Walmart Information Systems Essay

2066 Words 9 Pages
Walmart Information Systems Founded in 1962 by Sam Walton, Walmart has grown to be the largest retailer on the globe. Driven by Mr. Walton’s 10 rules to build a business, Walmart promises to “save people money so they can live better (Wal-Mart Stores, Inc., 2014)”. One of those rules is to “control your expenses better than your competition (Wal-Mart Stores, Inc., 2014)”. Walmart is recognized as leader in incorporating cutting edge information systems and processes that drive out costs and provide advantage over their competitors. In order to maintain their spot at the top of the global retailers list, Walmart continually seeks to improve the technology used to ensure they maintain competitive advantage, efficiently process …show more content…
Competition is fierce in the retail industry and Walmart has built its company on the principle of controlling costs in order to offer products at lower costs to customers. The Five Forces Model developed by Michael Porter can be used to understand the retail industry’s competitive pressures in terms of buyer power, supplier power, threat of substitute products or services, threat of new entrants, and rivalry among existing competitors (Cummings & Haag, 2013).
Buyer power within the retail industry is very high due to many retailers providing the same or similar products. Walmart has used their information systems to improve efficiency and drive out costs that allow them to offer the same products at lower prices in many cases, which sets them apart from other retailers and thus reduces buyer power. However, other retailers such as Target are reducing or eliminating the price gap by offering similar products at similar pricing as indicated by Supermarket News price check survey earlier this year (Gallagher, 2014). Maintaining competitive advantage in an industry with high buyer power requires diligence since most methods are not permanent. With many retail and grocery store chains providing the same or similar products as Walmart, supplier power is relatively low between Walmart and end customers. Walmart increases their supplier power in this area by offering their products at much
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