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We Dedicate To All We Love the Most...
To the Creator,
To the Beloved of the Creator, the Greatest Teacher,
“Hazrat Muhammad Mustafa Sallalah o Alaih e Wa’aalehe Wassalam”
To The Source of Heaven,
To The Door of Heaven,
Our So Kind Teacher,
Sir Tasawur Javed
Page 2 WWa .Acknowledgement Apart from the efforts of me. I would like to show our greatest appreciation to SIR TASAWUR JAVED. The guidance and support received from all the members who contributed and who are contributing to this project. I am grateful for their constant support and help. the success of any project depends largely on the encouragement and guidelines of many others. was vital for the success of the project. I can’t say thank you enough for his tremendous support and help. I take this opportunity to express our gratitude to the people who have been instrumental in the successful completion of this project. Without his encouragement and guidance this project would not have materialized. I feel motivated and encouraged every time I attend his meeting.
Opportunities________________________________________________08 7. Strength ____________________________________________________07 5. Threats_____________________________________________________08 8. Introduction _________________________________________________04 2. Competitive Advantage with respect to information system___________ 11 10.___________________Table of Contents______________________ 1. Competitive Advantage ________________________________________05 3.Conclusion_________________________________________________ 13 Page 3 WWa . SWOT Analysis______________________________________________06 4. Weakness___________________________________________________08 6. Value Chain________________________________________________ 09 9.
Inc. Your zone. There are 3 different segments Wal-Mart US. when Sam Walton. Ever Start. EI Salvador. In the U. Canopy. Great Value. Protégé.300 facilities including Wal-Mart supercenters. Holiday Time. Kid Connection . Canada. Sam’s Club and International. 31. India. Honduras. Clear American. discount stores. [Ref 4] The mission statement of Wal-Mart states: "Our mission is to enhance and integrate our supplier diversity Programs into all of our procurement practices and to be an Advocate for minority. George. [Ref 2] Internationally. No Boundaries. Brazil. White Stag. operates more than 4. Parent’s Choice. Chile. United Kingdom and the United States.@ the office. Mainstays. on October 31. Gold’s Gym. Best Occasions. opened the company’s first store in roger. Color Place Douglas. Japan. Equate. Better Homes and Gardens.Introduction The Wal-Mart story began in 1962.500 minorityand women-owned business. Nicaragua. has remained remarkably strong during the recession. Special Kitty. ark. Ozark Trail. 2010."[Ref 5] Page 4 WWa . Mexico. [Ref 3] Through our supplier diversity initiatives. with $405 billion in revenues for the fiscal year ending Jan. Wal-Mart operates more than 4. Roy. [Ref 1] Major brands sold at Wal-Mart’s are Sam’s choice.000 additional stores in 15 markets worldwide. Lee Scott and Vice President is Laura Philips. the world’s largest retailer.S. Faded Glory.Wal-Mart (WMT).. Wal-Mart partners with more than 2. Fire Side Gourmet. 1969. Costa Rica. Neighborhood Markets and Sam’s Club warehouses. including Argentina. Market side.and women-owned businesses. But the company officially incorporated as Wal-Mart stores inc. Wal-Mart Stores. The current President and CEO of wall marts is H. Wal-Mart Family Mobile and World Table. Simply Basic. Guatemala.
To gain this competitive advantage company needs to lower its cost because the companies have to keep a profit margin and if they want to be cost competitive they have to lower their cost Page 5 WWa . Comparative advantage or cost advantage is a firm’s ability to produce a good or service at a lower cost than its competitors. The key to Wal-Mart’s success is its ability to keep costs and prices low. Wal-Mart is using first type of competitive advantage “cost advantage”. As it says Our goal is always to be the low price leader in every community where we operate. which gives the firm the ability sell its goods or services at a lower price than its competition or to generate a larger margin on sales. And its slogan communicates always low price and new logo save money live better also shows this. or the ability a firm has to outperform its industry rivals. Our customers trust us to have everyday low prices …there’s no need for “special sales” [Ref 13]. It can be gained by offering consumers greater value. There are two main types of competitive advantage and differential advantage.Competitive Advantage A competitive advantage could simply be defined as the advantage or ability a firm has over its rivals in the industry. either by means of lower prices or by providing greater benefits and services that justifies higher prices. There can be many types of competitive advantage including the firms’ cost structure. distribution network and customer support. A differential advantage is created when a firm’s products or services differ from its competitors and are seen as better than a competitor’s products by customers. product offerings.
It sells 40% of private brands which are produced through contracts with manufactures. Strengths: Wal-Mart is the world largest company in term of revenues. The system automatically detects the lower quantity and generates orders for suppliers. improving company success. Wal-Mart has efficiently used the information technology for tracking the goods on Wal-Mart stores shelves. The company covered most of the US market and having a huge market share. Wal-Mart started Satisfaction guaranteed programs promoting customer goodwill Customer feels very convenient to find most of the products under one roof.SWOT analysis of Wal-Mart SWOT analysis is a basic technique that is often used in strategic planning. It is well known for lowest cost products. Wal-Mart offers variety of products in their stores. Wal-Mart always keen to provide training to their employees to improve the customer service level. Supply chain management and logistics is one of the strengths of Wal-Mart. This allows Wal-Mart to utilize the just in time inventory concept and avoid the pilling up inventory to save the extra cost for maintaining inventories in the warehouses. organization development and identifying competitive advantage. Page 6 WWa .
it is able to provide customers with even better bargains to give confidence them to shop at Wal-Mart. Customers are also curious about security due to terrorism. the mission statement does not clearly states the type of business Wal-Mart is in. Page 7 WWa . it should be updated time to time. A lot of retail organizations are leaving out of business due to the drop in disposable incomes. Wal-Mart does not have formal mission statement. Opportunities: Most of the International market are untapped specially the Asian countries. Due to the cheap rate that the organization is able to buy its products from suppliers. The market share is low outside the US market.[Ref 14][Ref 15].Weakness: The corporation is huge but still has in 14 countries. Competitors are imitating low cost strategy may weak the al-mart position. Wal-Mart policies are old fashioned. Wal-Mart facing difficulties in outside USA such as countries like china. Threats: • • • • • • • • Small towns do not want entry of Wal-Mart Bad media exposure for Kathie lee brand Substitute products more easily because of intense competition Wal-Mart is criticized several times by community groups The competitors are gaining control over international market Wal-Mart is competing in the market on low cost advantage. Although costumers agree that Wal-Mart provides the goods at lower prices but on the other hand they are also concerned about the poor quality of few products. This can help WalMart by growing its customer base due to the bargains that it can provide its customers. Wal-Mart gives very low profit margin to the supplier. Wal-Mart is criticized many times by the community groups.
[Ref 8] Mastered largescale “crossdocking” [Ref OPERATIONS • Easily replicable model Flexible floorplan Only real-time inventory and sales tracking system High sales per square foot OUTBOUND LOGISTICS • Trucks never return with an empty truck Two step hub and spoke distribution system MARKETING & SALES • “Always Low Prices.Wal-Mart Value Chain INBOUND LOGISTICS • Real-time data of inbound and in-progress inventory data Conveniently location of all highly automated distribution facilities Majority of inventory flows through distribution Centers Own trucking fleet – largest in US. Always. live better [Ref 4] Community involved Self service Cash and carry Credit SERVICE • Welcomin g environm ent with “Greeters ” • Quick response • • • • • • • • • • • • • 16] Page 8 WWa .” Save money.
4% Cross-border relationships with China Page 9 WWa . highly developed IT systems UPC.VMI and CPFR [Ref 22][Reef 23] Cross docking and World’s largest satellite system Real-time access to sales information from all stores PROCUREMENT • • • • Real-time connection with store inventories and suppliers Direct contact with suppliers.EDI.wages .great training program .job rotation and profit sharing program TECHNOLOGY DEVELOPMENT • • • Leading-edge. No single supplier accounting for more than 2.FIRM INFRASTRUCTURE • • Successful integration of activities in value-chain Maintain focus on brand and concept and bringing store-level concepts back to top • Relied on balance scorecard HUMAN RESOURCE MANAGEMENT • • Focus on the individual employees – empowering them as “associates” and equal feedback Competitive benefits .
g. Cross docking: ________________________________________________________________ For better logistic planning Wal-Mart is using cross docking. and location functions. but the main reason that prices are so low at Wal-Mart is because of the cost savings linked with the logistic planning. Wal-Mart delivers about 85% of its merchandises uses a cross docking system [Ref 16]. The integrated logistics planning at Wal-Mart focus on the costumer. [Ref 17][Ref 18] Here’s how it works: in a traditional warehouse. This is a misperception that the main reason prices are low at Wal-Mart is because of the purchasing power of this company. goods are received from vendors stored in devices like pallet racks or shelving. the logistics costs could lower profit margins. The costumer service levels are set so high at Wal-Mart that unless the logistic planning is well-coordinate between the inventory. Cross docking is a relatively new logistics technique and used in the retail and trucking industries to rapidly unite shipments from disparate sources and realize economics of scale in outbound transportation.Competitive Advantage with Respect to Information System More Competent Areas: ________________________________________________________ Analysis of Wal-Mart’s value chain shows that the more the more competent areas for WalMart are inbound logistic out bound logistics and technology development. In a Page 10 WWa . The idea is to transfer incoming directly to outgoing trailers without storing them in between. transport. workers pick it from the shelves and send it to the destination. When a costumer (e. the costumer or perhaps a retail outlet) requests an item. Cross docking favors the timely distribution of freight and a better synchronization with the demand where the distribution centers essentially acts as a high throughput sorting facility. Cross docking has enabled Wal-Mart to achieve economies of scale which reduces its costs of sales.
[Ref 8] [Ref 20][Ref 21] So in this way information system is helpful is gaining competitive advantage for Wal-Mart. This is a contributing factor to allow Wal-Mart to offer lower prices. who then knows to include a replacement in the next shipment (usually that day) to the nearest distribution hub. Cross docking is one way Wal-Mart reduces its cost of sales by 2-3%. Each register is directly connected to a satellite system and sales information is instantly relayed to Wal-Mart’s headquarters and distribution centers. Page 11 WWa . Put simply. Telephone cost is cut down by 20 to 30% by using this network. This degree of connectivity allows rapid response to inventory needs. Instead of goods spending valuable time in the warehouse.cross dock. Each store manager communicates via the satellite network with other managers to discuss sales and market trends and strategies.000 vendors. a message is automatically set to the supplier of that item. they are crossed from one loading dock to another in 48 hours or less. goods arriving from the vendor already have a costumer assigned .000 suppliers. and reduces dramatically the amount of inventory required. Wal-Mart’s Information Network: _______________________________________________ Cross docking requires continuous contact among Wal-Mart distribution centers suppliers and every point of sale in every store to ensure that orders can flow in and be consolidated and executed within the matter of hour so Wal-Mart operates a world’s largest private satellite communication system that daily sends points of sale data directly to Wal-Mart’s 4. With cross docking the costly inventory function of a distribution center becomes minimal Wal-Mart has over 65. so workers need only move the shipment from the inbound trailer to an outbound trailer bound for the appropriate destination. as each store sells an item. [Ref 19] It also helps them to cut down the labor and other handling costs involved in loading and unloading of goods.
available from http://mba.pk/url?sa=t&source=web&cd=4&ved=0CCwQFjAD&url=http%3A%2F%2Fwww.dartmouth. Wal-Mart Stores.com/pr/news/fastfacts.com/pressroom/news/6108.edu/cgl/research/case_studies. Lang. 2000.com.google. Canada.org/wiki/List_of_Wal-Mart_brands 3) http://walmartstores.uk/mission-statements/wal-mart-mission-statement.com/p/articles/mi_m3092/is_n3_v27/ai_6333369/ 8) Professor Vijay Govindarajan and Julie B.target.2005 Teaching Case: WAL-MART and Vancouver.aspx 2) http://en. the use of information systems can be a contributing factor to gain competitive advantage.org.aspx Page 12 WWa .Conclusion It is concluded that for the survival of a company. References 1) http://walmartstores. Either the company is large or small. Inc.aspx 4) http://www. it is necessary to get a competitive advantage especially in this era of competition. available from http://www.pdf&rct=j&q=hub%20and%20spoke%20system%20of%20walmart%2Bpdf&ei=VeRLTYq LO4HKhAfNwZi-Dg&usg=AFQjCNH2hw6N7BJcYbuer71gdstt6bvSyA 10) http://pressroom.com/aboutus/7603.org%2Fpdfs%2FSusanne_van_der_Porten__Wal_Mart_case.tuck.wikipedia.samples-help.com/ 5) http://www. It is analyzed that technology is playing a vital role in gaining competitive advantage.c aseplace.walmart.html 9) Suzanne vonder Porten.htm 6) http://findarticles.
com/business/strategic-management/1846-wal-mart-swotanalysis.com/7659.htm 12) http://seattletimes. Mahoney.html 17) http://logistics. and Replenishment (CPFR) as a Relational Contract: An Incomplete Contracting Perspective.com.Supply Chain Management.html 15) http://www.edu/geotrans/eng/ch5en/conc5en/crossdocking.com/browse/Cross-docking 20) http://findarticles.reference.nwsource.aspx?newsnum=794 22)http://findarticles.com/swot/walmart-swot.11) http://www.google.searsholdings.com/article.com/od/tacticalsupplychain/a/cross_dock.com.google.html 13) http://walmartstores.aspx 14) http://marketingteacher.com/html/businesstechnology/2003790031_costcohawaii15.com/p/articles/mi_m3092/is_n3_v27/ai_6333369/ 21) http://www.about.col1 23) Sung Min Kim Joseph T.available from http://www.3/e page 57.com/p/articles/mi_m3092/is_n12_v31/ai_12398577/pg_2/?tag=content.html 16) http://people.Collaborative Planning.pk/search?hl=en&biw=1345&bih=558&q=CPFR+in+walmart&aq=f&aqi=&aql=& oq= Page 13 WWa .hofstra. Forecasting.smthop.available from http://books.pk/books?id=rtjvMOO_1X4C&pg=PA57&lpg=PA57&dq=efficient+use+of+information+te chnology+by+walmart&source=bl&ots=i5LjFlrgnQ&sig=r8nGjf1Anz1zpvnsP3RgBHaOCRU&hl=en&ei=JupLTaHuAYH QhAeK7PCLDw&sa=X&oi=book_result&ct=result&resnum=5&ved=0CDIQ6AEwBA#v=onepage&q&f=false 19)http://www.soopertutorials.com/careers/opportunities/stores/kmart.htm 18) Chopra.
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