1.

Briefly describe one example of a firm that appears to have done a good job in balancing their e-
business distribution network with their “brick and mortar” distribution store network. Use at least
four criteria from the e-business scorecard in the text to justify your response.

Walmart has done a good job of balancing its online and retail store network by innovating in the areas
of (but not limited to):

A) Information: Walmart used information technology to track and understand consumer behavior from
an early age. According to Sam Hornblower of Frontline: “In 1985, Walton and his chief lieutenant, David
Glass, began developing a program called Retail Link. The software, and the hardware that went along
with it, took years to perfect, eventually costing $4 billion. This revolutionary system delivered
sophisticated information on consumer behavior, drawn from the data imbedded in the barcodes that
passed through checkout counters.” (Matthews, 2012). This software and approach to deciphering
consumer behavior has expanded Walmart’s ability to partner with, and exert control over, its suppliers.
Hornblower adds that “At the heart Walmart’s offer to share its software program was a Faustian
bargain for suppliers: Use our Retail Link program, play by our new rules and we will be your gateway to
sales beyond your wildest dreams. Or refuse, and be shut out of America’s dominant retail chain. In fact,
by sharing Retail Link, Walmart gained command over its suppliers and effectively penetrated their
executive decision-making” (Matthews, 2012).

B) Product availability: As online and offline retail operations become more tightly knit, as customers
purchase online and pick up in stores, or place web orders while roaming store aisles, Walmart thinks it
has a competitive advantage. “With over 4,500 stores, we are within 10 miles of nearly 90% of all
Americans,” Greg Foran, Walmart’s new CEO of its U.S. business, told investors last week in a strategic
update on Walmart’s U.S. operations. “As we continue to expand, that equation becomes even more
fascinating. That is a competitive advantage.” (Zaroban, 2015). The reason is because the many
Americans who live near a Walmart could save on shipping costs and pick up web purchases at their
local store before an online-only competitor like Amazon.com could have that same purchase shipped to
their home.

C) Flexible pricing, portfolio, promotions: Walmart is offering a discount of $10 on shoppers’ first order
of $50 or more at some stores to entice customers to purchase their groceries online as part of a test
phase of some locations. The grocery delivery system is not online; customers order online and pick up
their order in the store. In Bentonville, Ark., the pickup location is a standalone grocery pickup store,
separate from a regular Walmart building.

D) Facilities: Walmart helped shape the physical landscape of the US retail industry. Thanks in part to the
Walmart format, Americans have demanded bigger stores that had to be built on the outskirts of small
towns or in the suburbs of large cities. The same drive for greater selection and low prices that made
Walmart so successful must be balanced as online sales take a larger share of retail sales. I think the
more recent articles of this post demonstrate how Walmart is now taking advantage of its large stores
to also serve the online customer community by facilitating same-day pick-up of online orders.

Sources:

Chopra, S., & Meindl, P. (2012). Supply chain management: strategy, planning, and operation (5th ed.).
Boston: Pearson.
Geier, B. (2015, March 26). Walmart Is About to Change the Way You Shop. Retrieved January 28, 2016,
from http://fortune.com/2015/03/26/walmart-order-online/

Matthews, C. (2012, June 29). 10 Ways Walmart Changed the World. Retrieved January 28, 2016, from
http://business.time.com/2012/07/02/ten-ways-walmart-changed-the-world/

Zaroban, S. (2015, April 15). The new head of Wal-Mart U.S. says stores are key to winning customers
online. Retrieved January 28, 2016, from https://www.internetretailer.com/2015/04/15/wal-mart-
stores-are-key-winning-customers-online