Walmart Focuses on Low Cost as Its Competitive Advantage

Subject: Case Studies
Pages: 2
Words: 405
Reading time:
2 min
Study level: College

Information Systems

Several information systems are utilized at Walmart to maintain a competitive advantage. For instance, the company uses predictive analytics to detect the patterns in the checkout process of individual stores to adjust the checkout process or adopt a new form of checkout (Souza, 2017). The system is intended to increase customer satisfaction.

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The installation of the pick-up towers streamlines the retrieval of an online order, requiring only a scan of an online receipt. This system is also customer-oriented.

Some information systems are intended for internal optimizations, such as simulations of the supply chain. The obtained information helps to remove the redundant steps and identifies the least cost-effective components in a timely manner.

The company also makes use of the information on individual customers’ preferences to adjust their offerings. The customers who use the company’s app benefit from it by receiving the information they are potentially interested in, which increases the relevance of the company’s offerings. The system at Walmart Pharmacy determines the busiest parts of the day, which serves two functions – the improvement of workload distribution and the increase in the customer satisfaction rate. A system of alerts identifies and reports significant anomalies in the data, ensuring competitive advantage through organizational responsiveness to issues.

Big Data

The recent advances in the field of IT made it possible to collect and process vast amounts of information (known as Big Data), enabling the businesses to better understand their customers. The systems described above require data that can be obtained by processing available documentation (e.g. receipts and online shopping carts) or through direct inquiry (e.g. administering a survey or asking the customer to rate the quality of service). The company also tests several innovative approaches to data collection, such as facial expression recognition to obtain additional feedback (Marr, 2017).

Conclusion

The Walmart’s main competitive advantage is the low cost of its goods. In order to retain it, the company needs to rely on multiple suppliers and complex supply chains that require tight organizations to stay productive (Walmart, n.d.). Modern information systems offer reliable, accurate, and relatively inexpensive solutions. Walmart utilizes retrospective data collection for a more comprehensive insight, uses Big Data analytics to redistribute resources according to the predicted customer activity throughout the day, and automates the segments of supply chain management and retail that require no human involvement. The combination of these systems ensures effectiveness while at the same time keeps associated expenses low.

References

Marr, B. (2017). How Walmart is using machine learning AI, IoT And Big Data to boost retail performance. Web.

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Souza, K. (2017). Wal-Mart works to use big data to improve checkout process, manage supply chain. Web.

Walmart. (n.d.). Becoming a supplier. Web.