Strategic Assessment of Wal-Mart for an ITM class - Essay Example

Strategic Assessment of Wal-Mart The world’s largest retailer Wal-Mart is currently facing too many strategic problems and they are struggling to compete effectively with its competitors. Nobody has any doubt about the capacity and resources of Wal-Mart. However in recent times, its sales growth has come down drastically. “Recently, Wal-Mart actually pulled out of Germany and South Korea.  In other important countries, such as China, Wal-Mart is behind in market share to European competitors like Tesco and Carrefour” (Problems at Wal-Mart).

 Some people argue that the major culprit for the current problems in Wal-Mart is its CEO Mike Duke and his visionless strategies. Many others are of the view that the current problems were because of Wal-Mart’s failure to incorporate state-of-the-art IS/IT technologies in its operations. Being a business technology consultant hired by Wal-Mart, I do believe that Wal-Mart is in trouble mainly because of its failure to incorporate suitable IS/IT technologies in its activities. Offline businesses are currently giving way for online businesses or e-commerce.

It is important for Wal-Mart to give more attention to online businesses. “Wal-Mart has assembled a team of 70 developers, computer engineers and researchers — dubbed @WalmartLabs — in an aggressive attempt to position itself at the forefront of social and mobile commerce” (Wal-Mart: The Next Tech Giant?). However, its e-commerce platform still needs more fine tuning to attract more visitors. Just like Amazon and Google, it is better for Wal-Mart to enter into the search engine business so that it can expand its business portfolios as well as enhance its retail business.

Shopperception is a new IT related technology evolved out in recent times to check the consumer behaviours and buying habits. “Shopperception recognizes the customers when they check-in and it remembers previous buying habits and can predict what the customer is likely to want on this visit” (Israel). Wal-Mart should use this technology extensively in its retail outlets to help the consumers. “The Wal-Mart network, connecting more than 2,400 stores and 100 distribution centers worldwide.

At Wal-Mart, we dont implement technology for its own sake," says David Flanagin, Director of Network Engineering” (The Wal-Mart Story, p.1). From the words of David, it is evident that Wal-Mart is not much keen in using technologies to improve the efficiency of its global activities. It should be noted that efficient working of a supply chain is necessary for Wal-Mart to maintain adequate inventory in its warehouses or stores all over the world all the time. Wal-Mart is currently facing lot of supply chain management problems because of the lack of coordination between its central office and branch offices.

“Successful inventory management, an important part of maintaining low prices at Wal-Mart, requires up-to-date information about sales as well as good communication with suppliers” (The Wal-Mart Story, p.1). Web based applications on a proper network may help Wal-Mart to rectify its supply chain problems. “To complement the supplier focus of Retail Link, Wal-Mart supports Pipeline, its company-wide intranet. Pipeline delivers information, including company news of the day, policies, and procedures, to more than 950,000 associates” (The Wal-Mart Story, p.2). Wal-Mart is keen in using joint venture as its mode of entry to foreign markets.

In other words, they have increased belief in seeking the help of local companies to expand its business all over the world. For example, India is one of the rapidly emerging markets in the world. As a mode of entry to this country, Wal-Mart has established a joint venture with Indian local company; Bharti group. It is extremely important for Wal-Mart to improve its communication with its associates all the time. For that purpose, web based technologies may help them very much. Utilization of proper IT technologies may help Wal-Mart to improve customer satisfaction, low pricing and shopping experience.

It is believed that global wealth is shifting from American and European regions to Asian region at present. India, China and South Korea are some of the rapidly emerging economies in Asia. Wal-Mart should give more attention to business opportunities in Asian region in future. Its present business philosophy of establishing joint venture as a mode of entry seems to be not working properly. Wal-Mart should consider establishing independent business units in emerging markets and for that purpose increased use of IT/IS technology is necessary.

Works Cited 1. Israel Shel. “How Walmart and Heineken Will Use Shop perception to Put Your In-store Experience in Context”. 2013. Web. 07 February 2013. 2. “Problems at Wal-Mart”. 2007. Web. 07 February 2013. 3. “The Wal-Mart Story”. Web. 07 February 2013. 4. “Wal-Mart: The Next Tech Giant?”. 2011 Web. 07 February 2013.