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THE GOAL OF LIVING LONGER WITHOUT PAIN OR DISEASE, AND THE GOLD MINE OF THE WELLNESS PROGRAM INDUSTRY

Most Company’s Health Wellness Programs – fail to save any money

In an attempt to reduce the skyrocketing costs of health care, many companies have employee wellness programs. On average, employees spend about 6 K while companies spend about $16,000 per employee on health care. The attempt at cost-saving has not shown any success in saving money and has not proven effective in better health.

Over 80%  of large employers have a wellness program that may include free screenings of BMI, cholesterol, blood pressure, and other health indicators. There are various incentives to stay healthy, from subsidized health classes to insurance discounts to cash payouts for meeting specific goals, such as quitting smoking. 

Research has shown that preventing cardiovascular disease or other chronic diseases is the best way to save costs. Therefore companies thought that taking the preventive role some of these programs offer could help them pocket some of those savings.

Sadly, companies aren’t getting much bang for their buck with these wellness programs. This has become a $50 billion industry, and the marketing for these programs is prolific. The market is so good that 66% of those companies want to expand their wellness programs, even though very few firms have not seen any savings over the past decades.

Wellness programs do not work for various reasons, but behavioral economics is the main reason. People are more likely to stay the course when they receive an immediate reward for staying the course when the goals are abstract and distant, such as lowering cholesterol. 

Despite some minor evidence that wellness programs work in some cases, randomized trials found no difference in:

  • Health outcomes 
  • Cost savings 
  • Reduced absenteeism

Even though wellness programs sound like they should work – if we give you a little nudge, maybe you’ll take better care of yourself – the data does not support it.

The employees who benefit the most from wellness programs are already those in good health. No evidence suggests that healthy people are more likely to increase their healthy behaviors when participating in a wellness program. They exercise regularly and see their doctor, so getting a gym voucher just rewards what they are already doing. To receive the program’s benefits, they register.

It is when we talk to people who aren’t engaged with their health that they see these incentives and they want to act, but their lives are so complicated  many lower-income workers have some comorbidities; this is such an enormous cognitive burden that adding more routines is difficult.”

The goal of living longer without pain or disease is valuable to most people. Although wellness programs are well intended, they aren’t working.

The idea that these side benefits would alter the calculations for these people is just completely illogical. There is a fundamental point here: these programs redistribute incentives from the unhealthy to the healthy, but neither group changes its behavior.

Do wellness programs help you save money?

For more Healthy Money Tips Listen to our PodCast “Money 911”

Meet with Kris Miller – Financial Fitness Strategy Sessions

https://healthymoneyhappylife.com/

Kris@HealthyMoneyHappyLIfe.com

(951) 926-4158

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Case Studies Culture Leadership Marketing Personal Development Skills Technology Women In Business

Women Supporting Women

Did you know it’s National Women’s History Month? As a female business owner and entrepreneur, I’d like to say THANK YOU to all those who came before me and paved the way. Sometimes, being a strong powerful woman can feel very isolating. We all know the irreplaceable value of a strong, inclusive, loving support group. From childhood to parenthood, small networks of family, friends, neighbors, coworkers, and classmates give us a sense of belonging, protection, and camaraderie.

Support feeds the soul.

Getting the right support is crucial. Whether your kid won’t stop yelling your name or your coworker is clicking their pen incessantly, there are times when you’re frustrated and stressed out. All you want is the sympathetic voice of a friend who knows what you’re going through (and maybe a glass of wine).

You may have been disconnected from your usual support systems in recent seasons of life. I’ve discovered that a great podcast can help rebuild a sense of community. Listening to a wonderful podcast host feels a bit like a conversation with a wise and empathetic friend.

I’ve had the honor of collaborating with several incredible podcasts within the Conscious Parenting Revolution platform. If you’d like a little female camaraderie and support, I encourage you to listen (and subscribe!) to these fantastic shows.

THE SENSORY PROJECT SHOW

Rachel Harrington and Jessica Hill are certified occupational therapy assistants whose mission is to help families practice health and wellness in their daily lives. They’re light-hearted, funny, intelligent women with a fresh perspective on healthy family dynamics. Listen to my episode with Rachel and Jessica here.

THE BLENDED FAMILY PODCAST

Melissa Brown addresses the challenges of having an extended and blended home life with personal stories based on her own family. She tackles difficult topics like having a healthy divorce, managing relationships between non-biological siblings, and “time sharing” with an ex. Her episodes aim to help blended families not only co-exist, but thrive. Listen to my episode with Melissa here.

DISTRACTION PODCAST

In our world full of bright, shiny objects, we all need some advice on managing distractions. Dr. Ned Hallowell, a New York Times best-selling author and ADHD expert, lends his expertise on minimizing distractions in your daily life. His bright, enthusiastic show offers practical advice and shows how issues like ADHD can transform into strengths. Listen to my episode with Dr. Ned here.

THE MODERN MAMAS PODCAST

Jess Gaertner and Laura Bruner embody modern motherhood: Laura is a certified nutrition consultant, Jess is a licensed athletic trainer with a master’s degree in kinesthesiology, both are CrossFit trainers, and mamas to their babies—whew! They interview guests about fertility, pregnancy, parenting, fitness, and holistic health and spirituality. This duo is a blast to listen to! Listen to my episode with Jess and Laura here.

EXPERT TALK WITH TGO

A direct connection into the world of “Trailblazers” who openly share their journeys to success. From step-by-step tips on building their businesses to how they overcame insurmountable odds and turned their dreams into realities. Tune in to our International Women’s Day LIVE Event March 8th!

LAW OF ATTRACTION WITH NATASHA GRAZIANO

Bringing you the latest wisdom and neuroscience on how to manifest your goals in life and create abundance in wealth, love, health, relationships. She is the creator of the world renowned meditational behavioral synchronicity (MBS) method. By listening to this podcast, you will learn how to refocus your mindset and thought processes with practical and mindful exercises that you can begin right here, right now, simply by pressing play. Listen to my podcast episode here.

 

Which episode was your favorite? Hit reply and let me know!

Love and blessings,

Katherine

P.S. I am thrilled to be part of the 3rd Annual International Women’s Day Marathon!! An event featuring over 25 live interviews hosted by my good friend, TGo, showcasing successful women from small business entrepreneurs to trailblazers from around the world. On March 8, 2023, from 9-5pm PT, you can watch this event for FREE, streamed live from the comfort of your own home. You will have the opportunity to hear from remarkable women who have made a significant impact in their respective fields, inspiring and empowering you to achieve your own goals. This inspiring event is made possible by NOW – the Network Of Outstanding Women, and is sponsored in part by PodNation TV and JD3TV networks. I can’t wait to share with you! iwdm.live

 

Categories
Case Studies Economics Investing Money

WATCH: Blackrock CEO’s Huge Crypto News for 2023!

BlackRock is the largest asset management company in the world with $10 Trillion in assets under management.

Recently BlackRock’s CEO, Larry Fink, explains (in detail) how there’s a complete reset in the global economy.

He discusses the effects of high inflation due to the European war, along with the inflation of the US dollar, but also predicts inflation (particularly US inflation) will decline rapidly.

In a recent interview, Fink rolls out Blackrock’s long term investment strategy that includes a surprisingly heavy bull position on crypto despite the current collapse of the decentralized token market due to the downfall of FTX.

Check out the full interview below…

WATCH:

Categories
Biography and History Branding Case Studies Marketing Operations Strategy

WATCH: The Real Reason the Long John Silver’s Business is Sinking…

Long John Silver’s is the #1 fast food seafood restaurant in the United States.

But, they’ve been struggling for decades. Long John Silver’s has lost over half their franchises since their peak.  Here’s why…

 

 

 

The Real Reason Long John Silver’s is Struggling:

The original premise for the chain sounded good, at least on paper. During a family, vacation, businessman and restaurateur, Jim Patterson had a flash of inspiration:

Bring the sunny seaside fish and chips eating beach experience from the coast, to families nationwide.

When the chain first started, Long John Silver’s made an effort to impart each location with a seafaring theme reminiscent of the company’s vacation-inspired roots.

The company’s heyday was a ten-year period from about 1979 to 1989, during which it grew from a footprint of one thousand units to an all-time high of 1,500 locations.

Watch the full story on this episode of Company Man.

 

WATCH:

 

Then a String of Devastating Decline in Market share…

The chain has been on a decline since at least 1989 when, in response to mounting debt, it first took its business private. In the three decades since, it’s been handed off from one unhappy owner to another.

They’ve also been plagued with bad marketing (often self-inflicted).

For example, in 2017 they’re marketing team posted a video of a hostage being beheaded with a swordfish in an attempt to “go viral”…

 

 

They were forced to issue an apology:

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On top of some marketing flops, probably the biggest failure is their lack of vision against the original mission to bring people into a coastal dinner experience.

 

Long John Silver's

You know that feeling you get when you have a craving for fried cod, but you also  want a root beer float and a chili dog? Apparently, not too many other could relate either…

In addition to loosing half their franchises since their height, they lost 300 locations over the last 5 years alone and another 60 during the 2020 COVID lockdowns.

While millions of Americans enjoy the convenience of fast food, it appears for Long John Silver’s target audience, they preferred the original quality experience and cheap burgers over fish sandwiches.

Categories
Case Studies Personal Development Technology Wealth

Where’s My S@#&? Why Shipping Takes Soo Long Now…

90% of the world’s trade goods are transported by international shipping. Let that sink it.

When countries went into lockdown in early 2020, restrictions on peoples’ movements resulted in significant changes in consumption patterns.

An industry with an estimated 5,500 container vessels was caught off gaurd by the  COVID-19 lockdowns. Then, when Americans flush with stimulus checks embarked on a drunk binge spending spree a year later, there simple weren’t enough ships to meet the explosive demand.

Every able container ship was pulled into service in a scramble to reach U.S. consumers.

But with 40% of US imports going through southern Californian in LA, it had become common to see up to 70 ships just floating nearby waiting to offload the products we’ve been waiting for.

According to Peter Sands, chief analyst at Xeneta, a Norwegian analytics firm for the freight industry; “Everything is so out of its normal balance it will take more than a year for global logistics to unwind.”

As if things weren’t shitty enough, there’s also a container for Asian exporters. Those big ass steel boxes are returning to Asia at a rate of only one for every four arriving in the U.S.

The global supply chain network is on its knees. After a fall in shipping demand during the early days of the pandemic in 2020, a surge at the end of that year led to delays, port traffic jams, and blockages across the world. Now, containers are jammed up in ports due to rising demand and a continuing shortage of dockworkers and truckers.

Don’t look for any solutions coming soon, supply chain experts predict the to remain a backlog in shipping to American ports that could last into early 2023.

The logjam has sent shipping costs to record highs up 449%.

So what’s the solution?

The shipping industry is lobbying for local governments to increase spending on critical parts of the supply chain. Specifically ports, railways, warehouses, and roads in order to increase capacity and cope with ongoing demand.

 

WATCH:

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Best Practices Case Studies Personal Development Technology

How Amazon Quietly Built the Biggest Shipping Company on the Planet

When the world took a pause during the pandemic, Amazon quietly hired an extra 400,000 workers to deliver goods from its warehouses across the country, pushing its total employee count to 1.1 million people.

People hit the buy button on Amazon.com about 13 million times a day. That’s over 66 thousand orders per hour or 18.5 per second. Then like magic, the same day or 3 days later, those 13 million orders get delivered like clockwork.

Which begs the question, how the hell does Amazon fulfill that many orders?

As it turns out, Amazon’s fulfillment system is more complicated and convoluted that any logistics company on the planet. Operationally the company competes more with FedX and UPS than they do with retailers like Walmart or Target.

So there are definitely a few factors in Amazon’s business structure that allow the company to ship and deliver customer orders so damn effectively.

Compared to it’s competitors, Amazon’s supply chain and logistics operations are far more advanced. Amazon strategically builds fulfillment centers in or near urban cities to best reach as many customers as possible. They have over 180 fulfillment centers and continues to expand every year…

The reason Amazon’s can keeps their shipping cost low in comparison to competitors by taking over the entire supply chain including delivery.

This way, Amazon doesn’t have to pay third-party companies to manage their fulfillment.

WATCH:

Categories
Best Practices Case Studies Personal Development Technology

How Amazon Quietly Built the Biggest Shipping Company on the Planet

When the world took a pause during the pandemic, Amazon quietly hired an extra 400,000 workers to deliver goods from its warehouses across the country, pushing its total employee count to 1.1 million people.

People hit the buy button on Amazon.com about 13 million times a day. That’s over 66 thousand orders per hour or 18.5 per second. Then like magic, the same day or 3 days later, those 13 million orders get delivered like clockwork.

Which begs the question, how the hell does Amazon fulfill that many orders?

As it turns out, Amazon’s fulfillment system is more complicated and convoluted that any logistics company on the planet. Operationally the company competes more with FedX and UPS than they do with retailers like Walmart or Target.

So there are definitely a few factors in Amazon’s business structure that allow the company to ship and deliver customer orders so damn effectively.

Compared to it’s competitors, Amazon’s supply chain and logistics operations are far more advanced. Amazon strategically builds fulfillment centers in or near urban cities to best reach as many customers as possible. They have over 180 fulfillment centers and continues to expand every year…

The reason Amazon’s can keeps their shipping cost low in comparison to competitors by taking over the entire supply chain including delivery.

This way, Amazon doesn’t have to pay third-party companies to manage their fulfillment.

WATCH:

Categories
Biography and History Case Studies Economics Entrepreneurship Industries Personal Development Technology Wealth

How Sam Walton Built the Biggest Brand in the World

There’s probably a few things you didn’t know about Walmart, like for fact that in 2014 alone, Walmart generated more than $100 billion in sales than any other U.S. company.

Their workforce is now almost the size of the Chinese army. They make $1.8 million every hour.

Each week nearly one-third of the U.S. population shops in one of their 10,500 stores.

They’re recognized as the largest retailer on the planet with gross revenue larger than its top 4 biggest competitor’s combined. Their market value is currently around $386 billion dollars and rated the 24th most valuable brand in the world.

Here’s the story of how Sam Walton built one of the most globally recognized brand in the world.

This is the Story of How Sam Walton Created Walmart…

Sam Walton Had to Grow Up Early

Sam Walton was a pretty typical American kid. He was the quarterback of his high-school football team, distinguished eagle scout, and voted by his high-school classmates as the “most versatile boy”.

He established leadership skills from an early age.

Growing up in the Depression era, the young Walton was forced to take on many jobs to make ends meet. He sold magazine subscriptions, delivered newspapers, and milked the family cow and sold the surplus.

He grew up in an era when growing up started early.

But hard times build hard people and Walton would soon build one of the largest business venture on the planet while providing jobs to over 2 million people.

After graduating high-school, Walton went to the University of Missouri as an ROTC cadet where he studied commerce in an attempt to better support himself and his family.

He applied to the Warton School of Business for college but couldn’t actually afford to go, so he never did..

Sam Landed a Job in Retail. Then the War Started

Walton eventually graduated from Missouri in 1940 with a bachelor’s degree in economics, an education he would soon put into practice.

He received his first taste in the retail business when he went to work as a trainee at JP Penny’s in DesMoines Iowa.

His pay at the time was just $75 month.

This is where Sam began his life-long study of the retail business. But unfortunately, Sam’s early career at Penny’s was cut short due to the second World War.

In 1942 he was drafted into the United States Army where he served stateside (due to a heart irregularity) as a communications officer in the Army Intelligence Corps.

By the time he was released from the military in 1945, Walton had a wife and child to support. It was time to make some money.

 

Next, Sam Launched His First Business Venture

At the age of 27, Sam took the first major financial risk of his young career when he and his wife Hellen.

They purchased a branch of the Ben Franklin Store from the Bert Lab Brothers on a $25,000 loan he borrowed from his father in-law.

Ben Franklin was a franchisor with an established process of doing business. But Sam was driven by a vision of a slightly different business model. Walton’s idea was to gamble on slashing the profit margins on his products to pass the savings to his customers in return earning a higher sales volume.

According to Walton, there was only one boss, the customer. He believed the customer could fire everyone in the company simply by spending their money anywhere else.

He became determined to convince a majority the world’s retail customers to become his.

His intuition proved correct, the model worked. In the first year of operations his sales increase by 45% with total revenue of $105,000. He was able to pay off the loan he owed his father-in law by year three. 

They sold $250,000 by their 5th year in operation.

Walton Was Fascinated With This New Trend

It was now around the 1950s, the American post war economy was booming, housing prices were low, and America was beginning it’s baby boom.

The depression era was over and the new generation was ready to spend their hard-earned money on consumer goods. Walton focused his efforts on supplying the new shopping generation with savings. He continued to lower profit margins and in turn he experienced higher foot traffic in his stores.

It was around this time he deployed a new concept in retail; self-service.

While it wasn’t his original idea he was just one of the early retailer to deploy the concept. Instead of having sales clerks go to the back of the store to source inventory for customers, he could have customers pick out the products for themselves.

Sam widened the isles in his stores putting all products within grabbing distance for eager-eyed customers.

It was a hit, instantly tripling his sales.

 

Who The Hell Thinks to Buy a Bank?

Not only did self-service pad his bottom line it played into his growing business model to become the low cost leader in retail. For Walton, self-service meant he could have fewer employees.

With fewer employees meant that he could charge even less.

With momentum gaining, Sam was a beginning to become a big fish in his small pond of Arkansas. As Sam’s success grew, so too did his vision and bold moves.

In 1961 Sam and Hellen Walton made a power chess move to purchase a controlling interest in the Bank of Bentonville Arkansas, effectively allowing Sam to lend himself money as he expanded his operations.

How Walmart Began

By 1969, Sam’s location became Ben Franklin Store’s largest franchisee.

That same year he went to Ben Franklin’s headquarters to pitch them on a new idea to expand their discount stores to a new territory and demographic. Walton wanted to launch a chain of large discount stores targeting rural towns.

Sam believed that large discount stores would thrive in small towns of less than 10,000 people.

Growing up in small town America in Oklahoma and Arkansas, Sam knew hardworking Americans were bargain hunters. If products were sold at the lowest price, sales would increase and so would the store’s revenue.

But the executives at Ben Franklin didn’t want to take the risk and opted to pass on his offer (big mistake) to invest in the idea of small town discount store chains.

In the Beginning, No One Believed Him

It wasn’t just the Ben Franklin execs that doubted the business model. It was the entire industry.

Sam’s competitors thought his idea that a successful business could be built around offering lower prices and great service would never work.

Undeterred, Sam self-fund his idea and put his money where his mouth was. He was sure it would work, his wife Hellen did too.

They co-signed and mortgaged virtually everything they had owned in order to finance a new chain store.

 

That Didn’t Stop Him. Then This Happend

With his family now in debt up to their eyeballs, Sam launched the grand opening of the very first Wal-Mart Discount Store.

It was twice the size of their Ben Franklin store and it wasn’t an overnight success. But Sam and his team learned and improved quickly and constantly.

They soon grew to 25 employees.

One store grew into five. Within its first 5 years of operations the franchise had 26 stores doing $12.6M in sales. By 1972 the company was incorporated as Walmart Stores INC and was shortly thereafter listed on the NY stock exchange as a publicly traded company.

The 70s watched Walmart soar in expansion and growth.

Sam Became Obsessed With Improvement 

Sam was up before the sun came up most days, getting on the road to check in on his stores.

The man worked long hours, when he came home he would eat dinner and read most of the evening. Sam studied every retail publication and insights he could get his hands on. He was obsessed with learning and improving.

In his popular business book, Made in America, Sam shared about a time he was held in a Brazilian prison for a night for attempting to “spy” on a Brazilian retail store.

As the story goes a handful of Brazilian businessmen attempted to connect with various successful American business owners and sent them letters in the mail to arrange meetings.

But no one responded to the Brazilians except one. Sam.

 

He Got Arrested in Brazil

Walton invited the foreign retail executives to his home in Arkansas where they ate dinner and spent time together. He secretly wanted to know if he could, in turn, learn anything from them.

Sam and the Brazilian business owners kept in contact, and Sam later decided to visit them down in Brazil, where he was arrested.

As it turned out, Sam visited their retail locations and the police found him on his hands and knees with a measuring tape to test the size of their isles. He was measuring the widths of the isles in an attempt to see if the Brazilians knew something he didn’t about optimizing isle size to increase sales.

Walton Was Playing Chess While Everyone Else Plaid Checkers

Walton was obsessed with learning and learning from his competitors. He spent a tremendous amount of time in their stores (often disguised in sunglasses and a ball-cap).

He was constantly comparing the prices of goods being sold between his competitor’s locations and his.

If they were offering lower on prices on their goods than any of Wal-Marts he would phone the stores and immediately remedy the situation. For Walmart’s strategy to work they had to offer the lowest cost to their consumer.

 

Always the Family Man

Sam Walton didn’t just have a knack for business. He was also a family man with a big heart for his country, faith, and family.

His wife Hellen made a point to make sure the children didn’t miss out on their time with their father while he was expanding the business.Being on the road as much as Sam was in the early years he would make up his time with his family by taking them on month long vacations camping in the Ozark mountains.

On one memorable summer camping trip to northern NY, the family passed through Manhattan, stopping at a Broadway show with a canoe strapped to the top of their car.

Walmart’s Early Hiring Philosophy:

When Sam wasnt with his family he was with his employees. Who he was always the first to credit for Walmart’s success.

Sam believed that the front line employees were the ones who interacted with the customers and had access to the critical information about the health of the growing organization.

To attract employees to his organization early on, he drafted a generous benefits package that included Mal-Mart stock for full-time workers. But he instantly ran into a problem. Most of his employees were part time clerks who did not qualify, earning a little more than minimum wage.

It was Sam’s wife Hellen, who suggested he make the stock benefits available to all employees.

She argued that if they were going to share profit across the organization they must do it to all employees. Sam didn’t agree in the beginning but Hellen was persistent and he agreed to open the benefits plan to all employees.

Walmart Focused on Growing Their Team

Given the enormous profits to come for the growing company, employees couldn’t predict their good fortune for those who joined early on.

One retired Wal-Mart truck driver for example, who had been with the company from 1972-1992, stated that after 20 years employment, on retirement he received a compensation check in the mail for $738,000! due to the growth of his stock interest.

Over 3,500 employees at that time became associated in one of the most lucrative profit sharing programs in American business.

The company grew to 191 stores by 1977. By 1980 there were 276 stores across the country and reached and annual sales milestone of $1B for the first time in Walmart history.

Explosive Growth:

The 80s ushered in even more growth for the quickly rising enterprise with its acquisition of 91 BigK retail outlets in the Southeast. This merger  officially turned  Walmart into a national discount chain.

In 1983, Walmart creat Sam’s Club as a Walmart subsidiary. By 1987 they were operating 1,198 outlets, 200,000 staff, and $15.9B in sales.

Later that same year the company invested into the use of a new technology when they completed they invested in the largest private sector satellite communications project in the US.

They Bought a God Damn Satellite?

The satellite connected every store inventory and sales data across all nation-wide operating units with the general office. One can only assume Walton was gearing up to go global. He must have realized data centralized data would be mission critical.

They needed a way to track what products were selling at each store in each season to maximize the efficiency of their inventory.

In 1988 Walmart opened its first SuperCenter that included a supermarket and general merchandise store.

They also launched their first international operation in Mexico. Then to South America and Europe markets shortly thereafter. Bumping up Walton’s personal net worth to around $23 billion around this time.

Commitment to Service and Values:

By the 1990s Walmart was the largest retailer surpassing the legacy SEARS organization.

In 1992, Sam Walton received the Presidential Medal of Freedom from President George H.W. Bush for “his strong commitment to service and to the values that help individuals, businesses and the country succeed.”

This is the highest honor a citizen can bestow on a private citizen in the US.

It was during his acceptance speech that Sam first publicly expressed Walmart’s proud mission:

“If we work together, we’ll lower the cost of living for everyone. We’ll give the world an opportunity to see what it’s like to save and have a better life.”

 

 

Leaving a Legacy

Sam Walton passed away several months after receiving the Presidential Medal of Freedom from a long battle with cancer. While he’s no longer here, his legacy remains prosperous.

To this day, Walmart remains a leader in the retail industry.

His immediate family owns just under 50% of the company and have become the wealthiest family in America with combined wealth of over $225 Billion as a result of growing the largest chain of discount retail stores in the world.

Sam Walton had a vision to supply consumers with the most products at the lowest cost. He built his dream into an empire from 1 simple store in Arkansas to almost 12,000 stores, under 56 operating names across 26 different countries in less than 60 years.

Walmart currently employs 2.2 million jobs globally and 1.5 million in the US alone.

This Was Walmart’s Business Strategy:

The company’s entire strategy was to focuses on being the low cost leader. It’s a high risk high reward gamble to achieve the highest market share.

Walmart invested heavily to track database inventory by store and season to understand how to prepare each location inventory.

This allows the retail machine to overcome what frontline calls one of retails biggest problems: Getting the right mix of products in each store to generate the highest sales volume.

Giving Walmart yet another advantage to keeping its costs as low as possible.

In addition to taking advantage with tech and data, Sam Walton was one of the first business executives to recognize the importance of the Asian labor market. Today 80% of Walmart’s come from low-cost asian suppliers.

This enabled Walmart to moved manufacturers from a push production to a pull production model.

 

How Walmart Changed the Entire Manufacturing Industry

Before Walmart, manufacturers would decide what to produce and attempt to get retailers to buy it (that’s push production).

Walmart engages in pull manufacturing. Due to Walmart’s inventory database tracking on what is being sold, they can dictate to manufacturers what to produce and when. Instead of the other way around.

Their extreme pull demand has allowed it to influence and dictate the supply chain prices, forcing manufacturers to set up shop in Asian labor markets to lower the cost and insure their products show up on Walmart’s shelves.

While this process has squeezed profit margins for manufacturers, the low cost benefit to Walmart’s consumers is still part of their mission and commitment to consumers to “save money and live better.”

 

Their Global Strategy Is So Sneaky, It’s Borderline Genius!

Another reason Walmart has been effective around the globe is they’re strategic about entering foreign markets. When operating abroad they drop their US name brand and logo.

They in fact now operate under 56 different names in over 28 countries.

When entering new markets the don’t just kick the door in pushing Walmart, they make strategic acquisitions and actually just operate under their existing name brands.

Strategy Summary:

The advantage of Walmart charging a lower price but selling a larger volume has allowed the company to maintain its profits and expand its market share dramatically.

The disadvantage in the low cost approach is that focusing on cost reduction and cheap manufactured products can make the company lose sight of evolving customer tastes and preferences over time (Target).Being the low cost leader has enabled Walmart explosive growth.

But if you If you can’t be the cheapest there is zero strategic advantage of being the second cheapest. Just ask any of Walmart’s competitors.

That’s what makes it a bold gamble. But it is clear the for the moment, Walmart is the biggest retail brand in town.

 

 

Categories
Biography and History Case Studies Entrepreneurship Marketing Mergers & Acquisition Personal Development Technology Wealth

How a Hippy and a Hitchhiker Created a $1 Billion Lipbalm Business

This is the story of Burt’s Bees.

Their logo can be spotted everywhere from the isles in chain-store supermarkets to  roadside novelty shops. The Burt’s Bees brand  swarmed the US and abroad and has grown into a legitimate household name brand with an obsessed customer base.

Their lip-balm business was cemented into business hall of fame when their founder sold it to Clorox for jaw-dropping $970 million. But long before their rockstar exit, the origin story of Burt’s Bees started in the middle of no where in Maine by 2 eccentric loners.

As it happens, the Burt’s Bees, story started with a bearded hippy living out of a modified turkey coup with no electricity or running water, and a hitchhiker who eventually became his business partner and lover.

Here’s their story…

Escaping Life in the “Big Apple”

Burt Shavitz was a photojournalist in New York City in the 1960s covering the key issues of the day. He was credited for example with capturing key figures during the civil rights movement with the likes of JFK and Malcolm X.

Shavitz had a promising and safe career working for established media publications like Time and Life Magazines. But Shavitz wasn’t long for the corporate world.

Mass media in the 60s began rise of TV journalism. Shavitz felt the times were becoming less relevant in the big city for a photojournalist. So he began contemplating how he would dedicate the next chapter of his life.

Then one day, after snapping a photo of an elderly neighbor looking out her apartment window, he realized he no longer, if ever, belonged to the hustle and grind of New York City.

I knew that that would be me, 90 years old and unable to go outside, if I didn’t get the hell out.”

So he did, Shavitz got the hell out of NY. He traded the life he knew in the concrete jungle for small parcel of land in the backwoods of Maine where his only possessions left included a golden retriever named Rufus, and a beehive intended to make into a hobby.

Meanwhile in San Francisco

On the other side of the country, living a parallel life, Roxanne Quimby, 15 years younger, was a struggling artist living in San Francisco.  Who like many other young people at the time, was escaping the urban sprawl of city life seeking freedom in the remote wilderness.  Pregnant with twins, she found herself moving to Maine to start a new life with her boyfriend.

While settling into her new home, Quimby’s boyfriend left her. Expecting children and in need of work and money she set out to fend her own. Literally hitchhiking her way into the nearest town in pursuit of any employment.

As fate would have it. The two future business partners met that very day on the side of the north-woods rural highway as Burt pulled over to pick up a complete stranger thumbing a ride into town. What are the odds? 

Here’s the version of that fateful encounter posted to the company’s Web site:

It was the summer of ’84, and Maine artist Roxanne Quimby was thumbing a ride home (back when you could still do that sort of thing). Eventually a bright yellow Datsun pickup truck pulled over, and Roxanne instantly recognized Burt Shavitz, a local fella whose beard was almost as well-known as his roadside honey stand. Burt and Roxanne hit it off.

The 2 Became Business Partners (of a kind)

The two eventually became partners in both life and in business. While Burt was content selling his honey to his local patrons on the side of the road. Quimby was looking to supplement both of their income.

Burt had a lot of unused wax on his property, viewing it as simple organic waste from his bee hives, but none-the less, never disposed of it in case he had future use of it. What Burt saw as waste, Roxanne saw it as future product lines.

She started out converting the excess wax into homemade candles and began selling them at local craft fairs, bringing home a total of $200 at their first show The duo generated just $20,000 their first year in business together.

The honey was a steady seller but Quimby could only move the candles in the fall and winter holiday season. People just didn’t seem to want them in the hot summer months. Forcing Roxanne back to the drawing boards, looking for something else to craft with the unused wax.

Then, she stumbled across an article in a Farmer’s Almanac that contained an all-natural wax lip-balm recipe from the 1800s…

On her wood stove, she heated a cauldron and poured the liquid wax to cool in small polishing tins. She instantly loved the old time look and feel of her new creation.

Building the Brand

Quimby outsourced an artist to create a sketch of Burt for the product packaging, and the brand took on its now-famous character. She labeled them Burt’s Bees.

Now beyond honey and candles, Quimby was able to introduce a line of shoe polish and the eventual coup d’é·tat, an all-natural honey infused lip-balm.

This was the beginning of the Burt’s Bees brand, (which today is the second largest selling natural care brand of cosmetics in the country, second only to Chapstick and Blistex).

In 1994 they grew their revenue to $3 million business, Quimby decided they had outgrown their small marketing in Maine and needed to find a more favorable business climate.

Maine was high on taxes for one, but now they were selling their products all over the country. She required a supply-chain infrastructure to properly supply their increasing demand. Quimby found what she needed and moved the entire operations to North Carolina.

But the Partnership Came to an End

Burt accompanied Roxanne but he only lasted two months into the move when things changed their relationship forever.

During that transition, Shavitz was forced out after having an affair and ultimately accused of “sexual harassment” with an employee. This is another story all-together which he explained in the popular Netflix documentary, Burt’s Buzz. 

According to reports, Shavitz had an affair with a younger woman and was forced out of the company with a payout of $130,000 in 1999 to go back to his life in Maine.

WATCH: You can watch the full documentary here:

Burt’s resignation ultimately led Quimby to buy BUrt out of the company by acquiring his shares.

With Burt gone, Quimby moved massive products skyrocketing from $23 million in 2000 to $164 million in 2007. The industry saw massive golden opportunities in the market for green products.

Selling the Business

Through a series of subsequent business deals that occurred as a sole proprietor, Quimby was able to sell a majority of her interests in the all-natural brand to a private equity company for $170 million while still negotiating a remaining 20% minority stake in the company.

Which Quimby later on subsequently sold her remaining interests to Clorox for an additional $290 million.

For a brand forged on the side of a highway, Quimby expertly maneuvered Burt’s Bees through one hell of a business transformation.

Roxanne went from hitchhiker to the mastermind behind the household brand name we know today with a total earnings payout of $404 million.

What Happend to Burt?

If Burt hadn’t gone through the scandal in the late 90s, giving up his stake in the brand for $130,000, his shares would have been worth about $59 million.

Although he passed at the age of 80, Shavitz wasn’t one to linger in the past.

In an interview with the New Yorker, Shavitz said;

“I’ve got everything I need: a nice piece of land with hawks and owls and incredible sunsets, and the good will of my neighbors.

What I have in this situation is no regret. The bottom line is she’s got her world and I’ve got mine, and we let it go at that.”

Which sounds exactly like what a guy who sells honey on the side of a remote road in Maine might say.

What Does One Buy With $400 Million?

While it’s none of my business, it does make one curious. What did Quimby do with all that money? She went to Hawaii, then to Antarctica and all the places she felt like. She shopped for a home in Palm Beach…She bought six.

But it turns out she invested most of her newfound wealth in forrest land to protect it. She then purchased 100,000 acres of land in Maine turning 87,500 acres into a protected national forrest land she gave back to the US government along with $20 million in cash to keep the park funded.

As of 2016, she is a resident of Portland, Maine, where she remains prominent philanthropist and leads a number of charitable organizations in the area.

 

 

 

 

 

 

 

 

Categories
Branding Case Studies Culture Entrepreneurship Marketing Personal Development

This Rebrand Will Make You Cry Laughing!

A few years ago, in an office in Toronto, an Oglivy advertising intern named Hunter Somerville, was working a part time job for a Kraft Cereal brand client, called Shreddies.

Shreddies Cereal Had a Major Problem

The Shreddies brand was facing a major dilemma. It was 60 years old with an aging and declining customer base.

So Kraft hired Ogilvy, in a bit of a hail-mary attempt to come up with fresh ideas. Their goal was to return their crown as the rightful heir to the throne of the breakfast kingdom they had once dominated.

So Kraft tasked the Ogilvy to give their older brand an exciting new makeover. But only under one condition, the couldn’t actually change any aspect of the actual product…

With that massive caveat in mind, the Ogilvy team acccepted the challenge. But now how would the team alter the perceived brand value without changing the actual product?

Then an Idea Emerged…

The answer turns out, came in the form of a joke made by an intern in a client brainstorming session.

You see, during a team meeting, according to Fameable, Hunter Sommerville, reached into the cereal box, and pulled out one single square piece of Shreddie cereal.

Holding the square carefully in his fingers, he then rotated it 45 degrees, and jokingly boasted; “this isn’t a square, it’s a DIAMOND!”

It was in this moment, out of these fateful ashes, where Hunter planted the idea for the new, and far more exciting, Diamond Shreddies. I kid you not.

They Didn’t Change the Product – They Just Changed the Story

The team immediately jumped on the fresh idea. A square is a term that literally means boring. But a diamond, that’s rare, coveted, and exciting!

They spun Hunters joke into pure gold. They stepped into it and made it a full campaign. They made it into a viral sensation. Reviving the aging brand in awesome fashion.

They re-tooled the messaging while maintaining all the physical characteristics of the original. With a twist (literally).

WATCH:

They Became Worth Talking About

But wait, what happend to the square Shreddies version? Don’t worry, they came up with a concept to make them both available. In a combo pack! LOL!

They gave consumers the option of choosing between the two shapes, traditional or diamond. Both of which were, in fact, the same exact product. It became an inside joke that create awareness for the brand.

By updating their messaging they were able to create awareness for the product that translated to an increase in sales by 18%.

You can watch the entire campaign explained by Ogilvy executive, Rory Sutherland here:

 

Brand Conclusions:

For starters, it paid off to turn to an outside perspective for a fresh approach to solve an aging brand problem.  Specifically, from someone that occupied the demographic they were hoping to attract. 

Second, they choose to address the obvious elephant in the room, that their brand became became stagnant. They turned the problem inside out and openly made it into a campaign and something fun to talk. Finding a fresh way to tell the story of a 60 year old product to a new generation of buyers.

They brilliantly introduced themselves to a new era of Shreddies consumers that now view the brand as fun and creative.

The Shreddies story is a great example that innovation can take place without changing the product but how you introduce your product or service. Shreddies increased sales by 20%, just by simply talking about their product in a new way.