MIS 201 Saudi Electronic University Walmart case study: IT and IS How IT and IS may be used to help the company operate and achieve its objectives. Discuss the challenges faced by the CIO – which are the most important and why? What role does information technology play in the business? How is it helping Walmart refine its business strategies? Summarize the main purposes of information systems in organizations Management Information System MIS 201
Semester 2 (2018-2019)
Prepare an in-depth analysis of four case studies during the semester. Here are some guidelines:
This is an individual assessment, which is a part from your course score. It requires effort and
This assignment will worth 25 mark (Case Study Questions 15 Marks/ Presentation 10
Answer all the questions listed below for each case.
The answers to the questions are best formulated by reviewing the case and the reading
materials up and including the current week in the course.
The questions are worded to help you apply the readings to the case, so dont limit yourself
to the cases terminology and perspective. The best analysis will abstract the case content by
applying the reading materials to draw broader lessons about the material
Case Study 3 : Walmart
1) How IT and IS may be used to help the company operate and achieve its objectives. (1 Mark)
2) Discuss the challenges faced by the CIO – which are the most important and why? (1 Mark)
3) What role does information technology play in the business? How is it helping Walmart
refine its business strategies? (1 Mark)
4) Summarize the main purposes of information systems in organizations (1 Mark)
Case Study 3 : Walmart
With the advent of science and technology, technological innovations have become a pre-requisite
to achieve operational and strategic excellence. Organizations by using state-of-the-art systems,
are striving for their best to achieve sustainable and long-term competitive advantage. It has
become sine qua non to use modern tools for the effective achievement of goals and objectives. Its
importance can also be observed from the increased spending on Research & Development in order
to pace up with the todays dynamic business environment.
Wal-Mart, founded by Sam Walton in 1962, is the world’s largest retailer that employs about 2.1
million associates worldwide, in more than 8,400 stores, including 8, discount stores, 3,100
combination discount and grocery stores. Wal-Mart is serving its customers and members more
than 200 million times per week at more than 8,613 retail units under 55 different banners in 15
countries. Wal-Mart has ranked first among retailers in Fortune Magazine’s 2010 Most Admired
Companies survey with fiscal year 2010 sales of $405 billion. Sam Walton’s belief was to build an
empire by providing value to its customers and empowering employees, also known as associates.
The way the Wal-Mart operates is so fascinating and impressive that Jack Welch, CEO of General
Electric once said: “Many of our management teams spent time there observing the speed, the bias
for action, the utter customer fixation that drives Wal-Mart.”
The use of high-tech Information technology has always been an essential ingredient for WalMart’s growth. Since its inception, it has used the IT systems well enough for the Inventory,
administrative, customers and suppliers management.
Wal-Mart’s investment in technology started with the computerized accounting systems and since
then the continuous adoption of latest technologies has made Wal-Mart a market leader in the
whole retail industry.
Wal-Mart developed a well-equipped computerized Point of Sale (POS) system capable of
identifying each unit sold, creation of accurate sales receipt and storing all the information itemby-item for sales analysis and inventory reordering purposes. It helped company to avoid
overstocking of merchandize through effective information usage and also assisted them in
investing in only those merchandize that were profitable. It has also helped them figure out best
selling products and prospective products that customers want. Analysts say that it is Wal-Mart’s
Point of Sale system that has helped them achieve the world’s largest market share and revenues
in retail industry.
Wal-Mart, in 2004, was the first in retail industry to adopt electronic radio frequency identification
(RFID) tags for inventory distribution management. RFID technology, which is still being used,
helps them keep track of inventory movement across its supply chain. Wal-Mart was trailing KMart in 1980’s but with the adoption of latest technologies, it has now become the trend setter in
retail industry all over the world.
Wal-Mart is currently working on a project to make best out of wireless technology. In near future,
they have plans to develop a remote system that would allow customers to just walk into their store
and use their own devices (Phones or PDA’s) to get whatever they want. i.e. they might go online
to their website, while at the store, and find things for themselves or just compare the products’
Customer service, best shopping environment and experience, one-stop shopping, best value
products, customer convenience of online shopping, good customer relations are the blessings that
Wal-Mart provides using cutting-edge technology. Latest wireless system at their stores, online
web-retailing, vast width and hierarchy of product items, and stores at multiple remote sites are
the benefits customers of Wal-Mart cherish.
Wal-Mart is considered to be a trend setter in retail industry and it’s all due to its inclination towards
achieving impossible through modern technology. For example, Wal-Mart once tried to develop
three experimental stores in McKinney, Aurora and Las Vegas that were equipped with latest
technologies or concepts like wind turbines, photovoltaic solar panels, bio-fuel-capable boilers and
water-cooled refrigerators. Irrespective of the criticism it had on environmental issues, Wal-Mart’s
initiative was considered to be a positive step towards change and innovation and it provided them
with an opportunity to become the biggest seller of organic milk and the biggest buyer of organic
cotton in the world, as well as reducing packaging and energy costs. It has been quoted in 2006’s
annual report of Wal-Mart that in order to compete against upscale and appealing store, such as
‘Target’, they have launched a new Supercenter concept in Plano, Texas. The new store had wood
floors, wider aisles, a sushi bar, a coffee shop with free Wi-Fi Internet access, and more expensive
beers, wines and other electronics goods.
By using advance forecasting techniques and integrating different technologies, Wal-Mart is
planning to deploy simulation software that would help them simulate business events that are yet
Wal-Mart has got a strategic plan of introducing a concept of self-service. Self-service technology,
aimed at eliminating paper and paper forms, will be provided to their associates, prospective
associates, customers and members. It was said by Kevin Turner, CEO of Wal-Mart’s subsidiary
corporation, in his interview with ‘CIO’ personnel that “having an associate portal and devices on
our sales floors will let customers and members get product information, and let us do computerassisted selling”.
For evaluating new technologies, they are always plugged into research and development labs of
their key suppliers like Cisco, IBM, NCR, AT&T or HP in order to get current with latest
technologies and drive the future for themselves.
Wal-Mart has been outstanding in its investments in Information technology from all prospects.
IT systems at Wal-Mart allow them to reduce transactional as well as operational costs at their
distribution centers and it has also helped them to support Wal-Mart’s long-term strategy of owning
the distribution centers and maintaining long-term relationships with their suppliers. Also,
improvement in productivity due to IT systems is dramatic at Wal-Mart. It has helped them offer
products at such a nominal cost that a small town merchant is unable to provide and this is
remarkable achievement of Wal-Mart. It has become a sustainable competitive advantage for them
over their competitors and a reason of their growth and profitability. We are aware of a fact that
every benefit is accompanied with some problem but Wal-Mart has successfully defied its
weaknesses and have used its strength well to take advantage from the prospective opportunities
and avoiding possible threats.
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