¶ … Wal-Mart Lost Its Technology Edge, Thomas Wailgum of CIO Magazine defines why the world's leading retailers is failing on several key it initiatives including demand planning alliances with leading consumer goods manufacturers including Proctor & Gamble, in addition to the lack of success with the much-hyped RFID project Wal-mart has been championing throughout the retail industry over the last seven years. The article gives a balanced view of Wal-Mart's supply chain expertise and its excellence in logistics, in addition to the strengths in retailing processes within the U.S., yet also mentions how Wal-Mart failed in South Korea and Germany due to a lack of cultural expertise in foreign markets. The Germany market exit cost $1B alone. On top of all these challenges the company's marketing strategies online with Wal-Mart.com are seriously lagging competitors Costco and purely-play online retailers as well.
The implications for Wal-Mart and the retailing industry it dominates from their current state as defined in the article illustrate how difficult new technology adoption is, even for companies that are market-makers like Wal-Mart. The lack of RFID adoption is a case in point. RFID was to revolutionize not just Wal-mart but the entire retailing supply chain and distribution channels, revolutionizing the value chain of entire businesses. Instead there is lukewarm adoption despite the aggressive stance Wal-Mart has taken on this with its suppliers. In addition to this challenge of RFID adoption and the pursuit of further efficiency gains in its supply chain, Wal-Mart is also facing a market segmentation crisis on its website. Analysts in the article contend that the company must move up-market and attract more affluent customers to its website and its store, yet this could alienate the customer segment Wal-Mart generates the majority of its revenue from, which is the price value shopper. The implications for the entire mass merchandising retailing segment and the profitability of this entire industry hinges on the breakthrough successes of Wal-Mart and their success to bring new standards into global supply chains and merchandising value chains. The article illustrates how formidable the challenges are to the world's leading mass merchandiser and the retailing industry overall.
References:
URL for the Article discussed: http://www.cio.com/article/print/143451
