The company employed twice as many people and owned about 5 times more retail space than its top 3 rivals.
Yet, when the new century dawned, Wal-Mart long ago had roared past Kmart. Kmart operates its 2, in the US and its territories. One of the biggest factors: The ways Sam Walton, he of the down-home, pickup truck-driving image, used information technology to keep track of what sold in his stores, replenish the products that were selling the fastest, and keep inventory costs down.
Even more important in the long run: Although Walton was notoriously cheap, he could be convinced to spend money on things that would save the company money in the long run and allow it to grow.
On the same issues, Kmart had the tendency to be penny-wise and pound-foolish. Bythe growing Wal-Mart chain had computers in 22 of 64 stores.
Using technology to simplify processes, eliminate waste, and analyze and react to more meaningful information has been the execution focus of Wal-Mart. Take, for instance, the replenishment problem. At any given moment, a typical Wal-Mart Discount Store has more than 70, standard items in stock.
A typical Supercenter is even tougher to stock since it carries more than 20, additional grocery items, many perishable. These have to be reordered frequently, sometimes even daily. How does technology enable this?
SinceWal-Mart has been using handheld computers linked to in-store servers by a radio-frequency network. These handhelds help keep track of real-time information for the inventory on hand, deliveries, and back-up merchandise in stock at distribution centers. Mobile computing has enabled Wal-Mart to have higher quality sales and inventory information.
As a result, suggested ordering quantities on many items are available to associates in real time to assist them in the task of keeping stores replenished and items in stock.
Across all of its formats, Wal-Mart is one of the most effective users of technology.
Some other impressive technological feats include: In the s, using satellite communications to link stores to headquarters for Just-In-Time inventory management the first major retailer to do so.
In the early s, building the Retail Link system, which provides sales data—by item, store, and day—to vendor partners. This information saves suppliers time and expense in planning their production and distribution, which translates to lower merchandise costs.
In the mids, utilizing an item locator system that allows associates to scan an item and electronically check on its availability in other area stores. In the late s, creating the New Retail Link Private Hub, which allows more than 10, Wal-Mart suppliers to log into a Web portal, peruse databases, and find out which store sold how much of its products.
With a latency of a mere six hours from transaction to analysis, Wal-Mart is using the Web to provide real-time information not only to stores and corporate managers, but to vendors as well.
In the late s, it began supplementing those EDI connections with a system called RetailLink that allowed suppliers to access sales data and projections, and help Wal-Mart plot ways to drive up sales. Kmart wound up with a split distribution network. Flash forward toand the same problem is a priority for then CIO-Donald Norman, who was billed in the press as a turnaround artist.
But Kmart never used the technology it had to its full potential, Carlson says. But the merchants tended to keep broadening the variety of products rather than narrowing in on the ones that sold best, Carlson says. Greg Buzek, who studies retail technology as president of IHL Consulting, says the problem Carlson lamented continued long after he was gone.Wal-Mart's Global Challenge Wal-Mart has discovered that expanding overseas has high risks, but after some stumbles, high a global management consulting and market research firm, Wal-Mart International: The Challenge Abroad, author Steve Spivak, senior economist, Wal-Mart's strategy of minimizing sourcing costs as well.
Wal-Mart, the world's largest retailer, has globalized its operations to sell to underserved markets and to gain the earnings growth demanded by its shareholders. Wal-Mart dominates the U.S. market and derives 24% of its sales from 14 international markets.
It achieved early success in Mexico. Today, K-Mart is the third largest retailer in the world behind Wal-Mart and Target. K-Marts business strategy has shifted through the years and today its strategy has emerged into a hybrid of two business strategies consisting of Low cost provider and focusing on a narrower market niche.
A few astute executives, like Harry Cunningham, then CEO of K-Mart, tried to warn his management early on that Walton posed a serious potential threat. They ignored his warnings and were caught with their pants down when Wal-Mart began to offer intense competition.
Aug 04, · For instance, Wal-Mart had 7, stores in , which employed million employees worldwide. In , it had 8, units in 15 different countries with sales of . Jan 24, · A Maryland state law aimed at forcing Wal-Mart to boost the amount it spends for employees’ health care insurance impermissibly interferes with federal employee benefit law, according to a divided panel of the U.S.
Court of Appeals for the Fourth Circuit. United States Strategy .