DEDICATION

We Dedicate To All We Love the Most...

To the Creator,

ALLAH ALMIGHTY
To the Beloved of the Creator, the Greatest Teacher,

Hazrat Muhammad Mustafa Sallalah o Alaih e Waaalehe Wassalam

To The Source of Heaven,

My Mother
To The Door of Heaven,

My Father
Our So Kind Teacher,

Sir Tasawur Javed

Acknowledgement
Apart from the efforts of me, the success of any project depends largely on the encouragement and guidelines of many others. I take this opportunity to express our gratitude to the people who have been instrumental in the successful completion of this project.

I would like to show our greatest appreciation to SIR TASAWUR JAVED. I cant say thank you enough for his tremendous support and help. I feel motivated and encouraged every time I attend his meeting. Without his encouragement and guidance this project would not have materialized.

The guidance and support received from all the members who contributed and who are contributing to this project, was vital for the success of the project. I am grateful for their constant support and help.

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___________________Table of Contents______________________

1. Introduction _________________________________________________04 2. Competitive Advantage ________________________________________05 3. SWOT Analysis______________________________________________06 4. Strength ____________________________________________________07 5. Weakness___________________________________________________08 6. Opportunities________________________________________________08 7. Threats_____________________________________________________08 8. Value Chain________________________________________________ 09 9. Competitive Advantage with respect to information system___________ 11 10.Conclusion_________________________________________________ 13

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Introduction
The Wal-Mart story began in 1962, when Sam Walton, opened the companys first store in roger, ark. But the company officially incorporated as Wal-Mart stores inc. on October 31, 1969.Wal-Mart (WMT), the worlds largest retailer, with $405 billion in revenues for the fiscal year ending Jan. 31, 2010. In the U.S., Wal-Mart Stores, Inc. operates more than 4,300 facilities including Wal-Mart supercenters, discount stores, Neighborhood Markets and Sams Club warehouses. [Ref 1] Major brands sold at Wal-Marts are Sams choice, Great Value, Roy, Equate, Parents Choice, White Stag, George, Faded Glory, No Boundaries, Simply Basic, Better Homes and Gardens, Canopy, Mainstays, Your zone,@ the office, Best Occasions, Clear American, Color Place Douglas, Ever Start, Fire Side Gourmet, Golds Gym, Holiday Time, Kid Connection , Market side, Ozark Trail, Protg, Special Kitty, Wal-Mart Family Mobile and World Table. [Ref 2] Internationally, Wal-Mart operates more than 4,000 additional stores in 15 markets worldwide, including Argentina, Brazil, Canada, Chile, Costa Rica, EI Salvador, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, United Kingdom and the United States. [Ref 3] Through our supplier diversity initiatives, Wal-Mart partners with more than 2,500 minorityand women-owned business, has remained remarkably strong during the recession. There are 3 different segments Wal-Mart US, Sams Club and International. The current President and CEO of wall marts is H, Lee Scott and Vice President is Laura Philips. [Ref 4] The mission statement of Wal-Mart states: "Our mission is to enhance and integrate our supplier diversity Programs into all of our procurement practices and to be an Advocate for minority- and women-owned businesses."[Ref 5]

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Competitive Advantage
A competitive advantage could simply be defined as the advantage or ability a firm has over its rivals in the industry; or the ability a firm has to outperform its industry rivals. It can be gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and services that justifies higher prices. There can be many types of competitive advantage including the firms cost structure, product offerings, distribution network and customer support. There are two main types of competitive advantage and differential advantage. Comparative advantage or cost advantage is a firms ability to produce a good or service at a lower cost than its competitors, which gives the firm the ability sell its goods or services at a lower price than its competition or to generate a larger margin on sales. A differential advantage is created when a firms products or services differ from its competitors and are seen as better than a competitors products by customers. Wal-Mart is using first type of competitive advantage cost advantage. The key to Wal-Marts success is its ability to keep costs and prices low. As it says Our goal is always to be the low price leader in every community where we operate. Our customers trust us to have everyday low prices theres no need for special sales [Ref 13]. And its slogan communicates always low price and new logo save money live better also shows this. To gain this competitive advantage company needs to lower its cost because the companies have to keep a profit margin and if they want to be cost competitive they have to lower their cost

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SWOT analysis of Wal-Mart

SWOT analysis is a basic technique that is often used in strategic planning, improving company success, organization development and identifying competitive advantage.

Strengths:
Wal-Mart is the world largest company in term of revenues. It is well known for lowest cost products. The company covered most of the US market and having a huge market share. Wal-Mart offers variety of products in their stores. It sells 40% of private brands which are produced through contracts with manufactures. Wal-Mart started Satisfaction guaranteed programs promoting customer goodwill Customer feels very convenient to find most of the products under one roof. Wal-Mart has efficiently used the information technology for tracking the goods on Wal-Mart stores shelves. The system automatically detects the lower quantity and generates orders for suppliers. Supply chain management and logistics is one of the strengths of Wal-Mart. This allows Wal-Mart to utilize the just in time inventory concept and avoid the pilling up inventory to save the extra cost for maintaining inventories in the warehouses. Wal-Mart always keen to provide training to their employees to improve the customer service level.

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Weakness:
The corporation is huge but still has in 14 countries. The market share is low outside the US market. Wal-Mart does not have formal mission statement; the mission statement does not clearly states the type of business Wal-Mart is in. Although costumers agree that Wal-Mart provides the goods at lower prices but on the other hand they are also concerned about the poor quality of few products. Wal-Mart facing difficulties in outside USA such as countries like china. Wal-Mart gives very low profit margin to the supplier. Wal-Mart policies are old fashioned; it should be updated time to time.

Opportunities:
Most of the International market are untapped specially the Asian countries. A lot of retail organizations are leaving out of business due to the drop in disposable incomes. This can help WalMart by growing its customer base due to the bargains that it can provide its customers. Due to the cheap rate that the organization is able to buy its products from suppliers, it is able to provide customers with even better bargains to give confidence them to shop at Wal-Mart.

Threats:
Small towns do not want entry of Wal-Mart Bad media exposure for Kathie lee brand Substitute products more easily because of intense competition Wal-Mart is criticized several times by community groups The competitors are gaining control over international market Wal-Mart is competing in the market on low cost advantage. Competitors are imitating low cost strategy may weak the al-mart position. Wal-Mart is criticized many times by the community groups. Customers are also curious about security due to terrorism.[Ref 14][Ref 15]. Page 7 WWa

Wal-Mart Value Chain

INBOUND LOGISTICS
Real-time data of inbound and in-progress inventory data Conveniently location of all highly automated distribution facilities Majority of inventory flows through distribution Centers Own trucking fleet largest in US. [Ref 8] Mastered largescale crossdocking [Ref

OPERATIONS
Easily replicable model Flexible floorplan Only real-time inventory and sales tracking system High sales per square foot

OUTBOUND LOGISTICS
Trucks never return with an empty truck Two step hub and spoke distribution system

MARKETING & SALES

Always Low Prices. Always. Save money, live better [Ref 4] Community involved Self service Cash and carry Credit

SERVICE
Welcomin g environm ent with Greeters Quick response

16]

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FIRM INFRASTRUCTURE Successful integration of activities in value-chain Maintain focus on brand and concept and bringing store-level concepts back to top

Relied on balance scorecard

HUMAN RESOURCE MANAGEMENT Focus on the individual employees empowering them as associates and equal feedback Competitive benefits ,wages ,great training program ,job rotation and profit sharing program

TECHNOLOGY DEVELOPMENT Leading-edge, highly developed IT systems UPC,EDI,VMI and CPFR [Ref 22][Reef 23] Cross docking and Worlds largest satellite system Real-time access to sales information from all stores

PROCUREMENT Real-time connection with store inventories and suppliers Direct contact with suppliers. No single supplier accounting for more than 2.4% Cross-border relationships with China

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Competitive Advantage with Respect to Information System

More Competent Areas: ________________________________________________________ Analysis of Wal-Marts value chain shows that the more the more competent areas for WalMart are inbound logistic out bound logistics and technology development. The integrated logistics planning at Wal-Mart focus on the costumer. The costumer service levels are set so high at Wal-Mart that unless the logistic planning is well-coordinate between the inventory, transport, and location functions, the logistics costs could lower profit margins. This is a misperception that the main reason prices are low at Wal-Mart is because of the purchasing power of this company, but the main reason that prices are so low at Wal-Mart is because of the cost savings linked with the logistic planning. Cross docking: ________________________________________________________________ For better logistic planning Wal-Mart is using cross docking. Wal-Mart delivers about 85% of its merchandises uses a cross docking system [Ref 16]. Cross docking has enabled Wal-Mart to achieve economies of scale which reduces its costs of sales. Cross docking is a relatively new logistics technique and used in the retail and trucking industries to rapidly unite shipments from disparate sources and realize economics of scale in outbound transportation. The idea is to transfer incoming directly to outgoing trailers without storing them in between. Cross docking favors the timely distribution of freight and a better synchronization with the demand where the distribution centers essentially acts as a high throughput sorting facility. [Ref 17][Ref 18] Heres how it works: in a traditional warehouse, goods are received from vendors stored in devices like pallet racks or shelving. When a costumer (e.g. the costumer or perhaps a retail outlet) requests an item, workers pick it from the shelves and send it to the destination. In a

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cross dock, goods arriving from the vendor already have a costumer assigned , so workers need only move the shipment from the inbound trailer to an outbound trailer bound for the appropriate destination. Instead of goods spending valuable time in the warehouse, they are crossed from one loading dock to another in 48 hours or less. With cross docking the costly inventory function of a distribution center becomes minimal Wal-Mart has over 65,000 suppliers. Cross docking is one way Wal-Mart reduces its cost of sales by 2-3%. [Ref 19] It also helps them to cut down the labor and other handling costs involved in loading and unloading of goods. This is a contributing factor to allow Wal-Mart to offer lower prices. Wal-Marts Information Network: _______________________________________________ Cross docking requires continuous contact among Wal-Mart distribution centers suppliers and every point of sale in every store to ensure that orders can flow in and be consolidated and executed within the matter of hour so Wal-Mart operates a worlds largest private satellite communication system that daily sends points of sale data directly to Wal-Marts 4,000 vendors. Each register is directly connected to a satellite system and sales information is instantly relayed to Wal-Marts headquarters and distribution centers. Each store manager communicates via the satellite network with other managers to discuss sales and market trends and strategies. Put simply, as each store sells an item, a message is automatically set to the supplier of that item, who then knows to include a replacement in the next shipment (usually that day) to the nearest distribution hub. This degree of connectivity allows rapid response to inventory needs, and reduces dramatically the amount of inventory required. Telephone cost is cut down by 20 to 30% by using this network. [Ref 8] [Ref 20][Ref 21] So in this way information system is helpful is gaining competitive advantage for Wal-Mart.

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Conclusion
It is concluded that for the survival of a company, it is necessary to get a competitive advantage especially in this era of competition. It is analyzed that technology is playing a vital role in gaining competitive advantage. Either the company is large or small; the use of information systems can be a contributing factor to gain competitive advantage.

References
1) http://walmartstores.com/aboutus/7603.aspx 2) http://en.wikipedia.org/wiki/List_of_Wal-Mart_brands 3) http://walmartstores.com/pressroom/news/6108.aspx 4) http://www.walmart.com/ 5) http://www.samples-help.org.uk/mission-statements/wal-mart-mission-statement.htm 6) http://findarticles.com/p/articles/mi_m3092/is_n3_v27/ai_6333369/

8) Professor Vijay Govindarajan and Julie B. Lang, 2000, Wal-Mart Stores, Inc, available from http://mba.tuck.dartmouth.edu/cgl/research/case_studies.html

9) Suzanne vonder Porten,2005 Teaching Case: WAL-MART and Vancouver, Canada, available from http://www.google.com.pk/url?sa=t&source=web&cd=4&ved=0CCwQFjAD&url=http%3A%2F%2Fwww.c aseplace.org%2Fpdfs%2FSusanne_van_der_Porten__Wal_Mart_case.pdf&rct=j&q=hub%20and%20spoke%20system%20of%20walmart%2Bpdf&ei=VeRLTYq LO4HKhAfNwZi-Dg&usg=AFQjCNH2hw6N7BJcYbuer71gdstt6bvSyA 10) http://pressroom.target.com/pr/news/fastfacts.aspx

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11) http://www.searsholdings.com/careers/opportunities/stores/kmart.htm 12) http://seattletimes.nwsource.com/html/businesstechnology/2003790031_costcohawaii15.html 13) http://walmartstores.com/7659.aspx 14) http://marketingteacher.com/swot/walmart-swot.html 15) http://www.soopertutorials.com/business/strategic-management/1846-wal-mart-swotanalysis.html 16) http://people.hofstra.edu/geotrans/eng/ch5en/conc5en/crossdocking.html 17) http://logistics.about.com/od/tacticalsupplychain/a/cross_dock.htm

18) Chopra,Supply Chain Management,3/e page 57,available from

http://books.google.com.pk/books?id=rtjvMOO_1X4C&pg=PA57&lpg=PA57&dq=efficient+use+of+information+te chnology+by+walmart&source=bl&ots=i5LjFlrgnQ&sig=r8nGjf1Anz1zpvnsP3RgBHaOCRU&hl=en&ei=JupLTaHuAYH QhAeK7PCLDw&sa=X&oi=book_result&ct=result&resnum=5&ved=0CDIQ6AEwBA#v=onepage&q&f=false

19)http://www.reference.com/browse/Cross-docking 20) http://findarticles.com/p/articles/mi_m3092/is_n3_v27/ai_6333369/ 21) http://www.smthop.com/article.aspx?newsnum=794 22)http://findarticles.com/p/articles/mi_m3092/is_n12_v31/ai_12398577/pg_2/?tag=content;col1

23) Sung Min Kim Joseph T. Mahoney,Collaborative Planning, Forecasting, and Replenishment (CPFR) as a Relational Contract: An Incomplete Contracting Perspective,available from http://www.google.com.pk/search?hl=en&biw=1345&bih=558&q=CPFR+in+walmart&aq=f&aqi=&aql=& oq=

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