PROJECT ON VALUE CHAIN ON WAL-MART

MANAGEMENT INFORMATION SYSTEMS ASSIGNMENT ON VALUE CHAIN, COMPETITIVE ADVANTAGE AND ORGANIZATIONAL INFORMATION SYSTEM OF

BY, VIGNESH.R 10PGDM F 39

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PROJECT ON VALUE CHAIN ON WAL-MART

CONTENTS: INTRODUCTION ON INFORMATION SYSTEM VALUE CHAIN SYSTEM

WAL MART INTRODUCTION ORGANIZATIONAL IS VALUE CHAIN SYSTEM FINANCE REPORT COMPETITIVE ADVANTAGE COMPETITIVE STRATEGY

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PROJECT ON VALUE CHAIN ON WAL-MART

INTRODUCTION ON:INFORMATION SYSTEMS An integrated set of components for collecting, storing, processing, and communicating information. Business firms, other organizations, and individuals in contemporary society rely on information systems to manage their operations, compete in the marketplace, supply services, and augment personal lives. For instance, modern corporations rely on computerized information systems to process financial accounts and manage human resources; municipal governments rely on information systems to provide basic services to its citizens; and individuals use information systems to study, shop, bank, and invest. VALUE CHAIN SYSTEM To analyze the specific activities through which firms can create a competitive advantage, it is useful to model the firm as a chain of value-creating activities. Michael Porter identified a set of interrelated generic activities common to a wide range of firms. The resulting model is known as the value chain and is depicted below: Primary Value Chain Activities
Inbound Logistics

>

Operations

>

Outbound Logistics

>

Marketing & Sales

>

Service

The goal of these activities is to create value that exceeds the cost of providing the product or service, thus generating a profit margin

INTRODUCTION:-

Wall mart, Founded by Sam Walton, the first Wal-Mart store opened in Rogers, Arkansas, in1962. Seventeen years later, annual sales topped $1 billion. By the end of January 2002, Wal-Mart Stores, Inc. (Wal-Mart), was the worlds largest retailer, with $218 billion in sales. Wal-Marts winning strategy in the U.S. was based on selling branded products at lowcost. Each week, about 100 million customers visited a Wal-Mart store somewhere in the world. The company employed more than 1.3 million associates (Wal-Marts term for employees) worldwide through more than 3,200 stores in the United States and more than 1,100 units in Mexico, Puerto Rico,

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Canada, Argentina, Brazil, China, Korea, Germany, and the United Kingdom. (The first international store opened in Mexico City in 1991.)

Value chain System:Process that occurs in wal-mart

Traditional Manufacturer -> Wholesaler -> Retailer -> Customer Wal-Mart Manufacturer ->Wal-Mart -> Customer

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PROJECT ON VALUE CHAIN ON WAL-MART

In Wall mart they do the Process of different Approach of Value chain process ,as that different from,others. They get the materials(finished products) directly from Manufacturer ,and does not relay upon the retailers and wholesalers, they directly gives to customers. They Perform the Activites of value chain, such as the Primary activities &Support activites. Primary activites ,such as the Inbound Logistics, Operations. Outbound Logistics,Marketing & sales ,Service, is done by Walmart by their Process and their Approach. Support activites, procurement, Technology development,Human Resource management, Firm Infrastructure.

Finance IS Report:-

Finance statement Growth of sales 2009 :(in billions,except per share data).

2009
Net sales Net sales ( Increase) Operating Income Earning Per Share Dividend Per Share $ 401.2 7.2% $ 22.8 $ 3.35 $ 0.95

2008
$ 374.3 8.6% $ 22.0 $ 3.16 $0.88

2007
$ 344.8 11.6% $ 20.5 $ 2.92 $ 0.67

2006
$ 308.9 9.8% $ 18.7 $ 2.72 $ 0.60

2005
$ 281.9 11.4% $ 17.3 $ 2.46 $ 0.52

Organizational Information System:-

Organisation IS works as a silos into different functional departments . In retail sector Information system also flows this way. From entering a single transaction till updating stock of that good the process is going on. Retail store like walmart has also have this kind of procedure. Which is call TPS and which follows OLTP(On line tyransaction processing system). From entering data into book uptil its operation and selling all of these information its recording which connects all of the functional departments. This simple task can be happend by using a bar code reader which looks after the stock updown of the store

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PROJECT ON VALUE CHAIN ON WAL-MART

Competitive Advantage:There are many ways to compete, yet most companies tend to focus their strategies on only a few of the many ways to gain a competitive advantage. This limits their ability to create and sustain true competitive advantages.In order to have a lasting competitive advantage, it is important to develop a competitive strategy that includes a wide spectrum of techniques to gain advantage. You can compete on price, but you can also compete on time, reputation, values, technology, image, experience, service, design, innovation, quality, information, knowledge, consultative value, loyalty, and process.
Walmart discuss the five Distinct competitive Advantage:-

Competitive Advantage. Distribution Capabilities.

Activities

Fits scope

Tradeoffs -

Efficient Economies of Distribution .e.g scale match Cross docking volume base strategy

Patnership Relationship

Advanced data mining.

Workforce culture

EDLP

Expense Requires partnership with suppliers Walmart Improves supply Relatively high integrates chain &lowers costs. suppliers ,via IT distribution and treats them costs well in terms of pricing and they are more partners ,than value takers. Active Improves Expense in time. collection and customer usage,of satisfaction consumer through more purchase accurate behaviuour. forcasting demand. Customer Store can Expensive in terms oriented respond of business. workforce quickly/flexibly motivated to changing through demand. generous participation and belief in walmart culture Maintanence of Improves customer Only possible ,as satisfaction through long as you really everyday low low prices. price lowers. have the lowest prices.

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PROJECT ON VALUE CHAIN ON WAL-MART

Competitive Straregy:Traditionally, Wal-Mart has essentially had a low-cost, high volume strategy. The strategy aims at customer satisfaction through low prices and relatively good customer service. Here are the basic details. Low cost: Wal-Mart has lower operating expenses than the industry average. The primary cost advantage is Wal-Marts superior distribution capability (location of stores, insideout growth patterns, cross-docking, superior information management). Quantitative details on cost advantage are set forth in Section 3 below. High Volume: Industry analysts watch Wal-Marts growth of sales figure very closely. Wal- Marts prices are low by the industry standard, which, combined with its lower costs, indicates a strategy that aims at growth in volume through grabbing increased market share (cf. Dell). Customer Satisfaction: Low prices, advanced data management and extremely motivated employees (10 ft rule, sundown rule) means a better customer experience than at other discount retailers, even though Wal-Mart remains a self-service retailer. In addition, the large size of the traditional Wal-Mart stores adds convenience by offering a one-stop solution by offering a wide range of products. In the words of Sam Walton, Wal-Marts aims at creating a loyal customer base by lowering their cost of living through offering quality and other products at significantly lower prices, while surprising them on the convenience and service level side. Its worth mentioning that Wal-Mart acquired volume through a careful consideration of locations, away from competition. Today, however, Wal-Mart is experimenting with extending its original strategy. There are three avenues being considered: internationalization, different formats (neighborhood stores) and expanding the product range to offer more complete customer solutions like travel, insurance and banking services. Still, in terms of strategy, we can say here that the internationalization option is essentially an extension of Wal-Marts traditional strategy to different countries (which is no doubt why Wal-Mart is pursuing it so aggressively), whereas the other two options are new ground for Wal-Mart (which explains why they are being much more tentative in those areas). Bibliography http://walmartstores.com/sites/sustainabilityreport/2009/ec_overview.html http://www.smallbusinessadvocate.com/small-business-articles/creating-and-sustainingcompetitive-advantage-520 http://en.wikipedia.org/wiki/Information_systems_%28discipline%29

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