MGT 411 Week 4 Organizational Ecosystem Case Study

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MGT 411 Week 4 Organizational Ecosystem Case Study

Instructions

Complete the
Organizational Ecosystem Case Study assignment located in the Materials
section. Note: Formatting - all you need to do is copy the questions from the
worksheet and provide a response for each.

Click the
Assignment Files tab to submit your assignment.

Organizational Ecosystem Case Study

Wal-Mart Stores, Inc. is a leading company in its
industry and a widely recognized name, both domestically and internationally.
Additionally, Wal-Mart has taken steps to ensure the success of not only its
company but also their business ecosystem.

 

Wal-Mart Stores, established in 1969, is the
largest retail company in the world, with over 4,000 stores in 12 countries.
Wal-Mart has three types of retail stores: discount stores, supercenters, and
neighborhood markets, as well as Sam’s Club warehouse stores. Between the
various types of Wal-Mart and Sam’s Club stores, Wal-Mart Stores, Inc. offers
merchandise and services that range for grocery goods and household supplies to
tire and lube service, clothing, and vision centers. Additionally, Wal-Mart has
an online music store, a private label cosmetics brand, and pre-paid debit
cards for low-income US
customers. Some of the company’s private-label brands are Sam’s Choice, Equate,
No Boundaries, Mainstays, and Parent’s Choice. Wal-Mart also stocks several
licensed brands, including General Electric, Disney, McDonalds, and Mary-Kate
and Ashley. For the fiscal year ending in January 2008, Wal-Mart reported over $375
billion in revenue (Wal-Mart
Stores, Inc. Company Profile, 2008).

 

Wal-Mart has dominated its market, in part, due
to the way it approached its business ecosystem (Iansiti & Levien, 2004).
There are many examples of Wal-Mart’s ecosystem approach, including their
procurement system and their recent focus on more specialized stores.

 

Keeping its ecosystem in mind, Wal-Mart has built
a procurement system that not only enhances its performance, but the
performance and operation of businesses within its ecosystem. Wal-Mart Stores,
Inc. requires that all of its suppliers operate the RetailLink® system
(Requirements, 2008). RetailLink® is a one-of-a-kind system that
allows suppliers to receive real-time data regarding their product in
individual stores. Such real-time data allows suppliers to effectively plan for
and execute distribution, while also personalizing their product supply by
store. According to Iansiti & Levien (2004), “Wal-Mart’s procurement system
offers it’s suppliers invalueable real-time information on customer demand and
preferences, while providing the retailer with a significant cost advantage
over its competitiors” (p. 69).

 

Stankevich (2002) noted the success of Wal-Mart’s
system in terms of micromarketing and efficiency. Jon Ragsdale, vice president of
marketing at Dickies, discussed with Stankevich the way RetailLink®
brought to light the differences in demand for different sizes and colors of
products in different markets. Ragsdale noted,
“Before
RetailLink®, we were using
pretty much a cookie cutter approach to stores” (para. 10).      

 

In recent years, Wal-Mart has begun to take a
more specialized approach by offering different goods and adjusting the layout
of the stores based on location demographics. Once a one shop fits all store, Wal-Mart now has several stores that cater
to the needs of a specific location. One store in Plano, TX
has been adapted to appeal to the higher number of affluent customers in that
area. The store now offers consumer-electronic specialists, that are more
versed in the specifics of electronics than a typical sales associate. Also,
that particular store adapted the sporting goods section to have more of a
child focus, based on the notion that more affluent individuals purchase their
sporting goods from country clubs (Zimmerman, 2006).

In
terms of competition, Wal-Mart plays an interesting role. While the most
obvious conclusion is that Wal-Mart is the biggest competition for small
businesses and retailers, it is apparent that their approach to a business
ecosystem is also positive for small business owners. “For small manufacturers
and small consumer-goods companies, Wal-Mart is the customer they pray for and
the one that can propel their company into big-time sales. Wal-Mart is the
‘elephant’ they dream of bagging” (Campbell,
2005, para. 5).

Questions

 

After reading the case study on Wal-Mart, use the
case study and information from your weekly readings to answer the following
questions in 200 to 300 words each.

 

1.    
What is a business ecosystem? Do
all businesses function within an ecosystem? Why or why not?

2.    
What potential role does the
ecosystem play in Wal-Mart’s innovation efforts? Provide examples.

3.    
In terms of innovation and
creativity, what are the advantages and disadvantages of functioning within an
ecosystem?

 
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