WHAT I LEARNED FROM SAM WALTON How to Compete and Thrive in a Wal-Mart World By Michael Bergdahl Publisher: Wiley Publication Date: August 2004 Price: $24.95/hardcover ISBN: 0-471-67998-4 "Michael Bergdahl's book presents unique insights into the staggering international success of Wal-Mart." -- Tracy Mullin, President and CEO, National Retail Federation "This book offers clear and concise suggestions on what has been done by Wal-Mart and what couldŠbe done by all other retailers seeking to become alternative shopping experiences for the consumer." -- J.H. Campbell Jr., President/CEO, Associated Grocers, Inc., past chairman of the Board of Directors, National Grocers Association NEW BOOK BY FORMER WAL-MART INSIDER REVEALS WHAT MAKES THIS RETAILER GREAT AND SHOWS OTHERS HOW TO COMPETE IN A WAL-MART WORLD Named the most admired company by Fortune magazine in 2003 and 2004, with it's stock increasing in value by 300% over the past ten years, and with 1.3 million associates worldwide making it the largest employer on earth, there's no question that Wal-Mart is a major force in today's marketplace. Companies competing with this behemoth - and this means the vast majority of retailers, whether they sell tires or toys, books or groceries - need to understand what makes Wal-Mart powerful, and how they can survive the battle, and emerge stronger. In his new book, WHAT I LEARNED FROM SAM WALTON: How to Compete and Thrive in a Wal-Mart World (Wiley, August 2004), Michael Bergdahl draws on his own time at the company, as well as extensive research and experience in other businesses, to detail the secrets of Wal-Mart's strategies, and explain how other organizations - including those not in the retail sector - can improve their game by learning from their toughest competitor. "Don't try to compete with Wal-Mart on price," says Bergdahl - who served as a director under Sam Walton and who has also worked for such companies as Frito-Lay and American Eagle Outfitters. In the face of its massive purchasing power and ability to negotiate directly with manufacturers, Wal-Mart can always offer customers greater discounts than retailers who obtain their merchandise through wholesalers. Nonetheless, it is possible to flourish in a Wal-Mart world, insists Bergdahl in WHAT I LEARNED FROM SAM WALTON. The secret lies in developing a niche that is sufficiently distinct from the Wal-Mart product mix. He believes successful competitors must learn to adapt seven key strategies at which Wal-Mart excels. Bergdahl uses the acronym "P.O.C.K.E.T.S." to outline these seven tactics that will enable any company to "pick Wal-Mart's pockets." They are: Price - Bergdahl describes Wal-Mart's pricing strategy and makes clear that trying to compete with them on price is a mistake. He then offers specific techniques for success such as partnering with vendors to lower prices, advertising product guarantees and service, and broadening one's product mix. Operations - Wal-Mart has developed a number of operational strategies that give it a significant advantage. These include working with vendors on inventory replenishment, and a hub-and-spoke distribution system built on its own fleet of trucks. Although these tactics are probably too costly for smaller vendors, businesses can nonetheless strive for operational excellence - by designing floor plans for ease of customer navigation and developing aggressive reorder strategies to avoid being out-of-stock, among other practices. Culture - Bergdahl makes clear that at the heart of the Wal-Mart culture is the legacy of Sam Walton and his emphasis on integrity, hard work, and clear communication. But other businesses have their own rich history that can be conveyed to employees to build culture. Among Bergdahl's tips, based on Wal-Mart's strategies, are filling key openings from within to maintain continuity of culture; creating a reward system tied to productivity goals; and communicating the business' "brand story" to employees and customers alike. Key-Item/Product - Wal-Mart is committed to having all its employees - from accountants to information technology personnel - think like merchants. A similarly fervent focus on products is key for other retailers, as well. They must learn the art of displaying products effectively, work with customers to determine what products they want, be ready to drop products that aren't moving, and be willing to risk heavily stocking those products they really believe in. Expenses - Wal-Mart is obsessive about controlling costs, and with executives sharing hotel rooms and flying convoluted travel routes to save money, everyone in the organization models this kind of behavior. From managing schedules to eliminate overtime, to recycling everything possible, to rewarding cost-cutting ideas, Bergdahl offers many suggestions to help retailers cut expenses. Talent - With a voracious appetite for employees, Wal-Mart has developed many strategies for recruiting personnel. Bergdahl advises all companies to remain in a constant recruiting mode, casting their hiring net wide. He also advocates conducting exit interviews with all departing employees to better understand the reasons for turnover, and includes many strategies for increasing employee retention. Service - Beginning with the people greeters stationed at the door of every store, Wal-Mart seeks to offer added service value to every customer interaction. Never taking customers for granted is an important lesson to learn, and a key aspect of this involves training employees to interact responsively with customers. Each chapter of WHAT I LEARNED FROM SAM WALTON concludes with a checklist to help businesses apply the Wal-Mart success strategies within their own walls. Moreover, Bergdahl includes an extensive self-assessment test designed to enable companies to evaluate their ability to compete and survive against this retail giant. WHAT I LEARNED FROM SAM WALTON offers a unique and fascinating look at what makes Wal-Mart tick - from its culture to its day-to-day operations. With engaging first-hand stories and interviews with executives at leading organizations such as Sheetz Convenience Stores and the Missouri Grocers Association, Bergdahl reveals this retail powerhouse's best practices and principles and shows how they can be adapted in other organizations in all industries and market sectors. # # # ABOUT THE AUTHOR MICHAEL BERGDAHL has over twenty-five years of experience working in a variety of business environments, including three Fortune 500 companies. He has also been involved in two successful business turnarounds. His years of retailing experience with companies like Frito-Lay, Wal-Mart, and American Eagle Outfitters provided the "business laboratory" for him to fine-tune his understanding of business competition. His knowledge of Wal-Mart comes from firsthand experiences working at its home office - with Sam Walton himself.
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