Company Background Sam Walton, who was convinced that the American consumers wanted something more than retail shops, opened his own discount and retail shop in Rogers, Arkansas. Walton realized he could do better by passing on the savings to his customers and earning his profits through volume. This insight would form a cornerstone of Walton’s business strategy when he launched Wal-Mart in 1962. Cost-cutting was an obsession in the Wal-Mart culture, and Walton understood that a major requirement for keeping costs down was controlling the payroll.
In 2012, Wal-Mart celebrated 50 years of helping people save money so they can live better. The company employs 2. 2 million associates worldwide and serves 200 million customers each week at more than 10,000 stores in 27 countries. Among the many business enterprises and organizations that changed the world, Wal-Mart holds a very important position. As compared to other genuine companies that changed a lot in the world of entrepreneurs, Wal-Mart has a short, yet highly-acclaimed story of success that is backed by brute force of efforts put in by many members and employees.
Wal-Mart adopt E-business What business processes were changed? Possibly the single greatest success story of e-business and B2B implementation is that of the rise to dominance by Wal-Mart in the North American retail market. Wal-Mart has impressive growth in such a short time span and the single most important factor in this rise was their harnessing of the power of e-business. Wal-Mart built an inventory and supply chain management system that changed the face of business making it very competitive as an e-business. Like many companies, Wal-Mart started down the road to total integration by first linking its internal systems. Then the focus shifted toward an emphasis on integrating Wal-Mart’s systems with those of its suppliers. More recently, Wal-Mart has initiated efforts to bring processes and systems from the customer side of its business into the loop. What’s left is a customer-to-supplier architecture that allows Wal-Mart to follow its customer’s shopping habits so closely as to know their likes and dislikes and to parlay that information into pinpoint promotions. (Robinson ;amp; Kalakota, 2004) Wal-Mart has revolutionized supply chain management by using a pull model where customer demands drive the suppliers. Inventory control is finely honed and purchasing trends are available to suppliers, whom now must be able to quickly respond to the needs of millions of customers. The business decision to decentralize the procurement process means that front-line staff in every store can immediately order the appropriate stock electronically, which will in turn require rapid turnout of product from the suppliers.
This rapid replenishment system, coupled with accurate purchasing forecasting, helps Wal-Mart reduce overall costs. While not always good for suppliers in general, Wal-Mart’s power as a giant in business has helped in establishing new standards for B2B e-commerce. Wal-Mart’s mindset of cutting costs at all costs resulted in them deploying EDI over the Internet to eliminate the costly VAN altogether. EDI over the Internet (EDI-INT) uses a new standard called AS2, a communication protocol that attempts to make EDI communications over the Internet both secure and reliable.
By mandating their suppliers to use AS2, Wal-Mart leads the way in creating a demand for a new generation of EDI, and in turn drives the whole world of e-business forward. Early on, Wal-Mart saw the value of sharing that data with suppliers, and it eventually moved that information online on its Retail Link Web site. Opening its sales and inventory databases to suppliers is what made Wal-Mart the powerhouse it is today. Would the company survive without the E-Business aspect? Why or why not? Wal-Mart has so many great strengths to leverage throughout the global market, and Wal-Mart will survive without E-business.
Some of those strengths are that Wal-Mart best-positioned global retail, and it has a strong price leadership. There is no doubt that Wal-Mart is the best-positioned global retailer to address the needs of customers around the world. Wal-Mart’s growth through new stores remains a priority, with supercenters the primary driver because they continue to offer the greatest returns and allow customers a one-stop shopping experience through more than 3,800 stores and over 617 million square feet of selling space. Wal-Mart reinvigorated their fundamental price promise of provide low prices day-in and day-out on the broadest assortment.
Their price message, backed by the strongest ad match policy in the industry, ensures that we are driving price separation with competitors. The certainty of great values throughout the store such as best-positioned global retail and a strong price leadership has been fundamental to Wal-Mart for 50 years, and this company will to survive. Would the company survive without the Brick-and-Mortar aspect? Why or why not? Wal-Mart e-commerce websites is not going to replace bricks-and Mortar stores, because the key to Wal-Mart’s emerging e-commerce strategy is integrating store and online marketing.
This strategy is product of ideas such as pick up at store. “Wal-Mart launched on Tuesday its Site to Store program, in which Walmart. com customers can opt for free shipping–provided they are willing to pick up their order at a Wal-Mart store instead of having it sent to their home. The items ordered are shipped within 7 to 10 business days to a Wal-Mart store, and then an e-mail is sent to the buyer that alerts him or her to pick up the order. ” (McCarthy , 2007) Retailers say that tying online and in-store inventory together lets them sell more products to more customers.
Nordstrom recently combined its inventory so that if the online stockroom is out of a jacket, a store that has it can ship it to the Web customer. Encouraging customers to retrieve items they have ordered online in a store increases visits to the stores, which usually increases sales. What were the unique advantages of this IT solution? Any noticeable drawbacks? Wal-Mart is strengthening their Global e-Commerce business by investing in new talent and technology such as Wal-Mart new iPhone application that allows