Research and analyze company's current IT situation Essay

Research and analyze company's current IT situation - Essay Example The first outlet of Wal-Mart was opened in the same area in 1962 by the name of Wal-Mart discount store. Thereafter, another 12 retail stores under the ownership of Walton’s family were opened (Wal-Mart). However, it was not until 1969 that the Wal-Mart stores chain was founded (Wal-Mart). The strategy on the basis of which Wal-Mart was founded was providing everyday low prices at any place. It was not until 1970 that the first stock was traded with the formation of Wal-Mart as a public limited company (Wal-Mart). Thereafter, the company’s operations expanded and its distribution centers increased leading to increased growth through acquisitions. Competition also increased with retailers such as K-mart, Costco, Dillard's, Dollar Tree, J.C Penny, Sears and Target (NASDAQ). The bargaining power of customers, therefore, increased with the availability of greater substitutes. This increased the need to manage the operations efficiently and effectively which meant the compan y had to make use of information systems and manage them to sustain their competitive edge. Perhaps the primary reason behind the rapid growth of Wal-Mart is its high responsiveness to customer needs and cost reduction through the integration of information technology and information systems into its supply chain and logistics. This is reflected in Wal-Mart being the first retailer to have adopted the hub-and-spoke system of centralized distribution (Banjo). The hub-and-spoke system revolves around the idea of systems integration with the inflow of products from various places to distribution centers where the orders are consolidated and sent to their respective destinations (Banjo). These enable companies to reduce cycle times, inventory as well as costs of transportation. Wal-Mart has carefully synchronized its business strategy with its MIS strategy. This is in line with literature which suggests that the operational, managerial and strategic needs of corporation must be aligned with the information systems. The model of strategic alignment suggests that the business, IT, Organizational infrastructure and IT infrastructure must be aligned with each other (Venkatraman, Henderson and Oldach). The strategic drivers in the case of Wal-Mart included intense and growing competition, the need to shift to online operations and cutting costs to enhance profits. All these have resulted in Wal-Mart resorting to the use of Management Information Systems in its operations. Although traditionally classified as a brick and mortar company with physical operations only, Wal-Mart can now be categorized as a dot.com corporation as well owing to the foundation of walmart.com. Wal-Mart presents a case of a retailer that has used information technology to achieve and maintain a competitive edge in the market. As mentioned earlier, this is based on the company’s business strategy of offering lowest possible prices (which can come through lowest possible costs). Therefore, cost reduction and responsiveness to customer needs have been at the heart of Wal-Mart’s business strategy. The company has catered to the needs of most of its stakeholders including its vendors, suppliers and customers through the adoption of information systems. Wal-Mart has invested huge sums of money for tracking its inventory across all outlets. The satellite communication system developed in