Walmart's Use of Rfid Technology

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“Save Money. Live Better. Wal-Mart” is the slogan that most people refer to the retail giant, Wal-Mart. To achieve its company goal and provide customers with the goods they wanted when and where they wanted helped Wal-Mart achieve their competitive advantage. Wal-Mart has become the world’s largest and most powerful retailer with one of the most powerful supply chain. The most important part of Wal-Mart’s supply chain strategy was technology. Wal-Mart has the largest information technology infrastructure of any private company in the world. In 2003, Wal-Mart plans to spend $3 billion over the next several years on information technology. (Gilbert, 2013) Wal-Mart has utilized several information systems throughout the past. Some of these technologies are: point of sale, satellite communication systems, data warehouse, retail link systems, electronic data interchange and the most innovative and important technology, the RFID. Wal-Mart was created by Sam Walton in 1962 in Rogers, Arkansas. It started as a small discount store that offers lower prices so people could save money and live better. Sam Walton believed that it was the organization’s responsibility to provide the customer with what they wanted, which is friendly service, lower prices, and quality merchandise. (“History Timeline”, 2009). What started as a small discount store has turned into a retail giant. Wal-Mart currently employs 2.2 million associates around the world. Wal-Mart operates more than 10,700 stores in 27 countries around the world under 69 different banners. (Wal-Mart Annual Report, 2012) It reached annual sales of $466 billion in 2013. The following figure from yahoo finance shows Wal-Mart’s competitor comparison. Wal-Mart is in the discount variety store industry. Its direct competitors are: Carrefour, Costco, and Target. Wal-Mart with the revenue of $469.16 billion dollars is leading the industry. Europe’s Carrefour has the revenue of around $105 billion. Costco has the revenue of around $102 billion. Target Corporations has the revenue of around $72 billion. Other discount variety stores have the revenue of around $72 billion. (Wal-Mart Stores Inc., 2013) To remain as an industry leader and continue to improve, Wal-Mart invested a lot of capital into its information system.

Direct Competitor Comparison| |

| WMT| PVT1| COST| TGT| Industry|
Market Cap:| 235.27B| N/A| 43.60B| 40.93B| 44.07B|
Employees:| 2,000,000| 412,4641| 96,000| 365,000| 96.00K| Qtrly Rev Growth (yoy):| 0.04| N/A| 0.10| 0.03| 0.07| Revenue (ttm): | 469.16B| 104.18B1| 101.22B| 71.86B| 71.86B| Gross Margin (ttm):| 0.25| N/A| 0.12| 0.30| 0.25|

EBITDA (ttm):| 36.30B| N/A| 3.77B| 7.41B| 3.77B|
Operating Margin (ttm): | 0.06| N/A| 0.03| 0.07| 0.06| Net Income (ttm):| 17.00B| 523.10M1| 1.80B| 3.02B| N/A| EPS (ttm):| 5.02| N/A| 4.11| 4.51| 4.11|
P/E (ttm):| 14.03| N/A| 24.34| 13.94| 22.51|
PEG (5 yr expected):| 1.49| N/A| 1.72| 1.24| 1.44|
P/S (ttm):| 0.50| N/A| 0.44| 0.58| 1.02|
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Pvt1 = Carrefour SA|
COST = Costco Wholesale Corporation|
TGT = Target Corp.|
Industry = Discount, Variety Stores|
1 = As of 2011 |

Wal-Mart’s technology has been evolving for the past 50 years. Since the 1980’s, Wal-Mart had been one of the leaders in using information technology. The company began their use of bar codes for scanning point of sales data in 1983. In 1987, Wal-Mart completes the largest private satellite communication system in the United States. It links all operating units of company and headquarters with two-way voice, data and one-way video communication. A check-system designed to take full advantage of container bar-code labeling is in the back room of every Wal-Mart store. In 1990, a data warehouse prototype is created to store historical sales data. The Retail Link system was deployed in 1992, to provide vendors with information on sales trends and...
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