Strategic Advantage Through Innovation

Mechanism- Complexity
Submitted to Dr. Jagadeesh Raj

By Group- 3 Gowtham K R (11019) Narasimhan Keshav (11032) Vipin Bajaj (11060) Rajanikar Kumar (11103) Sunithi Agarwal (11175)

Mechanism- Complexity
- Developing Complex Product or Service that gains competitive advantage over others. - Molybdenum-silicon-boron (Mo-Si-B) alloys used in jet engines operate. - Supply chain management model at Wal-Mart and Inventory Management Model of Dell Inc. - Jet engine developed by Rolls Royce

Other Mechanisms
1. 2. 3. 4. 5. 6. 7. Novelty in Product or Service offering Novelty in Process Add to/extend range of competitive factors Timing- First Move Advantage & Fast Follower Advantage Robust/Platform Design Rewriting the rules Legal Protection of Intellectual Property

Complexity Wal-Mart
Wal- mart owes much of its success and expectation for future growth to its advanced information system and complex supply chain management system Reasons for success of Wal-Mart:- Efficient distribution network - hub and spoke distribution system - Economies of scale - Everyday Low Prices Strategy - large fleet of company owned trucks - Cross-Docking warehousing system - Electronic Data Interchange (EDI), TransMan (Transport Management Software), Universal Product Code (UPC), use of satellite communication

Wal-Mart
How Wal-Marts distribution strategy yields competitive advantage ?

- Distribution Operating Leverage - Infrastructure Ownership/Control and Flexibility - Distribution Ubiquity/Customer Proximity

CASE -Walmart
Wal-Mart is more than just the world's largest retailer. It is an economic force and a cultural phenomenon. Sam Walton opened his first five-and-dime in 1950. His vision was to keep prices as low as possible. Today Walmart is without question the most successful retailer in the history of the United States, and in the history of the entire world by almost any measure (number of stores, sales revenue, number of employees, market share, etc.).

CASE -Walmart
Walmart began with the goal to provide customers with the goods they wanted when and where they wanted them.
Walmart then focused on developing cost structures that allowed it to offer low everyday pricing. Walmart then concentrated on developing a more highly structured and advanced supply chain management strategy to exploit and enhance this competitive advantage.

Wal-Mart Strategy
Everyday Low Prices (EDLP) Strategy Wal-Mart pushed the retail industry to establish the universal bar code, which forced manufacturers to adopt common labeling. The bar allowed retailers to generate all kinds of information - creating a subtle shift of power from manufacturers to retailers. Recently, Wal-Mart became the first major retailer to demand manufacturers use radio frequency identification technology (RFID).

Wal-mart- Managing the Supply Chain

Walmart has been able to assume market leadership position primarily due to its efficient integration of suppliers, manufacturing, warehousing, and distribution to stores. Walmarts supply chain begins with strategic sourcing to find products at the best price from suppliers who are in a position to ensure they can meet demand Technology plays a key role in Walmarts supply chain, serving as the foundation of their supply chain.

Benefits of Efficient Supply Chain

Wal-Marts supply chain management strategy has provided the company with several sustainable competitive advantages lower product costs reduced inventory carrying costs improved in-store variety and selection, and highly competitive pricing for the consumer As technology evolves, Walmart continues to focus on innovative processes and systems to improve its supply chain and achieve greater efficiency.

TECHNOLOGY MANAGEMENT
Technology plays an important role in Wal-Marts supply chain, serving as the foundation of their supply chain Fully automated Cross-Docking system Worlds largest private satellite communications Universal Product Code (UPC) Green Supply Chain Running their stores on 100% renewable energy Implementing a zero waste system Introducing or redesigning products that sustain people and the planet Supplier Energy Efficiency Program (SEEP)

TECHNOLOGY MANAGEMENT Cntd..

Energy Management System (EMS) LED refrigerated case lighting technology Daylight Harvesting- Many Wal-Mart stores and distribution Secondary Loop Refrigeration System Indirect Evaporative Cooling with Radiant Flooring

LIMITATIONS of the mechanism

Volume and Scale of operation Huge Dependence on IT systems Need for Infrastructure Space requirement Cross Docking

PREREQUISITES for following wal-mart supply chain model

Collaborative Planning Forecasting and Replenishment (CPFR) Efficient Inventory Management Robust IT infrastructure Build on your own through strong R&D activities Hub and Spoke Model Leverage Selling General and Administrative Expenses (SG&A)

Thank you