Walmart, Information System
Q：Large numbers of companies are using their information systems as a strategic tool to improve their competitive advantage. Choose one of these companies (Toyota or Wal-Mart) and prepare an essay of 1500 words on: a) how information systems are used strategically by the company to gain a competitive advantage b) discuss if it is possible for the company to maintain this advantage in the future.
You are expected to use the competitive forces and/or value chain model in your analysis.
In this essay, Wal-Mart was chosen to be the case to analysis. Firstly, some basic concepts will be mentioned, including …show more content…
Secondly, medium to high threat of substitution, many companies sell exactly the same range of items, but at higher prices. The third one I want to mentioned is power of buyers, which is high because many firms offer the same goods and services, but Wal-Mart can be successful is because of providing at lower price. “Everyday low price!”-- Obviously, cost leader strategy is successful. As can be seen above, IT acts as an important and successful role and be used strategically by Wal-Mart to gain competitive advantages, as a result, Wal-Mart will be able to offer lower priced items and good costumer services, both of which will create brand loyalty, prevent Wal-Mart market share from diminishing. The competitive advantages of Wal-Mart in the future, considering the threat of entry and substitution first, there is a certain risk of entry from a firm which offers diversified goods and does not compete with Wal-Mart in terms in price. Although there is some threat of entry into the “Discount and Variety” industry, this is does not pose a direct threat to Wal-Mart since a different segment of consumers will be targeted by the entrant. Another risk is its competitors may link together in an effort to stop the retail giant from continuing to expand at such rates, Wal-Mart could enable them to compete against these low-cost innovators by sacrificing short term profits and implementing predatory