Walmart’s Competitive Litmus Test and Industry Analysis

Application and Asset: Description

Retaining competitiveness in the environment of the global market is a challenging task. At Walmart, the focus on integrating IT assets into the framework of the organization and focusing on their regular update can be seen as the crucial strategy of the organization. At present, it is the network of 42 distribution centers that constitute the company’s greatest IT asset and contributes to its growth.

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The asset can be described as a custom-built infrastructure since it was designed specifically for enhancing the organization’s supply chain management and improving the information management process between Walmart and its distribution centers. Unlike other companies that use distribution centers as the means of consolidating their systems, Walmart has managed to create the IT framework within which each participant has a significant amount of independence.

What Makes the Asset Valuable

When viewing the system from an operational standpoint, one must admit that it helps enhance the corporate processes significantly, reducing the threat of data mismanagement and allowing the active sharing of the available knowledge. From the strategic viewpoint, the adoption of the distribution center network that Walmart has constructed also adds to the value of the company. Specifically, the selected approach helps accumulate value by creating a system of knowledge and a database that will inform the company’s further choices. The specified ability sets Walmart apart from its rivals such as Target, which does not focus on accumulating knowledge systematically. Herein lies the value of the asset; it allows not only arranging the data flow but also promoting a corporate culture of information management.

What Makes the Asset Rare

One could argue that arranging a network within which a company and its partners can communicate should not be deemed as a rare opportunity. Indeed, the specified process is complicated yet plausible. What contributes to the rarity of the network designed by Walmart is the scale of the network and the range of data that the organization can embrace with the help of the specified system.

Furthermore, the use of the network makes cross-department communication especially efficient, which is a rather rare opportunity in the contemporary global market (McMillon, 2016). In contrast to Walmart, its rivals such as Target prefer to use more common competitive advantage strategies, thus becoming less discernable in the global market. Thus, the asset should be seen as a unique and important element of Walmart’s functioning.

What Makes the Asset Inimitable

The unique system that connects Walmart to its distributors should be regarded as the key selling point of the network as the inimitable aspect thereof. The asset implies linking the organization to its distributors in a specific way that requires taking the characteristics of the specified distributors into account. The infrastructure that connects the specified distributors is analyzed carefully to locate the transportation system that optimizes the essential processes. However, by far the greatest effect that the proposed network has is the opportunity to integrate disruptive innovations into the distribution channel immediately and seamlessly (Andriole, Cox, ‎& Khin, 2017).

Walmart’s rivals, such as target and Costco, in turn, prefer to rely on innovative solutions that have already been tested and, thus do not distinguish them from other firms. As a result, delays are avoided successfully, and the necessary items are delivered within the expected deadline.

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What Makes the Asset Nonsubstitutable

Without the specified asset, Walmart would not be able to function properly. Particularly, the absence of the network would mean the inability to perform key processes in a timely fashion and distribute information evenly across the distribution channel. In addition, the introduction of innovations into the firm’s functioning would lead to hiccups in its production processes. The use of the network has contributed to the successful management of data and the promotion of innovative decisions (Ladd, 2018). Walmart’s asset stands in striking contrast to the ones of its rivals such as Target and Costco, which resort to using the IT assets that can be easily replaced by substitutes. Therefore, the existing network can be seen as nonsubstitutable and essential to Walmart’s success.

References

Andriole, S., Cox, T., ‎& Khin, K. M. (2017). The innovator’s imperative: Rapid technology adoption for digital transformation. Chicago, IL: CRC Press.

Ladd, B. (2018). Playing to its strengths: Why Walmart must focus on its stores and logistics. Forbes. Web.

McMillon, D. (2016). How Walmart is transforming to better serve customers. Web.

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StudyCorgi. (2021, May 21). Walmart’s Competitive Litmus Test and Industry Analysis. Retrieved from https://studycorgi.com/walmarts-competitive-litmus-test-and-industry-analysis/

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"Walmart’s Competitive Litmus Test and Industry Analysis." StudyCorgi, 21 May 2021, studycorgi.com/walmarts-competitive-litmus-test-and-industry-analysis/.

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StudyCorgi. 2021. "Walmart’s Competitive Litmus Test and Industry Analysis." May 21, 2021. https://studycorgi.com/walmarts-competitive-litmus-test-and-industry-analysis/.

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StudyCorgi. (2021) 'Walmart’s Competitive Litmus Test and Industry Analysis'. 21 May.

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