Wal-Mart & Google

Rich Karlgaard, from Forbes Magazine, has a great article on the differences between Wal-Mart and Google (arguably two of the most successful companies of our times). The stats are astounding!

Google and Wal-Mart are the business world's version of yin and yang. Google is a hypergrowth, high-revenue, wildly high-margin company. Three thousand employees produce annual sales of $5 billion (at the current run rate), or $1.67 million per worker. Cash flow is north of $500,000 per worker per year. The typical Google worker possesses an IQ high enough to boil water. Half hold advanced degrees in science or engineering, most from elite universities. Google leaves no stone unturned in its pursuit of brainiacs, even asking to see prospects' SAT scores.

Wal-Mart is the opposite of Google. It is the world's largest company by sales--$285 billion--but its profit of $10 billion is in line with low-margin retail. Wal-Mart sends the world's largest work force into battle, 1.5 million (few of them SAT superstars) who generate $190,000 in sales apiece. Cash flow and profits per Wal-Mart worker are puny--only $16,000 and $6,700, respectively, or about 3% of those of the Google counterpart.

Google and Wal-Mart have become huge successes in vastly different ways. But the yin and yang have this in common:

• Each company has a simple mission. Wal-Mart's is "always low prices." Google's is "to organize the world's information and make it universally accessible and useful." These companies know who they are.

• The brand and the mission statement of each are aligned. Picture Google and Wal-Mart in your head. There's no confusion about what these companies do.

• Both companies are technology leaders. The previous editor of FORBES, Jim Michaels, likes to call Wal-Mart the world's preeminent tech company. It pioneered the use of bar-code scanners, slick supply chains and inventory management tweaked to local purchasing preferences. The Bentonville, Ark. giant never sleeps. Now Wal-Mart is pushing into RFID chips. Wal-Mart's aggressive use of technology puts the lie to a recent Harvard Business Review article, "IT Doesn't Matter," that says it's okay to sit back and let others lead. Google, meanwhile, continues to attract the best tech brains in Silicon Valley.

• Both companies exploit the cheap revolution. Google's search engine runs on 100,000 cheap servers and a form of free Linux software. Wal-Mart searches the planet for low-cost production. It buys 10% of the goods China exports to the US.

These aren't the only traits that define a wildly successful company, but they sure are some. Read on, there's more. I, personally, love the fact that great companies can come from anywhere. There's a lot of talent and innovation waiting to be uncovered, around the world - outside of the Valley.
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