In the 8th chapter of the book “The Wal-Mart Way” (Nelson Business, 2004), the author illustrated the technology innovation spirit of Wal-Mart. He recalled in the very beginning of the story of Wal-Mart, Sam Walton, the founder, intended to let the computer and database show their power in business. Moreover, the author also showed some important technology advancements made by Wal-Mart.
In the core part of this chapter, the author demonstrated several principles of an ideal technology model of a company. I shook my head on reading the first principle: “senior leadership involvement and support.” In my opinion, innovation often means break the former way. Therefore it may be difficult for people, especially senior officers to understand a new conception as well as how to put it into practice. If they are responsible for a technology department, they will be confused about all the new things! However, once the technicians can illustrate the usage to the seniors, they can embrace the conception and combine it to their business experiences. In this way, every innovation will be practical in real business. Thus, I would like to rename this principle as a “senior-technician association” mode.
On the other hand, I was shocked by the consistent technology improvement of Wal-Mart. As the author noted, it was one of the first retail companies to accept “point-of-sale (POS)” and “Universal Product Code (UPC)” (2004, p143). These technologies were extremely expensive at that period. The author also claimed Wal-Mart began to use satellite network in 1987, to connect its world-wide stores together and share their data. From my standpoint, if I was the CEO of Wal-Mart, I would worry about the tremendous initial investment to introduce these new promotions to my business. However, as a customer, I would feel happy if I could enjoy the accurate service provided by UPC system as well as the convenience to use credit card at POS. In this way, these convincible examples strongly supported the author’s thesis and described an image of a technology pioneer in the retail industry.
Thursday, August 2, 2007
Wednesday, August 1, 2007
Reading review #4: Technology of Wal-Mart
In the 8th and 9th chapters of “The Wal-Mart Way” (Nelson Business, 2004) written by the former chairman of Wal-Mart, Soderquist, the author focused on the technology aspects that made great contribution to the powerful Wal-Mart.
In the beginning of chapter 8, the author claimed that advanced technology could bring great innovations to retail stores in many ways. In Soder’s opinion, Introducing new inventions such as computers and databases to the store could provide faster and more accurate service as well as cut down the cost. He also recalled the early story of Wal-Mart to enhance its technology. The former chairman believed there are 4 key points to let the company take most advantage of up-to-date innovations: “senior leadership and support; selection of the right person to lead the technology department; investment in the right projects; a method of determining actual payback.” (p138). At last, the author mentioned some important innovations brought by Wal-Mart, which influenced the whole world’s retail mode.
In chapter 9, Soder introduced some basic principles of Wal-Mart’s supply chain. He argued that the supply chain is not just rigid logistics, but could be improved in some significant ways. Then Soder claimed that Wal-Mart always build up new stores at the perfect position, which were supported efficiently by nearby warehouses. In this way, Wal-Mart could keep its stores in stock and lessen the money invested in inventory at the same time.
In the beginning of chapter 8, the author claimed that advanced technology could bring great innovations to retail stores in many ways. In Soder’s opinion, Introducing new inventions such as computers and databases to the store could provide faster and more accurate service as well as cut down the cost. He also recalled the early story of Wal-Mart to enhance its technology. The former chairman believed there are 4 key points to let the company take most advantage of up-to-date innovations: “senior leadership and support; selection of the right person to lead the technology department; investment in the right projects; a method of determining actual payback.” (p138). At last, the author mentioned some important innovations brought by Wal-Mart, which influenced the whole world’s retail mode.
In chapter 9, Soder introduced some basic principles of Wal-Mart’s supply chain. He argued that the supply chain is not just rigid logistics, but could be improved in some significant ways. Then Soder claimed that Wal-Mart always build up new stores at the perfect position, which were supported efficiently by nearby warehouses. In this way, Wal-Mart could keep its stores in stock and lessen the money invested in inventory at the same time.
Sunday, July 29, 2007
Critique of “The Wal-Mart Way” #1
On reading the 5th chapter of the book “The Wal-Mart Way” (Nelson Business, 2004), I got a deep impression of the Wal-Mart’s attitude towards customers. The writer claimed that the motto of Wal-Mart is finding lower prices of different items. In this way, Wal-Mart could improve people’s life qualities. The author especially claimed that the pricing principle of Wal-Mart is “to sell as low as we can, not as high as we can”. This statement showed a generous image of the giant in retail industry. But is it true?
At my stand point, if this statement was true, Wal-Mart would be contradict with two basic principles in business area. For one thing, it is obviously impossible to maintain low prices without low costs. Although by reforming stores’ structure can Wal-Mart cut its costs, the key point to provide lower prices is to find more competitive suppliers. As the author noted, their associates did all they can to find a lower supplier. But that will evoke the suppliers to fight for lower costs of themselves. Therefore the workers of Wal-Mart’s suppliers may suffer due to this policy.
My second doubt about this policy is about the rights of Wal-Mart’s shareholders. Although for a long time the price of Wal-Mart’s stock has being striking the skyline, but the shareholders may need more. In this book the author estimated the sale scale of Wal-Mart. Based on his statistic we can assume that if the market can bear a one dollar price rise in every item, that will make billions of dollars profit for those Wal-Mart shareholders.
At my stand point, if this statement was true, Wal-Mart would be contradict with two basic principles in business area. For one thing, it is obviously impossible to maintain low prices without low costs. Although by reforming stores’ structure can Wal-Mart cut its costs, the key point to provide lower prices is to find more competitive suppliers. As the author noted, their associates did all they can to find a lower supplier. But that will evoke the suppliers to fight for lower costs of themselves. Therefore the workers of Wal-Mart’s suppliers may suffer due to this policy.
My second doubt about this policy is about the rights of Wal-Mart’s shareholders. Although for a long time the price of Wal-Mart’s stock has being striking the skyline, but the shareholders may need more. In this book the author estimated the sale scale of Wal-Mart. Based on his statistic we can assume that if the market can bear a one dollar price rise in every item, that will make billions of dollars profit for those Wal-Mart shareholders.
Book Review #3—The customer is the boss
In the 5th chapter of “The Wal-Mart Way” (Nelson Business, 2004) written by the former chairman of Wal-Mart, Soderquist, the author illustrated many details about Wal-Mart’s attitude towards customers, and how people in Wal-Mart made it possible for providing better services.
In the first part of this chapter, Soder emphasized on Wal-Mart’s merchandising strategy founded in the very beginning of Wal-Mart’s business. In Soder’s opinion, as they served for so many people, it would be proper for them to stay away from luxury merchandise. Instead, the author explained those “store-brand” or “private-label” (p86) goods are preferable.
Then, to illustrate how Wal-Mart reached customers need, the former vice chairman demonstrated some key points of great significance on marketing. For example, it was extremely important for Wal-Marters to keep markets’ stock on every item. Also, Wal-Mart associates did many researches to find a perfect price to every item, as the author said.
At last, Soder showed Wal-Mart’s participation in public services, especially when there was a disaster in the neighborhood. After a strike, as the author noted, the worker did their best to rebuild and clean up Wal-Mart store, reopened it in a very short time to provide daily goods to local people. What’s more, Soder even mentioned Wal-Mart cut down those badly needed goods after negotiation with its suppliers, to respond to the decrease of local people’s property.
In the first part of this chapter, Soder emphasized on Wal-Mart’s merchandising strategy founded in the very beginning of Wal-Mart’s business. In Soder’s opinion, as they served for so many people, it would be proper for them to stay away from luxury merchandise. Instead, the author explained those “store-brand” or “private-label” (p86) goods are preferable.
Then, to illustrate how Wal-Mart reached customers need, the former vice chairman demonstrated some key points of great significance on marketing. For example, it was extremely important for Wal-Marters to keep markets’ stock on every item. Also, Wal-Mart associates did many researches to find a perfect price to every item, as the author said.
At last, Soder showed Wal-Mart’s participation in public services, especially when there was a disaster in the neighborhood. After a strike, as the author noted, the worker did their best to rebuild and clean up Wal-Mart store, reopened it in a very short time to provide daily goods to local people. What’s more, Soder even mentioned Wal-Mart cut down those badly needed goods after negotiation with its suppliers, to respond to the decrease of local people’s property.
Sunday, July 22, 2007
Reading review #2: Culture of Wal-Mart
In Chapter 3 of "The Wal-Mart Way", Don Soderquist demonstrated the dominant culture of Wal-Mart. He believed that it was these widely embraced believes that made the company keep up its revenue as well as unity over the past 40 years.
In Soder's opinion, the most precious belief was the "Can-Do" attitude. However great the challenges were, people in Wal-Mart saw them as opportunities to improve their stores and services. Because of this common belief, Wal-Mart didn't descend after Walton, the founder, passed away in 1992. Instead, as the author stated, it continued opening new stores and making great profits.
Then the author concluded the three core values which guided Wal-Mart during these years:
1. We treat everyone with respect and dignity.
2. We are in business to satisfy our customers, and
3. We strive for excellence in all that we do.
The 1st rule showed people of Wal-Mart respected not only customers, but their peers and colleagues in routine works. Soder claimed that there is no "employees" in Wal-Mart. Everyone was the owner and take charge of their company.
The author saw the 2nd value as the key point that made customers do shopping in Wal-Mart again and again. They were warm welcomed, and could get the lowest price because of Wal-Marters' hard-work.
Wal-Mart has made many innovations to retail business due to the 3rd value. As the former vice chairman noted, all Wal-Marters always insisted on finding new methods to develop the sales model, to lower the prices, and to build up more efficient ways to serve customers.
It is obviously that almost every company has a motto or core value. But Soder insisted that people would forget about their companies’ value gradually in the routine work. He believed only by letting the associates embrace the values in their works and activities could the mottoes be widely understood. In Wal-Mart, people held Saturday Meetings to broadcast the common values to their new comers as well as present colleagues. In Soder’s opinion, the pattern of the meeting was vivid, including weekly sales reports, ceremonies to honor the senior workers, and workshops by some famous people such as Warren Buffet. At last, the author also introduced "the Wal-Mart cheers", which would stimulate Wal-Marters to work hard.
In Soder's opinion, the most precious belief was the "Can-Do" attitude. However great the challenges were, people in Wal-Mart saw them as opportunities to improve their stores and services. Because of this common belief, Wal-Mart didn't descend after Walton, the founder, passed away in 1992. Instead, as the author stated, it continued opening new stores and making great profits.
Then the author concluded the three core values which guided Wal-Mart during these years:
1. We treat everyone with respect and dignity.
2. We are in business to satisfy our customers, and
3. We strive for excellence in all that we do.
The 1st rule showed people of Wal-Mart respected not only customers, but their peers and colleagues in routine works. Soder claimed that there is no "employees" in Wal-Mart. Everyone was the owner and take charge of their company.
The author saw the 2nd value as the key point that made customers do shopping in Wal-Mart again and again. They were warm welcomed, and could get the lowest price because of Wal-Marters' hard-work.
Wal-Mart has made many innovations to retail business due to the 3rd value. As the former vice chairman noted, all Wal-Marters always insisted on finding new methods to develop the sales model, to lower the prices, and to build up more efficient ways to serve customers.
It is obviously that almost every company has a motto or core value. But Soder insisted that people would forget about their companies’ value gradually in the routine work. He believed only by letting the associates embrace the values in their works and activities could the mottoes be widely understood. In Wal-Mart, people held Saturday Meetings to broadcast the common values to their new comers as well as present colleagues. In Soder’s opinion, the pattern of the meeting was vivid, including weekly sales reports, ceremonies to honor the senior workers, and workshops by some famous people such as Warren Buffet. At last, the author also introduced "the Wal-Mart cheers", which would stimulate Wal-Marters to work hard.
Sunday, July 15, 2007
Reading review #1: History and vision of Wal-Mart
To make my reading more related to the topic of my research, I switched the non-fiction book to "The Wal-Mart Way" (Don Soderquist, published by Thomas Nelson Inc. 2004). The author of the book was a senior vice chairman of the corporation in Wal-Mart, with more than 25 years’ career. In this way, he had been seeing the blossom of the enormous retail empire. In this book, he looked back of the history of the company, and explained Wal-Mart's core value related to its incredible success in profit and expansion. Today I finished reading the first 2 chapters which illustrated the history of Wal-Mart.
In the first chapter, the former senior vice chairman of Wal-Mart told a brief history of Wal-Mart. As everybody knows, Wal-Mart was founded by Sam Walton in 1962. But at that time, as Don pointed out, Wal-Mart was just a single store in Rogers, Arkansas. After several years of strive, Wal-Mart became a regional chain company of 15 stores, the largest customer of their supplier, Ben Franklin's, Don wrote. Then, in 1969, Sam believed that he won't get what he desired from Ben Franklin's company, so he decided to build up his own business network without any intermediate suppliers. Don described Sam's endeavor with admiration: "It was a big risk, it took a lot of courage and openness to change… Little by little, the dream would grow one successful Wal-Mart at a time."(p4). Soon Wal-Mart stepped into its booming era. As Don illustrated, from 1971 to 2004, the total revenue of Wal-Mart increased from $30.8 million to $256.3 billion.
The name of the second chapter is "Vision". Don claimed with proud that Wal-Mart was a pioneer in the innovation to new business models. Sam was always prepared to see things beforehand. Wal-Mart introduced brand new conceptions such as membership club, "Supercenter (A supermarket with a number of service shops outside)" and "Neighborhood Market (A small store in the community which does good to customers who need fast service)" to the retail business area. All these way, as Don pointed out, made Wal-Mart become the wealthiest company of the world as well as a great innovator to find methods to cater for the customers' need.
In the first chapter, the former senior vice chairman of Wal-Mart told a brief history of Wal-Mart. As everybody knows, Wal-Mart was founded by Sam Walton in 1962. But at that time, as Don pointed out, Wal-Mart was just a single store in Rogers, Arkansas. After several years of strive, Wal-Mart became a regional chain company of 15 stores, the largest customer of their supplier, Ben Franklin's, Don wrote. Then, in 1969, Sam believed that he won't get what he desired from Ben Franklin's company, so he decided to build up his own business network without any intermediate suppliers. Don described Sam's endeavor with admiration: "It was a big risk, it took a lot of courage and openness to change… Little by little, the dream would grow one successful Wal-Mart at a time."(p4). Soon Wal-Mart stepped into its booming era. As Don illustrated, from 1971 to 2004, the total revenue of Wal-Mart increased from $30.8 million to $256.3 billion.
The name of the second chapter is "Vision". Don claimed with proud that Wal-Mart was a pioneer in the innovation to new business models. Sam was always prepared to see things beforehand. Wal-Mart introduced brand new conceptions such as membership club, "Supercenter (A supermarket with a number of service shops outside)" and "Neighborhood Market (A small store in the community which does good to customers who need fast service)" to the retail business area. All these way, as Don pointed out, made Wal-Mart become the wealthiest company of the world as well as a great innovator to find methods to cater for the customers' need.
Summary Ex.1--"It’s Swedish for Invincible"
After investigating the miracle of IKEA, L. George wrote the article “It’s Swedish for Invincible”(Macleans, 14th Aug, 2006, p33) to demonstrate the successful keys of IKEA.
On observing the reputation IKEA got all over the world, George concluded that “IKEA is not so much a furniture store as it is an economic and cultural phenomenon”(p33). This meant IKEA not only succeeded in making profit, but also in spreading cultural influences.
As George noted, the unique shopping environment made people feel friendly. People could test and feel the merchandise without worrying about the interruption of sales staffs. What’s more attractive, The arrangement of the structure of the store was carefully designed, which offered customers to immerse themselves into the Scandinavian’s food and culture. All of these, as George indicated, made shopping in IKEA an incredible joyful experience.
But IKEA didn’t get its reputation just because of culture. According to the author, IKEA got a high grade on account sheets. Its international sales “topped US$18.3 billion, up 17 percent over 2004” (p34). The secret lied in the business principle of IKEA. It consist of resistance towards luxury, uniqueness in merchandise, as well as the DIY spirit which coincide with the instincts of man, according to the author’s statement. Based on these characteristics, IKEA was so attractive that people became its “Tokigs(Swedish for fans)” (p34). In George’s opinion, this made it possible for IKEA to open stores outside big cities, which could save a lot of money. All these things came together and made the incredible increase of IKEA’s profit.
According to George, the IKEA philosophy made the most contribution to its success. He indicated that Kamprad’s (the founder of IKEA) instinct to save money influenced IKEA’s way to do business. Then the “stringent economy” principle came into the blood of IKEA and helped it to maximize profit. In addition, as George claimed, IKEA was not so blamed by the protestors of Globalization, because IKEA was a “democratic and people’s furniture company”. At last, the author argued that there seemed to be some contradictions lied between IKEA’s principle and its real deed, which was tolerable for those IKEA fans.
At last, it is previous that George had done a thorough survey about IKEA’s history, business mode and cultures. Based on enough evidence, he predicted that IKEA “may well be the perfect 21st-century brand” (p34).
On observing the reputation IKEA got all over the world, George concluded that “IKEA is not so much a furniture store as it is an economic and cultural phenomenon”(p33). This meant IKEA not only succeeded in making profit, but also in spreading cultural influences.
As George noted, the unique shopping environment made people feel friendly. People could test and feel the merchandise without worrying about the interruption of sales staffs. What’s more attractive, The arrangement of the structure of the store was carefully designed, which offered customers to immerse themselves into the Scandinavian’s food and culture. All of these, as George indicated, made shopping in IKEA an incredible joyful experience.
But IKEA didn’t get its reputation just because of culture. According to the author, IKEA got a high grade on account sheets. Its international sales “topped US$18.3 billion, up 17 percent over 2004” (p34). The secret lied in the business principle of IKEA. It consist of resistance towards luxury, uniqueness in merchandise, as well as the DIY spirit which coincide with the instincts of man, according to the author’s statement. Based on these characteristics, IKEA was so attractive that people became its “Tokigs(Swedish for fans)” (p34). In George’s opinion, this made it possible for IKEA to open stores outside big cities, which could save a lot of money. All these things came together and made the incredible increase of IKEA’s profit.
According to George, the IKEA philosophy made the most contribution to its success. He indicated that Kamprad’s (the founder of IKEA) instinct to save money influenced IKEA’s way to do business. Then the “stringent economy” principle came into the blood of IKEA and helped it to maximize profit. In addition, as George claimed, IKEA was not so blamed by the protestors of Globalization, because IKEA was a “democratic and people’s furniture company”. At last, the author argued that there seemed to be some contradictions lied between IKEA’s principle and its real deed, which was tolerable for those IKEA fans.
At last, it is previous that George had done a thorough survey about IKEA’s history, business mode and cultures. Based on enough evidence, he predicted that IKEA “may well be the perfect 21st-century brand” (p34).
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