Walmart – a Case Study in Managing Technical Transitions
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WAL-MART.COM:
A Case Study in Managing Technical Transitions
Managing Technical Transitions
Prof. Michael Lawless
February 24, 2001
Prepared by:
Andrew Bender
Ann Howell
Amy Lavin
David Torgerson
Founded in 1962 by Sam Walton, Wal-Mart followed an amazing pattern of success and growth, eclipsing all other U.S. department store retailers by the early 1990s. In early spring 2001, Wal-Mart enjoyed a huge market capitalization of over $230B, which was down from highs of nearly $300B in early 2000. Over the last year, however, Wal-Mart had suffered a number of failures in its Internet-based operations, as it tried feverishly, along with many other traditionally “bricks-and-mortar” companies, to make a transition to the Internet. As much of the commotion in the markets relative to the Internet subsided due to a slowing economy and a number of high-profile “dot-com” failures, Wal-Mart continued to experiment with its Internet presence and corporate strategy. In this paper, we discuss Wal-Mart and its technical transition to the Internet. First, we examine the company from a value chain and core competency perspective, to gain insight on what value the company brings to the table, both in its traditional and Internet operations. We give a synopsis of Wal-Marts recent and current online philosophies, and then turn to Wal-Marts strategy as it relates to the transition. Finally, we provide an analysis of Wal-Marts prospects and recommendations for the future.
Sources of Value
Wal-Mart had always invested heavily in infrastructure. They were among the first to use point-of-sale Uniform Product Codes (UPC) scanning, and intra-store radio frequency (RF) transmission of product UPC and pricing information between central store inventory systems and personnel with scanners on