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Executive summary
Wal-Mart is a famous retailer in the world. Its reputation is not only in the low-price level, but also in the way to apply many advancement in information technology to create competitive advantages for its own. Considering the significance of information technology strategies in WalMart will bring an concrete view to consider how to overcome harsh competition in the modern market.

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CONTENT
I. Introduction of Wal-Mart.3 II. A brief description of Wal-Mart.....................................................................3
1. Products..3 2. Competitive advantages.3 2.1 corporate structure...3 2.2 corporate culture..4 2.3 technologies.4

III. Porters competitive forces analyses 5

1. The threat of entry of new competitors..6 2. The bargaining power of suppliers.6 3. The bargaining power of customer6 4. The threat of subsitute products or services...7 5. The rivalry among existing firms in the industry...7

IV. The roles of the Internet in overcoming Porters forces7 V. Conlusion8

APPENDIX..8

I.

E0800197 Introduction of Wal-Mart.

Wal-Mart Stores, Inc. is an American public corporation that runs a chain of large, discount department stores. The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972. It also owns and operates the Sam's Club retail warehouses in North America.Walmart operates in Mexico as Walmex, in the United Kingdom as Asda, in Japan as Seiyu, and in India as Best Price,etc. Wal-Mart Wal-Mart is the world's largest and most profitable retailer, with $44 billion in 1992 sales and 380,000 employees. Furthermore, it can be considered as an economic force, a cultural phenomenon and a lightning rod for controversy.

II.

A brief description of Wal-Mart.

1. Products:
Wal-Mart all started with a simple philosophy from founder Sam Walton: Offer shoppers lower prices than they get anywhere else. That basic strategy has directed Wal-Mart's culture and driven the company's growth.Wal-Mart has grown substantially over recent years, and has experienced global expansion. It becomes a powerful retail brand which has a reputation for value for money, convenience and a wide range of products all in one store.

2. Competitive advanges of Wal-Mart.

There are many factors that contribute to the success of Wal-Mart and build up its 1st position in retail industry such as everyday-low-price (EDLP) position, low cost structure, streamlined logistics and distribution network, its information systems prowes, and its partnerships with vendors. 2.1. Corporate structure: low-cost structure According to a 2001 count, the company operated 1,651 Wal-Mart discount stores, 1,026 Wal-Mart supercenters, and 486 Sam's Clubs. Neighborhood markets were just getting started, so Wal-Mart had only 26 in operation in mid2001, Mauldin said. In addition, the company operated 1,118 stores in countries other than the US. Each region is supervised by a Regional Vice President (RVP), who is based in Bentonville and travels for three weeks out of each

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month to the region. Because the regional management is based in Bentonville, Wal-Mart has an unusually high concentration of executives and managers based in the Home Office. Regional management meets at least weekly with Bentonville-based corporate and executive leadership to discuss developments in the individual stores. Every stores has its own managers. The close coordination between each its components makes its operation efficiently and effectively. 2.2. Corporate culture: Frugal corporate cultures can be used to describe about Wal-Mart. The leadership and work attitudes lay at the root of Wal-Marts competitive advantages. Its five deserve special attention includes focus, correction of errors, constructive paranoia, thrift, and a "we can make it better" attitude. Its executives believe that perpetuating those charateristics is one of their chief jobs. They dedicate the first Saturday meeting of every month to culture, asking one or two managers to give a prepared talk on what the culture means. They also lead obligatory culture training for all new managers. During training sessions at the Walton Institute, they teach trainees about everything from expense control to continuous improvement. 2.3. Technologies. The use of information technology has been an essential part of Wal-Mart's growth. A decade ago Wal-Mart trailed K-Mart, which could negotiate lower wholesale prices due to its size. One of Wal-Mart's strategies for keeping pace was a point-of-sale system, a computerized system which classifies each item sold, finds its price in a computerized database, creates an accurate sales receipt for the customer, and stores this item-by-item sales information for use in analyzing sales and reordering inventory. First, handling information efficiently, and using of this information effectively help Wal-Mart avoid overstocking by learning what merchandise is selling slowly. Over a 5-year period, Wal-Mart invested over $600 million in information systems. Consequently, Wal-Mart's inventory and distribution system become one of the most effective systems in the world. Next, telecommunications are also made use in Wal-Mart. The availability of direct links from its stores to its central computer system and from that system to its

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supplier's computers gives an impulse for the operation. It brings automatic reordering and better coordination. Knowing exactly what is selling well and coordinating closely with suppliers permits Wal-Mart to keep less money in inventory than many of their competitors. At its computerized warehouses, only 10% of the floor space in Wal-Mart stores is used as an inventory area, compared to the 25% average for the industry.In addition, with better coordination, the suppliers can get many benefits such as steady manufacturing runs, lower costs, and passing some of the savings on to Wal-Mart and eventually the consumer. Daily sales data are got directly from Wal-Mart stores through about 3,800 vendors. Among them, 1,500 vendors have the same decisions and analysis softwares that Wal-Mart's own buyers use to check how a product performs in various markets. Beside computers and telecommunications equipment, The bar code scanner is the basic technique of the point-of-sale system. It is useful to record the sale of each item and make sure that information available immediately for both rearranging and sales analysis. The bar code scanners was firstly used in the 1970s. After two decades, it becomes a competitive necessity for large grocery stores and retailers. Along with the adoption of any information technology, development and acceptance of bar codes required agreements on standards. It means that it is necessary for the industry to develop a universal product code (UPC) system, a standard method for identifying products with numbers and coding those numbers as the type of bar code shown in the photo. The UPC codes that we see generally today were chosen from a number of alternatives developed by different companies. Although bar codes hold some problems such as unnecessary price stamping, overcharges, the imperfect of system of updating the prices, etc, it has brought a range of benefits which WalMart and other retailers have realized.

III. Porters Competitive Forces Analyses.

Wal-Mart is the Worlds largest grocery retailer. However, being number one is synonymous with being the target of competition, locally and globally. That makes the control of Wal-Marts empire become more and more important. According to Porters model, there are five major forces that can put its position in danger. They are threat of substitute products, the threat of established rivals, the threat of new entrants, the bargaining power of suppliers and the bargaining power of customers. Wal-Mart is not the exception of that threats.

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1. The threat of entry of new competitors. The threat of new entrants is the possibility that new firms will enter the industry. WalMart had created barriers for other retailers to enter the market. With its wellestablished brand name and low-priced products, other retailers will need to undertake an expensive marketing campaign to introduce the products to customers. Thus, a little among them can get over the threat of being eliminated. However, those entry barriers has changed over time, particularly in recent decades, with the development of the Internet. Now, competitors frequently just need to set up a Website to display and sell products directly. Low start-up costs and nearly no frontage expenses take it easy for them to keep the low prices. The development of many famous online retailers such as Amazon, Ebay is obvious examples. In addition, Internet also elimilates the barriers of geographical distances. Now, Wal-Mart has to compete with not only local but also global retailers directly, etc. Consequently, the market share of Wal-Mart becomes smaller. 2. The bargaining power of suppliers. The term 'suppliers' include all sources for inputs that are necessary to provide goods or services. The bargaining power of suppliers, therefore, refers to the ability of suppliers to control the price of products and services. As an intermediary, Wal-Mart suffers from this bargain created by producers in some extent and at the same time, create that for customers. With the reputation of everyday low-prices, it is easier for Wal-Mart to establish customers trust. Trust-worthy information of products with high competitive prices makes Wal-Mart become the first choice of many consumers. However, because of the development of the Internet, customers have different choices. By surfing the Internet, they can find alternative retailers and compare prices faster and easier, accordingly, the low prices turn not to be the outstanding trait of Wal-Mart. This will decrease profitability of Wal-Mart in some extent. 3. The bargaining power of customer. It can be described as the market of outputs: the ability of customers to pressurize sellers to change the prices. Because of the Internet which changes in the nature of competition inluding the undifferentiated productst, low switching costs, and the available of information, it is the possibility for the customers to increase their bargaining power.

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4. The threat of subsitute products or services. In retail industry, advancement and implement of services have important roles in competition. Especially, along with the application of the Internet advancements, the threat of being subsituted of Wa-Mart become higher. By trading online, others retailers can offer lower price than normal because they do not have to suffer expensive costs such as employment, frontage cost, etc. There are availability of alternative products with lower prices for the same using purposes. They could potentially attract a significant proportion of market volume and hence reduce the potential sales volume for Wal-Mart. 5. The rivalry among existing firms in the industry. The competition in the market is usually harsh. However, It becomes more and more difficult for Wal-Mart in recent year with the development of information technologies, especially, the flooding of the Internet. Many competitors consider Wal-Mart as an successful example to follow, and they will quickly study and match its features to remain competitive. Therefore, they can have the same traits which used to competitive advantages of Wal-Mart. It make the differentiation among competitors weaker. In recent year, "While it's the largest retailer in the United States, it's not the dominant online retailer in the United States, and this appears to be an attempt to increase its position in the online space" said Albert Greco, professor of marketing at New York City's Fordham University. Associating with the appearance and development of Internet, the nature of the competition has changed. Its overall impacts, according to Porter (2001), increase competition, and affect profitability negatively.

IV. The roles of the Internet in overcoming Porters Forces.

Countering Porters five forces requires Wal-Mart to build different strategies. Along with automatic inventory replenishment system which is a fundamental part in reducing inventory storage requirements, Using the Internet becomes one of the most important strategies. WalMart has created both online and offline sales operations which are termed click-andmortar, combining both brick-and-mortar and e-commerce operations. Wal-Mart has started selling a range of discount on its website. By this way, they help customer easier to find demanded products quickly. Through Walmart.com site, nearly 1 million items,

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including many kinds of products such as baby products, sports memorabilia, health and beauty products, etc, are sold online. In online marketplace, where a lot of competitors are selling the same products, price is the easiest way to distinguish retailers themselves, thus, Wal-Mart countinues to follow everyday-low- prices strategy. However, this method creates the price war between Wal-Mart and other retailers and it is not benefitable in the long run because from a game-theory perspective, price wars are usually negative-sum games: everyone loses. The best way for Wal-Mart to win a price war, then, is not to play in the first place. However, it is hard to follow this. Instead choosing that method, they absolutely can take advantages of an safer one: concerning with quality of products and customer services (customer-orientation strategy). Web-based systems are particularly effective in this case because they can provide a personalized, one-to-one relationship with each customer. With the reputation, it is reasonable for Wal-Mart to be accepted by almost online customers. Moreover, they can make use of Internet to advertise the services and products with lower costs than traditional methods. Those strategies is feasible for Wal-Mart to hold problems from high competitiveness in the market.

V. Conclusion.
Wal-Mart is one of the biggest retailers in the world. It brings customers products and services with high quality at lower prices. However, to remain this position, it is necessary to continue improving technologies, especially, applying new cutting-edges to create the competitive advantages in the increasing competitive market.

Appendices:
1. Competitive Advantage and strategic information systems. P38-39. Introduction to information systems- supporting and transforming business. R. Kelly Rainer, Jr; Efraim Turban; Richard E. Potter, 2007. 2. Wal-Mart. <http://en.wikipedia.org/wiki/Wal-Mart> 2. The Amazon Wal-Mart price war. by James Surowiecki November 9, 2009

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<http://www.newyorker.com/talk/financial/2009/11/09/091109ta_talk_surowiecki#ixzz0ZS FRWzOK>