Sam Walton

We're all working together; that's the secret. Sam Walton - Work - Success Each Wal-Mart store should reflect the values of its customers and support the vision they hold for their community. Sam Walton - Customers - Commitment Outstanding leaders go out of their way to boost the self-esteem of their personnel. If people believe in themselves, it's amazing what they can accomplish. Sam Walton - Leadership - Belief - Encouragement High expectations are the key to everything. Sam Walton - Encouragement - Ambition Walton's management style was popular with employees and he founded some of the basic concepts of management that are still in use today. After taking the company public in 1970, Walton introduced his "profit sharing plan". The profit sharing plan was a plan for Wal-Mart employees to improve their income dependent on the profitability of the store. Sam Walton believed that "individuals don't win, teams do". Employees at Wal-Mart stores were offered stock options and store discounts. These benefits are commonplace today, but Walton was among the first to implement them. Walton believed that a happy employee meant happy customers and more sales. Walton believed that by giving employees a part of the company and making their success dependent on the company's success, they would care about the company. By the 1980s, Wal-Mart had sales of over one billion dollars and over three hundred stores across North America. Wal-Mart's unique decentralized distribution system, also Walton's idea, created the edge needed to further spur growth in the 1980s amidst growing complaints that the "superstore" was squelching smaller, traditional Mom and Pop stores. By 1991, Wal-Mart was the largest U.S. retailer with 1,700 stores. Walton remained active in managing the company, as president and CEO until 1988 and chairman until his death. He was awarded the Medal of Freedom shortly before his death. Walton died in 1992, being the world's second richest man, behind Bill Gates. He passed his company down to his three sons, daughter and wife. Wal-Mart Stores Incorporated (located in Bentonville, Arkansas) is also in charge of "Sams Club". Wal-Mart stores now operate in Mexico, Canada, Argentina, Brazil, South Korea, China and Puerto Rico. Sam Walton's visions were indeed successful.

Howard Schultz

How the Business Started: Starbucks Coffee, Tea and Spice, as it was first known, roasted its first coffee in 1971. The small coffeehouse in Seattle was the vision of three men -- Jerry Baldwin, Zev Siegel, and Gordon Bowker -- who shared a common passion for fine coffee and tea. Their determination to provide the best quality coffee helped their business to succeed. With success came growth. A decade later Starbucks opened its fourth store in Seattle.

Enter Howard Schultz. In 1981, Schultz was a vice president at Hammarplast -- a Swedish maker of stylish kitchen equipment and housewares. Schulz noticed a small business in Washington state was ordering a large number of a special type of coffee maker. Driven by curiosity, Schultz ventured to the Pacific Northwest from New York City to learn more about Starbucks. He saw the store, and immediately realized the attraction to the coffee bean culture. He eagerly wanted to be a part of that world. Schultz met with Baldwin, Siegel and Bowker and tried to break his way into the Starbucks family. He had a plan to take Starbucks across the country. The founders didn’t share Schultz’s bigger picture approach to roasting coffee, but his persistence paid off. In September 1982, Schultz was hired to head Starbucks marketing and oversee the four Seattle stores.

Schultz later left Starbucks to open a string of specialty coffee stores in Seattle modeled after the typical Italian espresso bar. Schultz quickly raised $400,000 in seed capital and by the end of 1986 he had $1.25 million in equity (including backing by his former Starbucks partners). While Schultz’s stores took off, only a year later in 1987, Schultz bought the original Starbucks franchise. Between 1987 and 1992, Starbucks, under Schultz, opened 150 new stores. In 1990, Starbucks turned a profit, and the company continues to open new stores today.

Outstanding Contributions:

Entrepreneurs make unique contributions to the American economy: Using innovations to grow their businesses, they provide concrete benefits to the national bottom line. These benefits provide an interesting framework in which to view these companies.

Entrepreneurs create innovations that improve our quality of life: Starbucks serves ten million customers a week. The average coffee-loving customer will visit a Starbucks 18 times a month. Rapid expansion has marked Starbuck’s history, but it has remained committed to the value of individuality. Each store has a different lay out with a decor that matches the personality of the neighborhood.

Entrepreneurs create new jobs: With over 3,300 stores around the world, Starbucks employs more than 40,000 people. The Starbucks Corporation’s policy of opening restaurants in office buildings, hotels and outdoor kiosks has invigorated other businesses in surrounding areas.

Entrepreneurs improve our position in global economic competition: Starbucks has rapidly shot beyond the city lines of Seattle and beyond the borders of the United States. More than a dozen countries are home to a Starbucks store. There are over a hundred Starbucks stores in Japan and the United Kingdom alone.

Entrepreneurs reinvest their newly created wealth in the community: Howard Schultz has insisted that Starbucks adopt an environmental mission statement. This pledge commits Starbucks to only buying coffee that has been grown organically. The company also takes an interest in the farming communities that harvest the coffee beans. Starbucks has built schools, health clinics, and safe coffee processing facilities. Locally, Starbucks has worked with stars like Magic Johnson to bring Starbucks stores to poor African American neighborhoods across the country. The Starbucks Foundation sponsors literacy programs, Earth Day clean-ups, and regional AIDS walks.

Howard Schultz earned a BS from Northern Michigan University in 1975. His company, the Starbucks Corporation, sells coffee drinks from over 3,300 stores around the world. The company has entered into agreements with bookstores, airlines and hotels. It also markets its coffee through an online catalogue. Provided by: National Commission on Entrepreneurship. Article on howard, schultz by National Commission on Entrepreneurship

Warren Buffett

Buffett’s early life: He began working at his father's brokerage at the age of 11, and that same year made his first stock purchase, buying Cities Services preferred shares for $38 each. He sold them when the price reached $40, only to see them rocket to $200 a few years later. This taught him the importance of investing in good companies for the long term

Do you know that he ran the partnerships out of his bedroom?

His investment strategy:Buffett employed a three-pronged approach:

1) Generals: undervalued securities that possess margin of safety and meet expected return-to-risk

2) characteristics Arbitrages: company events that are not related to broader market changes, such as mergers and acquisitions, liquidation, etc.

3) Controls: build sizeable holdings, ally with other shareholders or employ proxies to effect changes in companies.

Buffett's philosophy on business investing is a modification of the value investing approach of his mentor Benjamin Graham. Graham bought companies because they were cheap compared to their intrinsic value.

He was of the belief that as long as the market undervalued them relative to their intrinsic value he was making a solid investment. He reasoned that the market will eventually realize it has undervalued the company and will correct its course regardless of what type of business the company was in.

The following are some questions to determine what business to buy, based on the book Buffettology by Mary Buffett:

*Is the company in an industry of good economics, i.e., not an industry competing on price points.

*Does the company have a consumer monopoly or brand name that commands loyalty?

*Can any company with an abundance of resources compete successfully with the company?

*Are the earnings on an upward trend with good and consistent margins?

*Is the debt-to-equity ratio low or is the earnings-to-debt ratio high, i.e. can the company repay debt in few years from its earnings?

*ROE is consistent over its history and high compared to industry averages?

*Is it more than 12%? Or does the company have high and consistent Return on total capital?

*Does the company retain earnings for growth?

The business should not have high maintenance cost of operations, low capital expenditure or investment cash outflow. This is not the same as investing to expand capacity.

*Does the company reinvest earnings in good business opportunities?

*Track record of management accomplishing these investments?*Is the company free to adjust prices for inflation?