Walmart, Information System

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BMAN 21061 Introduction To Management Information System
Non-assessed Essay

Q:Large numbers of companies are using their information systems as a strategic tool to improve their competitive advantage. Choose one of these companies (Toyota or Wal-Mart) and prepare an essay of 1500 words on: a) how information systems are used strategically by the company to gain a competitive advantage b) discuss if it is possible for the company to maintain this advantage in the future. You are expected to use the competitive forces and/or value chain model in your analysis.

In this essay, Wal-Mart was chosen to be the case to analysis. Firstly, some basic concepts will be mentioned, including business strategy, IS strategy and IT strategy, and Wal-Mart will be introduced briefly. And then this essay aims to discuss how information system are used strategically by company to gain competitive advantage, and if it is possible for company to maintain this advantage in the future. Business Strategy sets the overall direction for the business. Information System Strategy is the plan an organization uses in providing information services. It defines what information, information systems and IT architecture are required to support the business. Based on a prioritization of needs. Information Technology Strategy: includes how the infrasture and services are to be delivered. (Turban) “Wal-Mart Stores, Inc. (branded as Wal-Mart) is an American public corporation that runs a chain of large, discount department stores. It is the world's largest public corporation by revenue, according to the 2008 Fortune Global 500.” “Wal-Mart is the largest private employer and the largest grocery retailer in the United States.” (Wikipedia). To be the industry leader, Wal-Mart must have its own competitive business strategies, the first one I want mention is growth strategies, significantly expanding its capacity, expanding into global markets. By now, Wal-Mart has 3,859 stores and more than 680,000 associates in 15 markets outside the continental U.S. (Walmart). This helps Wal-Mart to expand global market share and enhance their power of competition. With too many stores, they must have large number of customers. The IT advantages will allow employees to offer their customers a better service, instead of being busy scanning and filling out order forms, they can spend more time with customers. The second one, cost leadership strategy should be the most outstanding competitive strategy of Wal-Mart. The CIO of Wal-Mart has said: to be merchants first and then technologists. IT acts as the most important role in this strategy and helps Wal-Mart to gain lower price competitive advantage, mainly shows on effective logistics and supply chain. (Aleksandrov) Based on the well developed information system, the CEO of Wal-Mart can get information anytime, where need products, which items are best-sellers, where can get the lowest price products from suppliers, which items can get the most profit and so on. One example is that very few retailers can match the speed and effectiveness with which Wal-Mart deals with inventory stocks. The information system would record each single item when it was being sold, when the amount of stocks reduced at some level, the system will remind store of asking more stocks from headquarters. Headquarters arrange and send goods to the nearest distribution centre and computer system of distribution centre will arrange time and route to the store. All the stores are located around distribution centers, all the trucks have GPS, and control center can know the position of each truck, what goods they carried, how far from destination and so on. Stocks will display on the shelves in the store within 36 hours. (MBSlib) This can avoid bulges in order cycle and lower inventory cost. With information system, the supply chin become more time and cost-efficient, with savings passed...
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