Internal Analysis of Wal-Mart

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External Environmental Conditions: Generally favorable but changing. • Socio-cultural Segment: Shoppers are decreasing the amount of time spent shopping. Grocery shopping is being viewed as a “need to do” instead of “want to do.” As a result, consumers now travel fewer isles and ultimately spend less time in the store. • Technological Segment: The linking of several different systems (ex. wireless communications) used by retailers has provided a near flawless flow of information and better resource management. Large retailers now rely on intranets and extranets for information sharing within the organization and with external entities. Other technological developments include smart cards and radio frequency data communication.

Internal Value Chain Analysis: Excellent use of value chain activities. • Inbound Logistics: One of the most important reasons for Wal-Mart’s success has been its inbound logistics. Wal-Mart pioneered the development of a hub-and-spoke distribution system. Its central distribution warehouses are strategically located to serve clusters of Wal-Mart stores which lead to minimized shipping times. • Operations: Hand-held scanners allow Wal-Mart to monitor its inventory in real-time. This helps Wal-Mart reduce the potential for stock outs and excess inventory. Other significant operations that differentiate Wal-Mart from competitors are the use of people greeters and the ten foot rule. • Outbound Logistics: Bar scan registers tie into inventory control and ordering which is another key factor for Wal-Mart’s success in its excellent inventory control systems. Wal-Mart has continuous contact with its distribution centers, suppliers, and every point of sale in each store, so that orders can be executed quickly. Wal-Mart also has an extensive communications network that connects all stores, warehouses, and suppliers. Effective shipping processes provide quick delivery from distribution centers to stores and as a result its...
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