they could afford. But that was impossible with the rules of retail. What if he broke the rules? Disrupt the supply chain. Cut out the middle men. Buy in enough bulk to dictate pricing. Discount merchandise. Pass on the savings to the consumer. More sales. Bigger stores. In more places across America.
Sam brought these ideas to the Ben Franklin franchising executives. They laughed him out of the room. So, he decided he would do it himself. Sam opened the doors to his first Wal-Mart discount city store in Rogers, Arkansas in July of 1962. Customers flocked to his first store. And to all the stores that followed. But Sam kept innovating. Distribution to rural stores was costly and unreliable so he started his own trucking system.
He insisted major purchasing decisions not be made by executives at headquarters but by store managers closest to the consumers. Sam never lost his close connection with the customers. He went as far as learning to pilot his own twin-engine Cessna just so he could personally visit as many as 6 stores in a single day, keeping his finger on the pulse of small-town America.
Sam Walton expanded his business and inspired his employees through one simple refrain. “Help customers. Cut costs. Share profits.” And now, Walmart is the world’s largest company by revenue.
Sam Walton saw an opportunity and charted an independent course that would forever change the way we buy.