Wal Mart Case Study Part 1 & 3


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Wal Mart Case Study Part 1 & 3

  1. 1. Wal-Mart Case Study http://walmartstores.com/AboutUs/7603.aspx
  2. 2. Introduction http://walmartstores.com/AboutUs/7603.aspx
  3. 3. Wal-Mart’s Forty-six Year History <ul><li>1960s: </li></ul><ul><ul><li>Sam Walton opens first discount store in Rogers, AK </li></ul></ul><ul><ul><li>24 stores in Arkansas with $24 million in sales </li></ul></ul><ul><ul><li>Two stores open outside of Arkansas in Missouri and Oklahoma </li></ul></ul><ul><ul><li>Wal-Mart is incorporated </li></ul></ul><ul><li>1970s: </li></ul><ul><ul><li>Home office and Distribution Center opens </li></ul></ul><ul><ul><li>Company is listed on the Hew York Stock Exchange </li></ul></ul><ul><ul><li>Acquires 16 Mohr-Value stores and Hutcheson Shoe Company </li></ul></ul><ul><ul><li>276 stores, 21,000 employees, and $1.248 billion in sales </li></ul></ul><ul><li> </li></ul>http://walmartstores.com/AboutUs/7603.aspx
  4. 4. Wal-Mart’s Forty-six Year History (cont.) <ul><li>1980s: </li></ul><ul><ul><li>Sam Club opens and Largest distribution center opens to-date </li></ul></ul><ul><ul><li>Acquires Kuhn’s Big K, Grand Central Shoes, and Woolco stores </li></ul></ul><ul><ul><li>Forbes magazine ranks Wal-Mart #1 retailer for eight years straight </li></ul></ul><ul><ul><li>882 stores, 104,000 employees, and $8.4 billion in sales </li></ul></ul><ul><ul><li>Wal-Mart Satellite Network (largest private satellite communication in U.S. linking all facets of company operations) </li></ul></ul><ul><ul><li>Celebrates 25 th anniversary </li></ul></ul><ul><li>1990s: </li></ul><ul><ul><li>Opens stores in Mexico, Puerto Rico, Canada, Argentina, Brazil, Germany and England </li></ul></ul><ul><ul><li>Acquires Western Merchandisers, Pace Warehouse Clubs, Woolco, Interspar, Wertkauf, and ASDA Group </li></ul></ul><ul><ul><li>1,995 stores, 1,140,000 employees, 239 super-centers, 433 Sam’s Club, 276 international stores, and $105 billion in sales </li></ul></ul>http://walmartstores.com/AboutUs/7603.aspx
  5. 5. Wal-Mart’s Forty-six Year History (cont.) <ul><li>2000s: </li></ul><ul><ul><li>Fortune magazine ranks Wal-Mart 5 th “Global Most Admired All-Stars” </li></ul></ul><ul><ul><li>Hispanic Business magazine ranks Wal-Mart in “Top 25 Diversity Recruitment Programs” </li></ul></ul><ul><ul><li>Owns 95.1% share in Seiyu stores, Japan </li></ul></ul><ul><ul><li>6,200 facilities globally, 1.6 million employees, and $345 billion in sales </li></ul></ul><ul><ul><li>Joint-venture with Bharti Enterprises, India – est. Bharti Wal-Mart Private Limited </li></ul></ul><ul><ul><li>Opens stores in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and South Korea </li></ul></ul><ul><ul><li>3,000 th international stores opens in Sao Paulo, Brazil </li></ul></ul>http://walmartstores.com/AboutUs/7603.aspx
  6. 6. CIO Affecting Change Wal-Mart’s Affect on the Retail Industry http://walmartstores.com/AboutUs/7603.aspx
  7. 7. CIO/Wal-Mart Affects Industry Change <ul><li>Sam Walton distrusted information technology </li></ul><ul><li>Chief Information Officer: Rollin Ford who also serves as the Executive Vice President of Logistics and Supply Chain, takes command in 2006 </li></ul><ul><ul><li>Implemented radio frequency identification (RFID) for all products distributed to Wal-Mart and Sam’s Club stores </li></ul></ul><ul><ul><li>Raised the standard for vendors and suppliers through global supply chain transformation </li></ul></ul><ul><ul><li>Companies that do business with Wal-Mart must operate on the RFID global supply chain concept of Wal-Mart </li></ul></ul><ul><ul><li>Rollin’s and Wal-Mart’s innovate use of information technology raise retail industry standards for excellence and efficiency </li></ul></ul>http://walmartstores.com/AboutUs/7603.aspx
  8. 8. Wal-Mart Specific Questions
  9. 9. Wal-Mart – Software Development <ul><li>Wal-Mart has a team of developers to create most software needed by the company. </li></ul><ul><li>Before the development of every software, the developers works on the functional areas that will be affected by it. </li></ul>
  10. 10. Should Wal-Mart continue to rely on developing its own software? <ul><li>Big companies such as Wal-Mart need very specific software which probably will not be available on the market. </li></ul><ul><li>The best way to develop a software that exactly meets the company's requirements is to use in-house development. </li></ul><ul><li>With in-house development, the maintenance will be easier since the knowledge used to create the software is kept within the company. </li></ul><ul><li>Wal-Mart does not want to be help hostage by the software vendor. </li></ul><ul><li>Adjustments on third party companies can be more expensive than in-house development for applications with the complexity demanded by Wal-Mart. </li></ul>
  11. 11. What are the benefits and costs to having developers work in a functional area before creating its own software? <ul><li>Most software developments are targeted to make user's life easier or to speed up tasks. </li></ul><ul><li>The best way to develop a software is to understand the user's need. </li></ul><ul><li>If the developer works in a functional area he will understand most of the requirements of the software. </li></ul><ul><li>The additional days that the developers worked on the functional area will be compensated with the lesser need of adjustments and maintenance in the future. </li></ul>
  12. 12. Wal-Mart - Current and Future Trends and Technology <ul><li>Wal-Mart is known to be always on the leading edge of the technology </li></ul>
  13. 13. Why are some people upset about RFID tags? Are their fear justified? <ul><li>The main issue raised about the RFID is privacy. Some people fear that the RFID can be used to farther away than its intent. </li></ul><ul><li>RFID items can be read after the item leaves the store. Then, RFID scanners could also be used to scan all items someone have at their home that uses the RFID technology. </li></ul><ul><li>Lewan describes in his article that Mark Rasch, former head of the computer-crime unit of the U.S. Justice Department, states that there is a possibility of unauthorized people learning about who you are, what you have bought, how and where you have bought your items. </li></ul><ul><li>Mark Rasch adds that thieves can scan car trunks, garages and offices from a distance. </li></ul><ul><li>In addition, he mentions that even third party companies and the government can use to learn about you. </li></ul><ul><li>These statements strongly support any fear of the uncontrolled use of this technology. </li></ul>
  14. 14. What does the UCCnet project do and why it is so important to retailers? <ul><li>UCCnet is a subsidiary of the Uniform Code Council that provide a way of companies to register item data and share standardized information between their vendors. </li></ul><ul><li>Companies, such as the Wal-Mart, have systems that maintain their inventory and connect with the products suppliers alerting when a product needs to be shipped. </li></ul><ul><li>Most companies use different set of data for their products. The UCCnet provides an industry-wide standard for data, making possible the integration of different systems. </li></ul><ul><li>Without this synchronization, it would be extremely difficult to connect two company's systems. </li></ul>
  15. 15. Why did Wal-Mart stop selling some transaction data and will it affect the company in the future? <ul><li>Wal-Mart sold its transaction data to companies, such as drug manufacturers, in 2001. </li></ul><ul><li>Wal-Mart saw that the competitors were taking advantage of this data. </li></ul><ul><li>Since, this information was more valuable to competitors than the price that Wal-Mart was charging, the Wal-Mart decided to stop this data. </li></ul><ul><li>This should not affect the Wal-Mart, since it is a very big company and the money they made selling transaction data was only a fraction of their income. </li></ul>
  16. 16. What is the role of Wal-Mart's Web site? Is it a useful tool? <ul><li>The role of Wal-Mart's Web site is to follow the technology trends with the e-commerce. </li></ul><ul><li>Wal-Mart's website is useful since many users can buy products directly through the website or search for items that he might need on the next visit to the store. </li></ul><ul><li>The website is being so used, that on 2006, the website suffered from visitors overload on the Black Friday. </li></ul>