Walmart's Emerging Information Systems: A Case Study

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Emerging Information Systems
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Executive Summary
This project is all about summarising specific information about emergence of Information
system in the present market situation. However there are certain positive or negative aspects
which are associated within retail sectors that tend to increase the overall chances of growth and
sustainability in near future time. Walmart is one of the leading retail supermarkets which are
using digital technology to increase overall performance of the company. The both internal as
well as industrial analysis has been done to examine the possible capability in the IT sectors.
Use of CRM and CRM as valuable aspects of success for the company has been discussed in
this report. On the basis of the overall analysis specific suggestion has been made to improve the
use of technology in their regular course of business operation.
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Table of Contents
Executive Summary........................................................................................................................2
Introduction.....................................................................................................................................2
Industry Background..............................................................................................................3
Business Model and Environment..........................................................................................4
IT infrastructure of Walmart................................................................................................10
CRM Review........................................................................................................................11
Justification of CRM System................................................................................................13
Conclusion....................................................................................................................................14
References.....................................................................................................................................15
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Introduction
Information system is one of the crucial aspects for any business organisation in order to
develop their overall operational activity so that future goals can be attained. It has been seen
that digital technology has been emerging at very fast rate and maximum number of companies
are looking forward to move along with the advance technology. It will help organisation to
transform their day to day operation effectively to remain consistent in the market for longer
period of time. This project reports aimed at providing specific information about the accurate
information system solution to the Walmart Company (Laudon and Laudon, 2015). Apart from
this examination of industry background and use of reliable business model that can help the
company to target their audience and attain maximum growth chances in near future. Along with
that use of CRM and CRM system within the organisation is also discussed properly in this
report.
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Industry Background
Retail is considered as one of the crucial process of selling consumers product and services to
their respective customers by using wide channels of distribution to generated maximum profit.
It is essential aspects for the retailers to satisfy demand through examine an effective supply
chain. It is the primary responsibility of retailers to sells their regular products to its end
customers either by using medium quantity. This can be either individual units or very narrow
quantities according to their specific requirements and capability.
Walmart Inc is one of the multinational retail industries with a chain of hypermarket
departmental store and grocery products. It is situated in Bentonville Arkansas and found in
1962 by Sam Walton. In the present period of time the company is having around 11361 stores
in almost 27 nations which is operating by different names. It was entirely owned by its
operation in various parts of countries such as Africa, Canada and Argentina. In the year 2018, it
would record a minority stake in Walmart Brasil with around 20% of total shares. According to
the list of Fortune Global 500 it has been termed as leading company in the world in terms of
revenue over US$500 billion.
The best part of this company is that it is considered as one best in terms of private employers in
the globe as with 2.2 million employees (Seidel, Recker and Vom Brocke, 2013). Another
important fact about the Walmart is that it holds 65 % of grocery retails sales from US
operations. The corporate business mission of the company is to protect people income so that
they can live better life in near future. The mission statement tends to reflect the ideology of the
company owners to satisfy the need and desire of the customers. They are looking further by
targeting customer preferred shopping location in various channels through delivering reliable
value and continuous innovation through promising valuable brand in less income. Walmart is
focusing on the long term strategies to reduce cost leadership.
By this particular strategy, the company can ensure that it would offers best products to their
customers by offering best quality products at economical cost rather than other industry who
tend to charge maximum for their product. The supply chain management planning has been
providing the company with various sustainable benefits that consists of lower cost items that
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can minimise inventory holding costs as well as improve wide variety of pricing for their regular
customers.
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Business Model and Environment
In case of Walmart the business model is relies on effective price leadership and supply chain
management. The reason behind this is that the company used to sell its products at very low
cost to their customers. The pricing strategies used is termed as EDLP it means that every day
low price. Walmart has its very wide range of distribution centres with the total capacity of 7100
companies which has owned trucks. The company is having total net sales of $ 495 as in
January 2018 and more than $4.5 billion has come from their memberships and other income
sources. It operate their business by following major three primary units that consist of Walmart
U.S that usually provide a net sales of 64%, international business collection is about 24% and
rest are come from Sam’s club with 12% of net sales (Conger, Pratt and Loch, 2013).
Walmart is serving a total of almost 260 million individual customers every week. The company
is using undifferentiated targeting strategies that can be used by huge business entity in order to
capture the international market. It has been seen that everyone is reliable for Walmart so that it
cannot use differentiation to maximum benefits in near future time. The company is asking to
their value customers in every area. In relation to the target customer in Walmart when it would
comes to their customer that ranges from 18 to 44 years.
In accordance to the targets large sectors will lead over Walmart in the 25 to 35 age as per the
demographic region. The scope of business for Walmart is very wide as they are looking to
expand their business operation in different location of the nation. They are responsible for a
valuable amount of growth and generating maximum revenue in near future (Hellweg and
Canals, 2014). The company is associated with promoting the dignity of people with the supply
of effective products to their close customers in long run. In order to determine the internal
strength of the company it is crucial to make of below mentioned strategies:
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SWOT Analysis
By the help of this analysis that tends to show internal position of Walmart that tends to analyse
sustainability position in the global market. It can help to improve their HR management
techniques to make changes in the overall performance on the company. This analysis used to
determine the company is having maximum long term success ability through aggressive
international expansion in retail sectors. The internal strategies used to represent essential
capabilities for such kind of expansion.
Strength:
 Walmart is having repurated brand value as its name has been recognised through the
world as it is taken into account as the largest retailer with having most number of stores
and profit.
 The scale of business operations is afforded by Walmart as essential means that can help
in achieving better level of economies and increase sells by selling maximum number of
products. It is admired because of using advance technologies for inventory, better
customer relations and order tracking system. It means that company can make sure that
it could maintain regular follow of better quality of product at more economical cost to
the customers (Galliers and Leidner, 2014).
Weakness:
 There is certain limitation to this company as they experienced various lawsuits that are
associated with the treatment of employees that consist of discrimination and unequal
wages to their staffs and unfair promotion with the ineffective working condition. It has
been caused maximum on the retailers in more significant income and affect the brand
reputation at the same point of time.
 The company is having maximum employee turnover as well as lack of moral between
their current employees because of their lack of social roles and responsibility towards
their workers.
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 There are no any accompaniments experiences in shopping under Walmart with no
effective ambiance unlike the other retailers that can make the experience more
enjoyable for the company in longer period.
Opportunity:
 It has been seen that Walmart is having wide number of opportunity to offer more
western good to various developing nation that have more disposable income to purchase
the products. The company is still organising their brand by offering the value for
customer income (Wynn and Williams, 2012).
 The company is having effective plan that can help in other format which consists of
wide number stores with a large varieties of grocery store in order to compete with other
retail market by providing innovative grocery formats.
 It should also does certain planning with the private label items as acceptance grows for
such kind of products as an effective quality for their best alternative to the big
international brands.
Threat:
 There are certain threats which are faced because of competition that consist of
international retailers such as Costco, Amazon and Tesco. These kinds of retailers are
working on increase their organization more reliable to shrink the cost variation among
them.
 There are recessionary duration are still a major threat because the customer would still
required to spend minimum and not buy so many products even from a retailers such as
Walmart. It consists of certain electronics and entertainment products.
 It has also increasing social threats from domestic society that cannot like the Walmart
comes into their local areas and affect the small business owners with their economical
products (Leitão and Karnouskos, 2015).
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Porter’s Five Forces Analysis
Intensity of Competitive Rivalry
It is has been seen that the company is having strong forces in relation to the retail industry.
There are various companies of various sizes which is competing in the same industry
environment. It is having wide number of firms in the retail market which is strong forces for
Walmart. At the same time, it is having high aggressiveness of retail firms. It has experiences
positive forces with having external aspects that can define the competitive rivalry in the
supermarket sectors.
Bargaining Power of Buyers or Customer
In case of Walmart that can tend to faces the weak intensity of having bargaining power of their
buyer in retail sectors. This model determines the wide number of population of buyers that can
make it hard for them to impose significant impact on the firm performance. There are certain
external factors that are associated with the weak bargaining power of customers are large
population and having maximum diversity of consumers in the market. Individual buyers are
having negligible implication on the company’s international revenue (Peters and et.al., 2016).
The effect is shown in the company performance as bargaining power is weak that can impact
the overall growth of the retail sector.
Bargaining Power of Suppliers
It has been analysed that the company is having weak intensity in the retail sectors. There are
various suppliers in the retail market. In accordance to the wide firms such as Walmart can
easily affect their suppliers. There are certain factors that are associated with suppliers are larger
number of suppliers in the market in narrow. There is tough competition seen in the suppliers
that can assist in certain implication in the overall growth and sustainability of the company.
The individual suppliers would have minimum impact on wide retailer such as Walmart. There
is high level of supply that makes it hard for limited space in the retail stores that could impact
the strategic growth in the company.
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Threat of Substitutes
In relation to this factor the company is having weak forces in relation to the substitute products.
Walmart tend of offers large varieties of products and services that is having few or very narrow
substitute available in the market. There are various crucial external factors that can impose the
weak threat of products against this company. Some of the products are readily available in the
stores. Moreover, the low range of substitute products are creating difficult for consumer to
move away from the product available from the close retailers such as Walmart. Few of them is
having more costly other the low cost products available in the store (Zadek, Evans and Pruzan,
2013).
Threat of New Entrants
It must be deal with the strong sectors of their threat of new entrants. There are certain small
retailers that can enter into the market and used to compete on the regular basis of location,
demand and conveniences. There are certain external factors such as moderate to upper cost of
brand value and low value of conducting business is stronger in relation to the market
competition. It is too costly to formulate a new entrant in the brand value. There are certain wide
numbers of entrant that have the essential financial advisor which has developed a strong value
to their customers.
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IT infrastructure of Walmart
The company is having extranet that helps to connect around 10000 suppliers to their buyers.
The system is basically covered a wide range of people. It is essential to determine the
aggressive commitment to determine return on investment. It has been seen that the company is
using gigantic data warehouse with 175 TB of information to serve the stores and other
requirements of the management. Maximum number of Wal-Mart system is valuable for plenty
of reason. It would tests the processes at maximum range of store. It develops maximum
sustainability to attain competitive advantage over their major companies through utilizing
effective system that can help in increase efficiency within an organisation. It would estimate
the upcoming trends of retail sector not only to report the previous events but to attain more
reliable success in near future (Awerbuch and Preston, 2012).
The company is using technology to get rid of most effective information out of their data
warehouses. In Walmart operation, information technology tends to play an eminent role in
enhancing customers through developing the Smartphone application. By the help of this
application it would allow the customer to order any order from this online shopping network, in
case the items are not available in the retail shop of the company. In the current point of time,
technology is becoming one of the crucial aspects in their everyday life. There are other benefits
that can assist in overall manufacturing as well as marketing of products in location of the
country. There are various potential benefits to the organisation which is having essential ability
to view certain changes in international market at very faster rate. This will assist in increasing
maximum growth opportunity in the field of digital sector.
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