Presentation

Presenting Wal Mart

History of Wal Mart

The great American retail giant Wal-Mart was founded in the early nineteen sixties [1962] by Mr. Sam Walton and his brother bud Walton, after years of owning the Ben Franklyn variety stores.
Wal-Mart Stores, Inc. is not only the largest retailer in the world; it now also ranks as the largest corporation in the world. The retail giant dwarfs its nearest competition, generating three times the revenues of the world's number two retailer, France's Carrefour SA. Domestically, Wal-Mart has more than 1.2 million workers, making it the nation's largest nongovernmental employer.
Wal- Mart inc. as grown into a great conglomerate, with several subsidiaries which includes, the Sam’s club, Wal-Mart super centers, Wal-Mart neighborhood super markets and several international subsidiaries.
The company was founded on the revolutionary philosophies of excellence in the workplace, customer service and always having the lowest prices. “We have always stayed true to the Three Basic Beliefs Mr. Sam established in 1962: 1. Respect for the Individual. 2. Service to Our Customers. 3. Strive for Excellence
the following are important key dates to be noted in the company’s history, growth, and development ‘

1970: Wal-Mart stock begins trading over the counter.

1972: The Company’s stock is listed on the New York Stock Exchange.

1979: Revenues surpass $1 billion; the company is the fastest to reach this milestone.

1983: The first Sam's Wholesale Clubs are opened; they are later renamed Sam's Clubs.

1988: The Company opens its first Wal-Mart Super centers, combined discount outlets and grocery stores.

1990: Wal-Mart becomes the largest retailer in the United States.

1991: Foreign expansion begins with the creation of a joint venture with Cifra, S.A. de C.V., Mexico's largest retailer.

1998: The first Wal-Mart Neighborhood Markets are opened in the United States; 74 Inters par hypermarkets are acquired in Germany.

2003: Fiscal 2003 revenues of $244.52 billion make Wal-Mart the world's largest corporation.

The above are important key dates to be noted in the company’s history, growth, and development ‘
The company’s, information technology approach of early adopters as giving the corporation an unsurpassable edge over its competitors as the company is never scared to try new technology, and is constantly investing in the new technology through its MIS department this as helped the company in its incredible growth, and rapid expansion.


CEO of Wal-Mart

The CEO of Wal-Mart is Michael Terry Duke. An American businessman, he was born in 1949. In February 2009, Duke became the fourth chief executive officer of Wal-Mart. He earned a BS in Industrial Engineering from the Georgia Institute of Technology in 1971. He has 23 years of experience in retailing with Federated Department Stores and May Department Stores. He served as Chief Executive Officer and President of Wal-Mart International since October 2005. He served as the Chief Executive Officer and President of Wal-Mart Stores USA (Mart Stores Division) since April 25, 2003. He also served as an Executive Vice President of Wal-mart Stores Inc., from April 25, 2003 to September 2005 and as its Executive Vice President of Administration from 2000 to April 25, 2003. From March 2000 to July 2000, he operated as an Executive Vice President of Logistics at Wal-mart Stores Inc. From March 1996 to March 2000, he served as a Senior Vice President of Logistics at Wal-mart Stores Inc. Prior to March 1996, Duke served as a Senior Vice President of Distribution of Wal-Mart Stores Division (USA). He handled full operating responsibilities for all of Wal-Mart Stores Division (USA)'s International operations including Argentina , Brazil , Canada , China , Costa Rica , El Salvador , Germany , Guatemala , Honduras , Japan , Mexico , Nicaragua , Puerto Rico , South Korea and the United Kingdom . He operated as Vice Chairman of Wal-Mart International since October 2005 and served as Vice Chairman of Wal-Mart Stores Inc. until February, 2009. He also performed as Vice Chairman of Wal-Mart Stores USA since April 25, 2003. Duke has also been a Director of Wal-Mart International Division of Wal-mart Stores Inc., since October 2005 and a Director of Wal-Mart Stores Inc. since November 2008. He serves as an External Director of Seiyu Ltd. He serves on the Board of Directors of Arvest-Bank of Bentonville, the Retail Industry Leaders Association. He served as Director of Wal-Mart de Mexico SAB De CV (Wal-Mart de Mexico SA) since 2006.

Business Strategy

Which of the 4 generic business strategies is used? If differentiation, then how do they differentiate their services/products?
Wal-Mart’s slogan is “Always Low Prices” and “Every Day Low Prices” this accurately described the strategy of overall cost leadership. For everything from women’s lingerie to car batteries, Wal-Mart’s focus is on offering the same products as the competition but at a lower price. Wal-Mart relies on an IT-enabled tight supply chain management system to squeeze every penny possible out of the procurement, distribution, and warehousing of its products. It uses sophisticated business intelligence system to predict what customers will want and when. This is an example of overall cost leadership. They offer the same or better quality products or service at a price that is less than what any of the competition is able to do.
Wal-Mart's job is to bring product from the dock to the customer's trunks in as little as 72 hours. It has a distribution network of over 100 centers nationwide. This provides efficiencies for the retailer. Most people think it’s buying at the lowest price but, they actually concentrate on the lowest distribution costs.
In every supply chain there are multiple intermediaries that aid in getting the product or service from the manufacturer to the consumer. The only challenge here from a business standpoint is that as a result the amount of profit potential possible to the eventual retailer is small compared to what they otherwise would get to keep if they owned the whole distribution chain like Wal-Mart.
With the advent of the internet a lot more of the intermediaries that used to be deemed irreplaceable in the supply chain can now be replaced and their profit shifted elsewhere. Wal-Mart's business model eliminates the wholesalers and jobbers and lets them access the manufacturers more directly. This is why they are able to offer a wide range of products at very cheap prices.

If the products were allowed to pass through the hands of the other intermediaries then the price would have to go up because Wal-Mart would have to incur the cost of paying the jobbers and wholesalers. So distribution gives you the ability to access certain links in the supply chain based on your company's competitive advantage and eventually eliminate some of them so you can keep more of the profit.

How do Wal-Mart reduce the buyer and supplier power? How do they create switching costs and entry barriers?
By using Porter’s Five Forces Model, it contributes to Wal-Mart’s business strategy. Although, Wal-Mart has many competitors, their buyer power is low because they offer products at a much lower price. In the case of supplier power, Wal-Marts supplier power is low because they buy products from a wide range of suppliers. Wal-Marts threat of substitute products or services is high due to the fact that you can buy many of their products from similar retailers such as Target and K-Mart. However, Wal-Mart takes full advantage of the switching costs by offering the lowest prices for their products. It is difficult for new competitors to enter this type of market therefore the threat of new entrants is low. By, presenting many products all at low prices Wal-Mart establishes an entry barrier. The rivalry among existing competitors is high which is why Wal-Mart offers discounts and focuses on advertising strategies geared toward lowering prices.

What major business initiatives are used or being considered? What software is used? Are they top-line or bottom-line initiatives?
As a major business initiative, Wal-Mart is using the Supply Chain Management system. Wal-Mart has its stores all over the world and thousands of suppliers, to connect with those Suppliers. Wal-Mart is using the IT-based supply chain management system. This system also keeps tracks about inventory and information among business processes and across company. Supply Chain Management also focuses on quantity of product; indicate that the product is not too much and not too few.
Wal-Mart is using the RFID software called Radio Frequency Identification it helps to Improve supply chain management system.
Wal-Mart follows the bottom-line business strategy that helps them to keep their cost low, minimize their expenses, reducing the costs of human capital and also helps minimizing errors in process.

Business Article

Article Link
Summary of article

The above link contains an article that highlights Wal-Marts ability to rally during our current economic crisis. This article was posted on Bloomberg.com on 10/15/09.

According to the S&P 500, which is a division of McGraw-hill that publishes financial research and analysis on stocks and bonds, Wal-Mart has rallied the last 22 months. There shares were actually up at the end of each week.

Wal-Mart was able to do this because they practice overall cost leadership, which is offering the same or better quality products at a price that is less than what any of the competition is able to do. For them this has proven to be a great advantage. The current economic climate calls for everyone to be conscious of spending. The article suggests they are a recession proof company.

Wal-Mart peaked at 62.1 on 9/12/08, while financial giant Lehman Bros filed for Bankruptcy. Wal-Mart’s profit increased 5.3 percent this year, even as the U.S. gross domestic product shrank.

Technology

1. What are some files used in your company? What databases? What brand of database software?


Wal-Mart is a major retailer and relies on extensive databases to help with the management control of the everyday business operations. Wal-Mart utilize a number of databases due to the vast amount of data which needs to be managed, one of the main areas of information management is the inventory management system. Wal-Mart gained as a competitor with its up-to date inventory management system, being the first retailer to computerized inventory management and develop an integrated system (EDI) which places orders directly with the suppliers when stocks reached a certain level. This is a strategy which has been emulated by many retailers, and inventory management is an important aspect of ongoing operations. In order to manage this Wal-Mart utilize an Oracle Database, the databases one which meets the needs of Wal-Mart blast operations and the development of new technology with the latest version of Oracle® Ware house Management software being compatible with the radio frequency in its inventory management.



2. Who is responsible for the database? How do managers get reports? What types of reports?

Rollin Ford is the CIO of Wal-Mart; He would be responsible for the databases. The way that the database is used is key to the operating efficiency within the company. The company uses an Oracle database with a networked infrastructure supplied by Cisco. The oracle database which is fully scalable and can cope with the large size operations dealt with by Wal-Mart and literally hundreds of suppliers and thousands of products is a relational database which can be queried in a number of ways in order to provide information for different types of reports. The system is inter linked with Wal-Mart own database developed in the 1990’s. Additional ways for data base administrators to get reports are the use of the RFID or Radio frequency identification system. This system tracks inventory levels. Headquarters is enabled to conduct much deeper analysis of trends across all data and identify trends. This is system is similar to bar codes, but it’s much more efficient.



3. Is OLAP used? Is a data warehouse used? Are data marts used? Explain.

OLAP in conjunction with data warehouse database is used for analytical reporting both historical and current data. OLAP is used for data warehouse database in Wal-Mart databases to analytical reporting for different stores and locations of Wal-Mart. Wal-Mart uses data mart for building data warehouse for faster analytical reporting of the data. Wal-Mart uses different type’s reports for inventory control, Sales analysis, consumer analysis, trends items analysis and trends etc.



4. What types of data mining is used? Who is responsible? What software?

Wal-Mart uses predictive data mining techniques for its data ware houses database. In predictive data mining is used for different types of predictions of customer’s trends for managing its inventory and sales. Wal-Mart’s IT division managed by CIO Rollin Ford is responsible for data mining and data ware house. Wal-Mart has deployed NeoVista’s Decision Series(TM) suite of integrated data mining software into its legendary replenishment and decision support environment.

What are some hardware categories used in (or sold by) your company? What brands of computer? What types of computers?

As hardware categories Wal-Mart sell notebook, Desktops, camera, entertainment game such as Wii, X-box. Wal-Wart sells Dell, HP, and Sony Vio. Wal-Mart has Personal Computers and Laptop in store which is cheap compare to other retailers.


Who is responsible for the hardware and software?
Rollin Ford (CIO),his team and Database administrators are responsible for software and hardware.

What types of system software is used (sold)? Is Linux used?
Wal-Mart use Windows as their system software. Linux never used by Wal-Mart.

What types of application software is used (sold)? What brands?
Wal-Mart redesigns Walmart.com and starts using Web 2.0 and social networking tools. They have contracts with Oracle and Hewlett-Packard to use their price-optimization and Business Intelligence retail applications.

 SAS GIVES YOU " THE POWER TO KNOW "



Summary of the Article
SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions, SAS helps customers improve performance and deliver value by making better decisions faster. Wal-Mart uses their products and solutions software to gain Business Intelligence. They also provide business intelligence to a variety of customers, in hopes of obtaining more customers.


Business Intelligence is collective information about your customers, your competitors, your business partners, your competitive environment, and your own internal operations that gives you the ability to make effective, important and often strategic business decisions.

A very interesting fact about BI is, because of lack of information, processes, and tools, through 2012, more than 35 percent of the top 5,000 global companies will regularly fail to make insightful decisions about significant changes in their business and markets.

One of the things this article points out is business intelligence software is becoming more mainstream, free open-source alternatives to some of the company’s products are increasingly popular. On the other end of the spectrum, the heavyweights of the software industry — Oracle, SAP, Microsoft and, especially, I.B.M. — are plunging in and investing billions of dollars.

A free programming language and set of software tools for statistical computing, called R, has become increasingly popular at universities and labs. The company shifted course earlier this year and modified its software so programs written with R work seamlessly with SAS technology. This will help them leap into cloud computing.

Cloud computing is Software as a Service. Software as a Service delivers an application or group of applications to multiple users while being hosted on a remote machine and run through a browser. Cloud Computing is the most sweeping change is the company’s move toward the Internet model of software delivery — as a service that customers tap into over the Web, much as Google and other Internet companies do. SAS has dipped its toe in, with some initial products. But a major expansion is planned, supported by a sprawling $70 million data center scheduled to begin operating next year.

Network

1. What type of network do they have? What kind of interface do they use? What kind of medium? What type of communications software? What kind of connecting devices or components

Wal-mart uses both the internet and an intranet; the intranet is guarded against outside access. They use a customized interface that allows them to gain business intelligent from their customers. Along with customized software that helps them build there data banks, they use typical Microsoft software. The technical devices they use are the typical ones that allow them to communicate over TCP/IP. Typically they use a Wide area network s to connect, some of the components would be servers, routers and switches, network cards, linked with cat 5 cabling or 802.11 wireless connections.

2. How do they connect to the internet and at what speeds? Do they use Voice over IP?

Wal-mart connects over the internet using T1 lines and Voice over ip. T1 is a high speed circuit running at speeds up to 1.544 Mbps. Voice over IP allows you to send voice communications over the Internet and avoid toll charges. This helps keep the overhead down.

3. How do they apply the four principles of network security?
Wal mart uses the secure socket layer protocol, which creates a secure and private layer between a web client computer and a web server computer

• This system encrypts the information
• Then sends the info over the internet.
• This SSL protocol comes with a Verisign seal.
• They also use secure electronic transaction

A transmission security method that ensures transactions are legitimate as well secures.

Conclusion

In the late 1940s, when Sam Walton was franchising at Ben Franklin's variety store in Newport, Ark., he had a simple but momentous idea. Like any retailer, Walton was always looking for deals from suppliers. Typically, though, a retailer who managed to get a bargain from a wholesaler would leave his store prices unchanged and pocket the extra money. Walton, by contrast, realized he could do better by passing on the savings to his customers and earning his profits through volume. This insight would form a cornerstone of Walton's business strategy when he launched Wal-Mart in 1962.

Cost-cutting was, as one might also expect, an obsession in the Wal-Mart culture Wal-Mart uses supply chain management an IT-based system which is a critical necessity to ensure the smooth flow of inventory management. What it does for Wal-Mart is tracks inventory and information among business processes and across the company.

Wal-Mart uses Business Intelligence to enable the organization to extract the true meaning of information so that it can take creative and powerful steps to ensure a competitive advantage. By using OLTP Wal-Mart gathers the input information, processing that information, and updates existing information to reflect the gathered and processed information. Software aids in the data mining process.

Wal-Mart uses a warehouse with hundreds of terabytes of data to study sales trends and track inventory and other tasks. The system is also the foundation for Wal-Mart's Retail Link decision-support system that Wal-Mart's suppliers use to study item-level inventory and sales information. The chain has more than 6,000 stores, with some having almost a half-million SKUs each. Wal-Marts database tables have literally 100 billion rows. The retailers POS systems have to ring up some 276 million items, a day.

When learning about Wal-Mart there are some great strategies that should be mentioned. Wal-Marts supply chain management system focuses on squeezing every penny possible out of the supply chain. Wal-Mart is also careful to keeping the cost of purchased products at acceptable levels.

Wal-Mart focuses on Overall Cost Leadership, Bottom-line initiative along with the Run-grow transformation framework. Wal-Mart concentrates on maximizing Fulfillment, ensuring that the right quantity of products for sale arrive at the right time. Logistics, keeping the cost of transporting products as low as possible, they do this by owning their own trucks. When it comes to production they are careful to purchase from venders that insure quality. The concentration of revenue and profit ensures that no sales are lost because shelves are empty.

One of the things we found interesting about Wal-Mart is; Wal-Marts IT-enabled supply chain management system is the envy of the industry because it drives excess time and unnecessary costs out of the supply chain. So because Wal-Mart can buy low, it sells low. As a matter of fact, if your company wants to sell items to Wal-Mart for it to sell in its stores, you will have to do business with it electronically. If your company can’t do that, Wal-Mart won’t buy anything from you.

Saving people money to help them live better was the goal that Sam Walton envisioned when he opened the doors to the first Wal-Mart more than 40 years ago. Wal-Mart continues to lead the market in buying low and selling low.