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When Sam Walton died in 1992, some industry insiders doubted that the Wal – Mart chain that he had founded some 30 years earlier would retain its prominence as a discount retailer. Lost for good they feared, would be the “magic spark” that Walton used to light fires under the chain’s 1.3 million associates. And, as Wal – Mart stock failed to enjoy the same bull – market growth as many other companies in the mid – 1990s, the pundits appeared to be correct. Today, however, with stores in all 50 U.S. states and nine other countries, Wal – mart has rebounded, leading the pack of discount stores with record earnings. In fact, with $218 billion in annual sales and 100 million customers per week, Wal – Mart is the world’s largest retailer and was named “Retailer of the Century” by Discount Store News.
One key to Wal – Mart’s success, many believe, is the way it energizes its sales force. For example, employee meetings at Wal – mart stores are the same pep rally – type affairs that Walton organized years ago. Cries of “Give me a W, give me an L, give me a squiggly….” are led by store managers who whip salesclerks into selling frenzies as they prepare for the day’s onslaught of customers. And those clerks know just what their customers want and how many are buying their merchandise. Just to make sure, they are given thorough sales figures to show exactly how their particular store is doing. How much money did they take in compared to the previous day, or week, or years? What items are hot sellers, and what’s their markup?
Representatives of the various departments proudly announce the answers but not in the dry tone used at most business meetings. At Wal – Mart, they make it fun for everyone. For example, if you were an employee of the Wal – Mart store in Pasadena, Texas, not too long ago, you could have won a package of Oreo cookies for correctly guessing that the store sold 15,850 packages in the previous four weeks. Granted, the prize does more for the winner’s waistline that his or her net worth. However, such events promote camaraderie and a sense of fun that define the working experience at Wal – Mart.
As you might imagine, the sales figures quoted come from the company’s computers. What you probably never would have imagined, however, is that Wal – Mart’s information technology is so advanced that it provides up -to- the-minute tabs on every sales figure you possibly could imagine throughout the chain. Infact, Wal – Mart spends some $500 million each year on the latest information technology, and it is second only to the U.S. government in the amount of information storage capacity it has at its disposal (a whopping 24 terrabytes!). No other retail establishment even comes close.
This technology gives employees complete information on the status of every item Wal – Mart sells. For example, with the stroke of a simple handheld scanning wand over an item’s bar code, a store manager can get detailed information about the item’s past, present, and projected sales. (Did you know, for example, that Wal – Mart sells Barbie doll every 20 seconds?) And if a Wal – Mart employee finds a competing store advertising a lower price on any item Wal – Mart sells, his or her store manager can immediately match the price and send the new, lower price to all 2,400 Wal - Mart stores via the company’s satellite system. The price reduction is then trumpeted on in – store bulletin boards.
Wal – Mart officials view this whiz – bang technology not only as a useful merchandising tool but also as a high – tech counterpart to the company’s other employee-energizing energizing tactics, such as its decidedly low – tech pep rallies. Armed with information on how well they’re doing, company officials contend. Wal – Mart employees will be inspired to rise to the occasion to do their very best. And if the company’s recent $3 billion profit is any indication, this strategy seems to be working just fine.
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