Wal-Mart Stores in 2003
The Wal-Mart Discount Inc. was founded in the year 1962 by Sam Walton. The concept behind his retail-stores was to transfer the discount store model from bigger cities to small towns. This was at that time a bold move which resulted in virtually no discount-store competition near the newly founded markets.
Another advantage of Walton's stores was the idea of volume. The strategy lies in purchasing the goods at lower prices and selling the goods to customer at much lower prices, cutting the price as far as possible and increasing the profit by increasing the number of sales. This ferociously increases the competition in the market and Wal-Mart competes with all its competitors till it is dominant it the market.
Already very early did Wal-Mart realize that logistic was a key factor to its success. By investing very early in state of the art information technology (IT) which tracked every item in every Wal-Mart store, the company was able to shrank inventory-taking lags from several months in the 1950s to near real time in the 1990s. Their core IT competence is the ability to track every item and share this information with their suppliers. Additionally to this feature Wal-Mart possesses its own distribution centers (84 in the US only) which operate together with the discount stores on basis of a hub and spores system. Furthermore did Wal-Mart establish the “cross-docking” system. This system allows the transfer of merchandise directly from inbound trucks to store-bound trucks without storing goods inside the distribution centers. With this system and the above mentioned IT systems, Wal-Mart is able to minimize the time its goods are stored inside the distribution centers and the goods needed inside its discount stores are nearly delivered just in time. This shows that Wal-Mart has realized very early that technology plays a vital role in the development of a organization and used its technological advantage,...