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Walmart Resources and Capabilities

In: Business and Management

Submitted By suteranil
Words 1354
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MBA 591 – Summer 2011 Faculty of Business Administration Bilkent University July 5, 2011

Resources and Capabilities of Wal-Mart

Wal-Mart had enough financial resources to make capital investments to improve its operations and labor productivity. Most important investments were technological investments such as the UPC (Uniform Product Code) infrastructure, the computerized system within stores and the satellite network that enabled almost real-time communication among the stores, the distribution centers and vendors. These technological resources can also be classified as equipment related resources. As a result of these resources, Wal-Mart had strengthened capabilities in financial management, purchasing, administration, inventory management, labor productivity and store management.

The computerized system within the stores enabled Wal-Mart to wire the merchandise requests of the stores directly to the central computer at the related headquarter, which functioned as a distribution center. In case the stock levels were lower than the critical levels, the merchandise could be reordered directly from the related vendors thanks to this computerized system. This system not only enabled to track inventory, sales and accounting functions but also strengthened the bargaining power in purchasing of Wal-Mart. Each vendor could supply no more than 2.8% of total purchase of Wal-Mart. With the $20 million worth of satellite network investment, Wal-Mart could ease the real-time communication among the stores, the distribution centers and vendors. This investment also enabled to save from the administrative costs, especially telephone costs, up to $10 million and increase the efficiency in administrative meetings hold as a...

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