Walmart\'s Use of Technology for a Competitive Advantage

Wal-Mart's strategy is to be the low cost seller in the market, but how does a company sell at a lower price that the competition all the time? The answer lies in Wal-Mart's supply chain. While many rightfully point out that Wal-Mart's buying power is better anybody else's (Lu, 2014) , because it is the biggest retailer in the world, technology also plays a huge role in how Wal-Mart is able to sell at prices below all the other companies (Fishman, 2003).

Wal-Mart has long recognized that the only way to offer the lowest prices is by sourcing its goods at the lowest price. This does not necessarily mean buying power – Costco, Target, Amazon and others can more or less match Wal-Mart's buying power – but it means getting goods to the store shelves as cheaply as humanly possible. Purchasing is only one part of that, and Wal-Mart has long been a leader at total supply chain management as a means of extracting competitive advantage.

As an example, a few years ago Wal-Mart was an early adopter of RFID technology, which allows for tracking of goods in real time. By tracking in real time, using radio frequencies, Wal-Mart was able to not only know where goods are to help route them better, but the company is able to gather a lot of data about the movement of goods through its supply chain, and then use this data to make the supply chain more efficient (Kosasi, Kom & Saragith, 2014).

This is just one example of Wal-Mart using technology to leverage competitive advantage in the supply chain. The company has a track record of early adoption of promising technologies, and of being a leader in supply chain automation. Part of Wal-Mart's strategy is to tie different information systems together so that its stores report back sales to a system that does the ordering – identifying need in real time, then relying on a the automated supply chain to trigger orders, and suppliers to respond immediately to those trigger (ASA, 2011).

In fact, if a supplier does not agree to accept Wal-Mart's technology, it will be removed as a supplier, such is how seriously Wal-Mart takes having not only the most modern technology but utilizing a streamlined stack in its supply chain. Wal-Mart continues to be a leader in exploring the potential of new technology. The company has begun recently to test blockchain technology - more specifically distributed ledge technology in its supply chain.

The technology is thought by analysts to have the potential to remedy certain pain points within supply chain management, including fraud, and manual paperwork. Wal-Mart has no interest in manual paperwork, and has thus started exploring what blockchain can do to reduce paperwork, and ideally to reduce fraud as well.

The latter might be a bit trickier – a third party cannot actually verify that someone sold Wal-Mart 100,000 pounds of pork remotely –but the point is that Wal-Mart wants to explore the new technology and see what it can and cannot improve in terms of Wal-Mart's supply chain management. (Prisco, 2016). Overall, these different technologies illustrate how Wal-Mart has gained competitive advantage through its supply chain management.

It has made a point to become an early adopter, and outthink the competition in terms of utilizing new technologies to enhance its business. By gaining first mover advantage, and being more creative in the application of new technology, Wal-Mart puts itself in the position as a leader, not a follower, in terms of the way technology helps to deliver competitive advantage.