Wal-mart Stores Inc. and Procter & Gamble’s adopted the notion of continuous replenishment to implement an IT-dependent strategic initiative which features real-time scanner data transferring between Wal-mart and Procter & Gamble through its satellite-based network infrastructure. As a result, Wal-mart will be able to provide low cost products to its customers. Do you think Wal-mart can sustain this competitive advantage? Why do you think Wal-mart can or cannot sustain its competitive advantage? Which barriers to erosion can or cannot prevent the imitation and how?
I personally think Wal-mart can sustain this competitive advantage. The ability of a firm to protect its competitive advantage is not whether the advantage is theoretically replicable that matters in practice, but the difficulty that competitors face in matching the leader’s offer. In this day and age, Satellite-based infrastructure is still rare. It is a huge investment. This technology is scarce and not readily available for acquisition by competitors. This infrastructure is valuable to Walmart, and could not easily imitated. The infrastructure is un-substitutable. Moreover, the collaboration relationship between Wal-mart and P&G cannot be duplicated or substituted. The supply chain management expertise of Wal-mart is also unique and valuable.
Wal-mart controls some specific and difficult to imitate IT resources which could create IT Resources Barrier. Wal-mart already had the network infrastructure to do so. Competitors who wanted to replicate this initiative had to first deploy the same (or a comparable) infrastructure. Wal-mart’s ownership of this unique prerequisite IT asset asset translated into a response-lag driver (IT infrastructure) that contributed to incre...
... middle of paper ...
...rs’ radar screens also because of its peculiar characteristics that run the risk of leaving it underfunded, unless general and functional managers get directly involved in the threat assessment and mitigation process. Because security is the type of investment that is difficult to gain funding for, particularly when competing for limited resources with projects that promise big results-efficiency improvements, revenue enhancements, and the like-it is all the more critical that it is not left to the IT group to make the case. General and functional managers must get involved in the security discussion, understand the threats, and assess the degree of risk that the firm should be allowed to take. Actually, as a general or functional manager should responsible for weigh in on the difficult trade-off decision between purchasing more security and accepting higher risks.
As seen in Exhibit F, Best Buy has 1,055 main locations that consist of their standard large format stores, and 406 Best Buy Mobile locations that focus on mobile device sales. To supply these locations, Best Buy has 23 distribution centers located throughout the country. Comparatively, Wal-Mart has 4,625 stores stocked by 158 strategically located distribution centers. This puts Wal-Mart at a huge advantage in a couple of ways. Not only is Wal-Mart much more likely to have a store nearby any given customer, they are also better equipped to keep its products in stock at all times. This means more customers visit, and due to stocking, more customers can make the purchase they want. On an international level, Wal-Mart also exceeds Best Buy’s few hundred stores with 6,308 stores in over 11 countries. This furthers Wal-Mart’s availability to customers and puts them at an advantage over Best Buy. Additionally, the increased scale of Wal-Mart’s retail and distributive operations make them extremely competitive on pricing, a major aspect of purchase decisions for high-ticket items like consumer electronics.
In the United States and all over the world, the entry and operations of big retailers like Wal-Mart into a small town sparks great controversy within the community. The fact that people contemplate on the fact that the policies and actions of Wal-Mart are destructive to a small town’s economy is not new. Most small town’s economies are run by subsistence and self-reliant traders. With time, the traders embrace the division of labor and specialization of skills in accordance with the trade, production and manufacturing needs of the community. In such a market, a simple move like a decision by the producers to sell directly to the consumers may spark
Albertson’s is planning many new strategies to try, and grab some of the market share that Wal-Mart has taken from them. The main way they plan to do this is though innovative technology. The reason for this is do to the fact that Albertson’s has vigorously tried to offer many perks to its customers, such as substantially better customer service, as well as convenience. Yet even though this may be true. Wal-Mart’s low prices have seemed to be far superior in generating revenue that has translated into enormous amounts of profits. So this is why now Albertson’s figures that if they cannot beat them on price then they will do it through information technology.
Wal-Mart’s competitive environment is quite unique. Although Wal-Mart’s primary competition comes from general merchandise retailers, warehouse clubs and supermarket retailers also present competitive pressure. The discount retail industry is substantial in size and is constantly experiencing growth and change. The top competitors compete both nationally and internationally. There is extensive competition on pricing, location, store size, layout and environment, merchandise mix, technology and innovation, and overall image. The market is definitely characterized by economies of scale. Top retailers vertically integrate many functions, such as purchasing, manufacturing, advertising, and shipping. Large scale functions such as these give the top competitors a significant cost advantage over small-scale competition.
Company Selection Paper Team B's assignment this week was to select two different publicly traded companies in the same industry. The two companies will serve as the basis for subsequent team assignments. The two companies chosen for the study are Wal-Mart and Target. This paper provides an overview of each of the selected companies. Date of Company Establishment Wal-Mart was established in 1962 by Sam Walton.
A1: Dollar General's main business strategy is to focus on being the leading distributors of consumable basics, with 30% of the merchandise at $1.00 or less. Dollar General believes in maintaining an assortment of consumable merchandise and making shopping for everyday items hassle free and simplistic.
Based on the Miles and Snow strategy typology, Dollar Tree would be categorized as a prospector and an analyzer. Dollar Tree initially started off as a prospector when it was created as an off-shoot of the retail chain K &K Toys (Parnell, 2014). Prospectors focus on intrapreneurship, which involves the creation of new business ventures within an existing organization (Parnell, 2014). When K & K Toys was divested in 1991, it was done so in order to focus their energies on developing the concept of the dollar store, which in turn gave them the first mover advantage for being first in that particular market (Parnell, 2014). Just as prospector companies places priority on new product and service development to meet the changing needs and
How does managerial planning for Project Impact take place at different levels within the organization?
Summarize and discuss the core issue in the case. Do not repeat the entire case details but only pertinent information at the heart of the case.
Walmart is a retail giant that just about everyone in America has purchased something from them. It is a one stop shop for anything that a person could ever need. Walmart stores can be found anywhere in fact most people are less than an hour drive away from a Walmart store. Walmart’s success has put many companies out of business. The chains success is primarily from low prices and using an information technology system to meet customer demands giving them a competitive advantage. Walmart’s first major use of information technology came in 1975 when the company leased an IBM computer system to track inventory in warehouses and distribution centers. Computers have come a very long way since this time and are used almost everywhere. But in 1975 this was cutting edge technology and gave Walmart the competitive advantage over other retailers. Another thing that Walmart used to be revolutionary in their supply chain was the use of scanning barcodes in 1983. Before barcodes objects had to be read by a skilled cashier. With barcodes all that was needed was a quick scan and the computer would do all the work. This greatly sped up checkout time and made tracking inventory and data collection much faster and easier for both customers and the employees. Since this time it has become an industry standard for products.
From the consumer side, Amazon provides services like Amazon Prime, which delivers free two-day shipping on retail purchases, on-demand video streaming and a free access to the Kindle library, everything for an annual
Wal-Mart does have weaknesses, particularly in some of its international markets. In China, it has a primitive supply chain; in Japan it has to deal with "a powerful but backward retail ecosystem;" and in Brazil and Argentina it has
Wal-Mart and Target are two similar global corporations. If one asks each of these store’s customers why they shop there, somewhere in their answer one will find them saying that they can find everything. The difference between these two corporations is their mission, marketing, and quality. Each of these stores are looking to offer a different experience despite selling similar goods. So, when profits are not changing in the United States, they’ve opted for an expansion into other countries. They have opened stores and provided services outside of the United States.
The benefits or competitive advantage Wal-Mart derived over the years from its supply chain management practices is also covered. The reason Wal-Mart is ahead of their competition is because they invest in technology in the 1980s. This investment paid off in the long run. Wal-Mart invested heavily in IT and communication systems to effectively track sales and merchandise inventories in stores across the country. They have set up own satellite communication in 1983. Employees at the stores have the ‘Magic Wand’ at hand. These barcode scanners allow you to check the prices of items at that particular store by scanned the barcode on the product. This is especially helpful when there is clearance that isn 't always marked and sometimes clearance items are cheaper than they
Wal-Mart Stores, Inc. operates retail stores in various formats in the United States and Internationally. It has two segments: The Wal-Mart Stores and The Sam's Club. The Wal-Mart Stores segment includes Discount Stores, Supercenters, and Neighborhood Markets in the United States, as well as Walmart.com. It offers apparel for women, girls, men, boys, and infants. They also offer hardware, electronics, home furnishings, small appliances, automotive accessories, sporting goods, toys, pet food, cameras, health and beauty aids, pharmaceuticals, jewelry, optical department and photo processing services. The Neighborhood Markets include dry grocery, meat, produce, deli, bakery, frozen foods, pharmaceuticals, photo processing, health and beauty aids, household chemicals, general merchandise, and a pet supplies departments. The Sam's Club segment comprises the warehouse membership clubs in the United States and samsclub.com. It offers electronics, jewelry, sporting goods, toys, tires, books, grocery items, and selected private labels. As of July 31, 2005, Wal-Mart operated 1,276 Wal-Mart stores, 1,838 Supercenters, 92 Neighborhood Markets, and 556 Sam's Clubs in 50 states in the United States. The company operates various retail formats in Argentina, Brazil, Canada, Germany, Mexico, Puerto Rico, South Korea, and the United Kingdom. It operates 261 Canadian Wal-Mart stores and Sam's Clubs, 11 units in Argentina, 150 units in Brazil, 88 units in Germany, 16 units in South Korea, 697 units in Mexico, 54 units in Puerto Rico, and 292 units in the United Kingdom, as well as 48 units in China under joint venture agreements.