Wal-Mart owns the largest and most sophisticated computer system in the private sector. It uses a MPP (massively parallel processor) computer system to track stock and movement which keeps it abreast of fast changes in the market. All of the sales and inventory is distributed with its advance satellite communications system. Wal-Mart has increase their buying power buy negotiating with its vendors. They expect a commitment of quality merchandise.
As it has worked out it has been profitable for both sides. Even though Wal-Mart is tough in negotiations with the vendors to get rock bottom Prices, they develop respect and form long term connections that value both Parties. Wal-Mart has some of the highest technology working for them. For example, they have an automated recording system linking computers between Proctor & Gamble. The computer recognizes when an item is low on stock and sends a signal straight to the P&G distribution center.
Next sends a re-supply order, via satellite, to the nearest P&G factory, which then sips the item to a Wal-Mart distribution center or directly to the store. This method allows P&G to lower its cost and pass on some of the savings to Wal-Mart. Wal-Mart shows its concern for the community in many ways. One is by building environmental friendly stores. These stores contain environmental education and recycling centers. They have also adopted a low cost theme for its facilities.
All of the offices including the corporate headquarters are built economically and furnished simply. They also conserve energy by having computerized temperature controls. Sam Walton believed that Wal-Mart would almost double its stores to about 3000 by the year 2000. He wanted to perfect the Super center format to expand Wal-Mart’s retailing reach into the grocery and supermarket area. The Super center was intended to give Wal-Mart improved drawing power in its markets by providing a one-stop shopping destination.
The Super centers would have the same items as a typical Wal-Mart, but in addition customers could get groceries, take family portraits, get clothes dry cleaned, pick out optical wear, and even get there hair done. The Super center division more than doubled in size during 1993, then again in 1994. Because of the ingenious idea of having a sort of “discount mall”, the Wal-Mart Super center will most likely make Wal-Mart the nation’s largest grocery retailer. The Success of Wal-Mart started out with three simple policies 1.
Customer value and service; 2. Partnership with its associates; 3. Community involvement. Success in the next decade will depend on the level of understanding retailers have about customer expectations, and needs of the customer. Given as how they stay one step ahead of the competition by using technology and being customer driven it is safe to say that Wal-Mart will be the leading retail industry leader for an extremely long time.
1. Jon Heuy. Sam Walton: Made in America: My Story (New York: Doubleday, 1992) 2. Kenneth E. Stone, Competing With the Retail Giants, (Toronto: John Wiley & Sons Inc. 1995) 3. Vince, H. Trimble, Sam Walton: The Story inside America’s Richest Man (New York: Dutton, 1990) 4. Inc Magazine, Spies Like Us, Stemberg, Tom, with Gruner, Stephanie. August, 1998, p45-48 5. Inc Magazine, The Mentors, Welles, Edward O. June, 1998, p48-50 6. http://www. wal-mart. com 1996, 1997, 1998, 1999 Wal-Mart Stores, Inc. 7. Taylor, D. , Archer, J. S. Up against the Wal-Marts. (New York: AMACOM, 1994)