final project report management information systems topic scm srm of walmart

Industry Walmart, which was established in 1962, has evolved over more than five decades to become the world’s leading retail chain.. By leveraging innovation, Walmart is crafting a unif

UNIVERSITY OF ECONOMICS AND LAW FACULTY OF INFORMATION SYSTEM

Dang Anh Nhu – K224161830 Huynh Le Dong Quan – K224161832 Nguyen Chi Khanh Trinh – K224161839

Ho Chi Minh City, April 26th, 2023

Members

Acknowledgements

To complete this report, we would like to express our deep gratitude to PhD Ho Trung Thanh We sincerely appreciate your enthusiastic guidance throughout the course and the time spent on the final report

We would like to sincerely thank all the professors in the Faculty of Information Systems, University of Economics and Law, VNU-HCM, for their dedicated knowledge imparted to us during our study days We would also like to thank the University of Economics and Law, VNU-HCM for including the course in the training program The knowledge we have acquired during this course is not only the foundation for future subjects but also a valuable asset for us to complete our projects in other courses perfectly

Sincerely, Group 7

Commitment

We declare that the course final project is the work of our whole team The project study and the performing process were carried out under the instruction of PhD Ho Trung Thanh

The project clearly enumerates and cites the sections that utilize references in the dedicated references section Concurrently, the information and findings shared on the subject matter are truthful, open, and accessible, representing the collective efforts of our team

Ho Chi Minh City, April 26th 2024 Group 7

2.1.1 Analyze market players and market share 31

2.1.2 Identify competitive advantages of the industry and how competitors deal with them 32

2.2 New market entrants 36

2.2.1 Analyze entry barriers in the industry 36

2.2.2 Analyze the switching cost of industry 37

2.3 Substitute products and services 38

2.3.1 Identify substitute products and services 38

2.3.2 Identify Characteristics of Substitute Products and Services 38

2.3.3 Differentiation between Walmart’s products and substitute products 40

2.4 Customers 42

2.4.1 Research on target customers 42

2.4.2 Building buyer for Walmart 46

2.4.3 From Buyer Personal, define how Customer can affect the company 47

2.5 Suppliers 48

2.5.1 Number of suppliers relative to buyers 48

2.5.2 Equipment and infrastructure 48

2.5.3 Switching cost (switching costs of suppliers) 49

2.5.4 Importance of Suppliers 49

References 51

List of Figures

Figure 1.1.1: Key Performance Indicators for Walmart [2] 9

Figure 1.2.1: Top of mind companies in retail chain on the world [3] 10

Figure 1.2.2: Leading retailers worldwide, 2021 chain retail sales in US [4] 12

Figure 1.2.3: Top 10 retail businesses in Vietnam in 2023 [5] 14

Figure 1.3.1: Sam Walton speaks to the community at opening of the first Walmart in Rogers, Arkansas [6]……… 16

Figure 1.3.2: Walmart's growth in the 1970s 17

Figure 1.3.3: Walmart's growth in the 1980s 17

Figure 1.3.4: Walmart's growth in the 1990s 18

Figure 1.3.5: Walmart's growth in the 2000s 19

Figure 1.3 6: Walmart's growth in the 2010s 20

Figure 1.3.7: The history behind Walmart's logo from 1962 - Now [7] 20

Figure 1.4.1: Overview about mission, vision and core values of Walmart [8] 21

Figure 1.5.1: Walmart Revenue in Fourth Quarter Report in 2023 [15] 25

Figure 1.5.2: The 10 largest companies in the world ranked by revenue in 2023 [17]

25

Figure 1.5.3: Top 10 world’s most valuable retail brands [20] 26

Figure 2.1.1: The Biggest Retailers in the U.S by Revenue in 2022 [23] 32

Figure 2.4.1: Demographic statics of Walmart customers in 2023 [28] 42

Figure 2.4.2: Number of Walmart stores in the USA in 2024 [29] 43

Figure 2.4.3: 2019 Retailer's shopper profiles, based on age [32] 44

Figure 2.4.4: 2019 Retailer's shopper profiles, based on generation [32] 44

Figure 2.4.5: 2019 Retailer's shopper profiles, based on gender [32] 45

Figure 2.4.6: 2019 Retailer's shopper profiles, based on income [32] 45

Figure 2.4.7: Best seller Walmart Items in 2023 [33] 46

List of Tables

Table 2.3.1: Comparison of Walmart's products substitute products 41

List of Acronyms

Chapter 1 Introduce to Walmart1.1 Industry

Walmart, which was established in 1962, has evolved over more than five decades to become the world’s leading retail chain Walmart has established a vast network of stores across the U.S and expanded its presence globally By leveraging innovation, Walmart is crafting a unified shopping experience that enables customers to make purchases whenever and wherever they prefer, both in physical stores and online The company is generating opportunities and providing value to its customers and communities all over the world Walmart runs more than 10,500 stores and a multitude of eCommerce sites across 19 countries It has a workforce of 2.1 million associates worldwide, with nearly 1.6 million based in the U.S alone [1]

Figure 1.1.1: Key Performance Indicators for Walmart [2]

Walmart has grown to become a dominant force in the retail industry, offering a wide range of products, including groceries, electronics, apparel, and more This company is known for its "Everyday Low Prices" and has built its reputation on offering quality products at affordable prices [1]

1.2 “Top of mind” in Walmart’s industry 1.2.1 In the world

Along with society's advancement, retail services have grown to be highly developed and well-known, with many well-known brands in addition to Walmart These businesses have established strong names and positions in the community with lots of devoted clientele Several well-known figures in this field worldwide are:

• Amazon is an American tech giant, founded by Jeff Bezos in 1994, initially starting as an online bookstore Since then, it has expanded to become the world's biggest online retailer, selling everything from groceries and household goods to electronics, books, and groceries With its cloud computing platform, Amazon Web Services (AWS), multimedia streaming via Amazon Prime Video, and a range of electronics, including the Amazon Echo, the company is also well-known for its technological innovations Amazon remains a dominant force in the global market, focusing heavily on technological advancements and consumer convenience

• The Schwarz Group is a leading international retail company headquartered in Neckarsulm, Germany Recognized primarily for its low-cost supermarket brands, Kaufland and Lidl, the group is the biggest retailer in Europe by sales From its humble beginnings as a food wholesaler in the 1930s, it has developed

Figure 1.2.1:

Figure 1.2.1: Top of mind companies in retail chain on the world [3]

into a major player in the retail industry, operating thousands of stores throughout Europe and beyond The company's strategy has proven successful in the competitive retail market as it focuses on offering customers high-quality products at affordable prices In addition, the Schwarz Group actively participates in community and environmental initiatives, aiming to incorporate sustainability and social responsibility into its business operations It is still growing its worldwide reach today, solidifying its standing as a major force in the market

• Costco is a global retail giant operating a chain of membership-only warehouse clubs known for offering bulk purchases at significantly discounted rates Costco was established in Seattle in 1983 and has expanded to rank as the fifth-largest retailer globally It's well-known for its extensive assortment of goods, which includes everything from electronics to groceries and clothes to outdoor living Low prices and large volume sales are the cornerstones of Costco's business strategy A small range of privately labeled goods and a rotating inventory keep customers coming back to discover new things Additionally, the company has gained customer loyalty through its food courts, optical departments, and gas stations - all of which are well-known for their reasonably priced and delicious offerings

• The Home Depot is a publicly traded company based in Georgia, employing an estimated 471,600 individuals In the United States, it holds a significant market share in at least seven sectors: Retail Trade, Home Improvement Stores, BBQ & Outdoor Cooking Stores, Online Hardware & Tool Sales, Online Small Electrical Appliance Sales, Online Large Kitchen Appliance Sales, and Lawn & Outdoor Equipment Stores Its most substantial market share is in the Home Improvement Stores sector, where it represents an estimated 51.6% of the total industry revenue The company is regarded as an All Star due to its superior market share, profit, and revenue growth relative to its competitors

Walmart and Amazon are pictured in the top two spots, reflecting the retail sales numbers for the United States in 2021 With astounding sales of $488.0 billion, Walmart leads by a wide margin, while Amazon comes in second with respectable but marginally lower sales of $398.8 billion This suggests that traditional retail giants like Walmart continue to hold significant market share, while e-commerce platforms like Amazon are strengthening their strong presence in the retail landscape, despite the highly competitive nature of the retail industry and the growing prominence of e-commerce

retail corporations Simultaneously, this market becomes appealing to even highly developing domestic brands due to its youthful population and rising average income Some big names in this industry are:

• Central Retail in Vietnam was established in 2012 with only the Fashion business After more than 10 years, Central Retail has become the largest multi-format foreign retailer in Vietnam that owns the retail brands GO!, Big C; Tops Market…, with 300+ stores, 39 malls across the country with more than 1,000,000 total square meter of retail space across 40 out of 63 provinces and cities The company provides employment and career opportunities for nearly 15,000 employees in Vietnam In Vietnam, the success of Central Retail is not only the results of business, but also a commitment of contributing to Vietnam’s prosperity and enhancing the quality of life of the people

• Saigon Co.op, formally Saigon Union of Trading Co-operatives, is a leading player Since its founding in 1996, the cooperative has grown to become one of the largest in the retail industry, operating a vast network of supermarkets, convenience stores, and shopping centers under the different sub-brands Co.opmart, Co.opXtra, and Co.op Food Saigon Co.op, well-known for its steadfast dedication to community service and quality, prioritizes supporting regional producers and environmental sustainability in addition to providing a large selection of goods Saigon Co.op continues to be a major player in forming Vietnam's retail scene as it spreads throughout the country, meeting the constantly changing demands of the country's growing consumer base

• AEON Group, founded in 1758 in Japan, is one of the largest retail corporations in Asia The group is well-known for having a vast network of supermarkets, specialty shops, and shopping centers With a number of sizable shopping centers and a dedication to environmentally friendly business practices, AEON has made a name for itself as a major player in Vietnam's retail development The company is committed to promoting economic growth, improving the community, and offering a wide range of high-quality goods and services to satisfy the various demands of its clientele The distinctive quality of AEON's presence in Vietnam is its culturally sensitive approach, which combines bringing international retail

standards and customer experiences to the Vietnamese market with local taste adaptation

• WinMart and WinMart+ are two retail chains owned by the Masan Group Since their inception in 2014, these brands have seen consistent growth, with over 131 WinMart supermarkets and close to 3,000 WinMart+ stores now operating across Vietnam They offer a wide range of products and services, catering to all customer needs and shopping preferences, from budget-friendly to luxury options This extensive and diverse offering ensures a satisfying shopping experience for all customers

• MM Mega Market Vietnam Company Ltd., a subsidiary of the BJC / TCC Group from Thailand, set up its first distribution center in Ho Chi Minh City in 2002 Over the past two decades, the company has grown significantly, establishing 21 wholesale distribution centers and supermarkets across the country, along with 5 fresh sourcing and supply centers, and 2 depots The company employs over 4,000 people and works with thousands of suppliers MM Mega Market Vietnam (MMVN) aspires to create a professional supply chain model that connects farmers and local manufacturers to consumers, with a focus on sourcing 90% of goods within Vietnam

Figure 1.2.3: Top 10 retail businesses in Vietnam in 2023 [5]

The picture displays the top 10 retail businesses in Vietnam for 2023 These businesses are mostly involved in the grocery and general retail industries, with Central Retail Vietnam at the top of the list, indicating a strong presence in the market A comprehensive picture of every company's reputation is given by the inclusion of various ratings, including those from internal surveys, the media, social media, and community surveys

Walmart is not featured in this list as it is not operational in Vietnam Walmart's global presence is extensive, but it does not encompass every market Markets like Vietnam may have regulatory, operational, or strategic reasons that are not conducive to Walmart's business model or they may choose to focus on other markets due to competitive landscapes or growth strategies It's also possible that Walmart has decided to partner with, invest in, or acquire local companies to capture market share instead of setting up their own stores

1.3 History

The Bentonville, Ark - based company traces its roots back to 1962 when it was founded by a local business man named Sam Walton, with the first location in nearby Rogers, Ark Those roots were embedded in highly rural areas, as Walmart chose its original path not in the big urban centers but in emerging suburbs and rural outposts that weren't being served by major retailers That was an opportunity Sam Walton aimed to leverage, and he wound up doing that on a monumentally successful basis, as he began to mold the Walmart brand into the consumer behemoth it has become today

In 1967, the Walton family operated 24 stores, generating $12.7 million in sales By 1969, the business was formally incorporated as Wal-Mart Stores, Inc The 1970s marked a period of remarkable growth, with “Mr Sam” expanding Walmart on a national scale, demonstrating the broad appeal of his vision In 1970, Walmart went public, with the first stock selling at $16.50 per share The following year, the first distribution center and Home Office were established in Bentonville, Arkansas By 1972, Walmart was listed on the New York Stock Exchange (WMT) and with 51 stores, Walmart’s sales reached $78 million In 1979, the Walmart Foundation was created Walmart’s sales hit the 1 billion USD mark per year, earning global admiration From that point forward, Walmart has grown to become the largest retail empire in the United States

Figure 1.3.1: Sam Walton speaks to the community at opening of the first

Walmart in Rogers, Arkansas [6]

Figure 1.3.2: Walmart's growth in the 1970s

In the 1980s, the first Sam's Club opened, serving small businesses and individuals, and the first Walmart Supercenter opened, combining a supermarket with general merchandise At that time, Walmart had 276 stores and employed 21,000 associates In 1983, The first Sam's Club opened in Midwest City, Oklahoma and Walmart replaced cash registers with computerized point-of-sale systems, enabling fast and accurate checkout By 1987, the company installed the largest private satellite communication system in the U.S., linking the company's operations through voice, data and video communication A year later, the first Walmart Supercenter opened in Washington, Missouri, combining general merchandise and a full-scale supermarket to provide one-stop shopping convenience and David Glass is named chief executive officer

Figure 1.3.3: Walmart's growth in the 1980s

By 1990, Walmart was the nation's No 1 retailer As the Walmart Supercenter redefines convenience and one-stop shopping, Everyday Low Prices goes international In 1991, through a joint venture with Cifra, a Mexican retail company, Walmart went global In 1993, Walmart celebrated its first $1 billion sales week A year later, Walmart expanded into Canada with the purchase of 122 Woolco stores Next, Walmart opens its first stores in China During the period 1997-1999, the enterprise achieved its first $100 billion sales year, the Neighborhood Market format was introduced with three stores in Arkansas and entered the United Kingdom with the acquisition of Asda

Figure 1.3.4: Walmart's growth in the 1990s

Walmart enters the new millennium dedicated to offering customers a seamless shopping experience, whether they are online, in a store or on a mobile device In 2000, Walmart.com was founded, allowing U.S customers to shop online and Walmart employs more than 1.1 million associates in 3,989 stores and clubs worldwide In 2002, for the first time, Walmart topped the Fortune 500 ranking of America's largest companies In 2005, Walmart played a significant part in disaster aid, donating $18 million and 2,450 truckloads of supplies to those affected by hurricanes Katrina and Rita Additionally, Walmart pledged a strong commitment to environmental sustainability, setting objectives to produce no waste, utilize only renewable energy, and offer products that are beneficial to both people and the environment By 2007, Walmart.com launched its Site to Store service, enabling customers to make a purchase online and pick up merchandise in stores

Figure 1.3.5: Walmart's growth in the 2000s

In the 2010s, Walmart committed to serving customers in a changing retail environment, leveraging both associates and technology to make it happen In 2011, Walmart expanded its business into South Africa by acquiring 51% of Massmart Holdings Limited and with the acquisition of Massmart in South Africa, Walmart surpassed 10,000 retail units around the world Walmart acquires 100% stake in Yihaodian, an e-commerce business in China, up from the 51% stake since 2012 In 2017, Walmart launched free two-day shipping on more than 2 million items, no membership required, Walmart acquired Moosejaw, ModCloth, Bonobos and Parcel Jet acquires ShoeBuy.com, which is later renamed Shoes.com and Walmart launches Project Gigaton, asking suppliers to help reduce greenhouse gas emissions from its supply chain by 1 gigaton By 2018, Walmart acquires Eloquii, Bare Necessities, and Art.com In 2019, First Walmart Health Center opens, Walmart launches InHome Delivery and free NextDay delivery from Walmart.com and Walmart insources its advertising business, now known as Walmart Connect [6]

Figure 1.3 6: Walmart's growth in the 2010s

From 1962 until now, Walmart has changed its logo 6 times to reflect many of its strategic goals and objectives

Figure 1.3.7: The history behind Walmart's logo from 1962 - Now [7]

1.4 Mission, Vision, Strategy, and Operation

Figure 1.4 1: Overview about mission, vision and core values of Walmart [8]

1.4.1 Mission

The mission statement of Walmart, which is “to save people money so they can live better,” encapsulates the company’s objective and the principles of its founder, Sam Walton Essentially, the company’s mission statement embodies a pledge to provide cost-effective solutions that improve the living standards of its customers

This concise declaration serves as a strategic guide that propels Walmart to persistently innovate and adopt effective business strategies Their goal is to make superior products available to a broad customer base at a reasonable cost Their extensive product range, consistent value propositions, and customer-focused operations enable Walmart to actualize this mission daily

Nonetheless, Walmart’s mission extends beyond just providing inexpensive products It aims to enhance its customers’ lives, indicating a commitment to societal welfare By offering accessible and economically viable retail solutions, Walmart contributes to improving living standards, demonstrating a dedication that transcends mere commerce

The mission statement’s wider global impact is also worth mentioning With Walmart’s global footprint, the goal of ‘helping people save money’ equates to

promoting economic stability in the regions where they operate This mission shapes their approach to various aspects of their international operations, from product procurement and supply chain management to store operations and employee engagement

This mission has enabled Walmart to rise as a reliable and beloved retail behemoth that consistently prioritizes its customers’ needs By advocating for value for money and continually aiming to positively impact their customers’ lives, they have succeeded in establishing lasting relationships that are crucial to their business expansion

Walmart’s mission statement is more than just a formal proclamation of their corporate objective; it’s a daily commitment - a vow they continually endeavor to meet in their pursuit to help people enhance their lives by saving money By ceaselessly seeking ways to provide added value for their customers, they effectively bring their mission from theory to practice, standing as a beacon of corporate excellence [9]

1.4.2 Vision

Every company aims to reach its long-term objectives, and to do so, it needs a guiding principle - a beacon that influences every strategic choice it makes Walmart’s vision statement is a reflection of this principle

Walmart’s vision statement is: “To become the best at delivering value to our customers, to learn how to sell for less, and to provide the best customer service possible.” These three elements of their vision highlight their strategic path - toward providing value, affordability, and exceptional customer service

Delivering value goes beyond merely offering products at low prices It involves supplying a broad range of high-quality products, consistently ensuring positive shopping experiences, and upholding a steadfast commitment to sustainability Walmart aims to meet its customers’ varied needs and continually surpass their expectations

When Walmart talks about learning to “sell for less,” it underscores their dedication to operational superiority They are constantly on the lookout for new

methods and technologies that can enhance efficiency and reduce costs without sacrificing quality Their commitment to affordability is a fundamental aspect of their brand, and they tirelessly strive to realize this through innovative supply chain management, logistical efficiencies, and cost-effective business practices

"Providing the best customer service possible" reflects Walmart’s ambition to establish new standards in customer satisfaction It’s about fostering a shopping environment where customers feel appreciated and listened to They aim to cultivate a culture of exceptional customer service among their employees - from store associates to top-level management Every facet of the customer journey - from product discovery to checkout - is crafted with great attention to detail

These elements of Walmart’s vision statement serve as a blueprint for their strategic planning They synchronize the efforts of their worldwide workforce to achieve this common vision In doing so, they ensure that every decision - whether it relates to merchandising, store layout, digital services, or sustainability - contributes to becoming “the best.”

Walmart’s vision statement acts as their guiding light - a compass directing their path towards a future where they stand unmatched in delivering value, reducing costs, and setting the benchmark in customer service The realization of this vision demands consistent effort, strategic insight, and an unwavering dedication to their principles - a challenge that Walmart is more than ready to take on [9]

1.4.3 Strategy

The strategy of Walmart pays attention to has a transition to an omnichannel market by having a various network of stores, and also deal with customers with the promise of Everyday Low Prices (EDLP)

Walmart extends an operational strategy where they charge ahead with digital transformation to become a more complete Omnichannel Marketplace to compete with competitors such as Amazon They involve the strategic placement of distribution and fulfillment centers, they can maximize the operational excellence, meet the needs of customers, and get the competitive retail landscape

With the Every Low Prices (EDLP) strategy Walmart can provide customers with unbeatable prices in the wide range of products Because of the lower average price for common goods compared to competitors about 15% [10] This keeps customers loyal and also offers the best deals with them

They also get the Multiple Discounts adds for pricing strategy Through seasonal promotions, clearance sales, or bundled deals, Walmart provides various avenues for saving customer’s money

Walmart also focuses on service for customers such as position retail giant as a comprehensive one-stop-shop that has extended the retail offerings Walmart’ aim to seamlessly integrate into the basic lives of customers, providing not only products but also necessary services [11]

1.4.4 Operation

Walmart pays attention to having a design of service by sympathizing with the customers Through focus on minimal production costs, they can easily mass-produce They also maximize efficiency of retail service operations [12]

Walmart also utilizes behavioral analysis, forecasting, and continuous monitoring to understand and satisfy concerns in the decision area of operation management They analyze customers' data and employees- in the e-commerce and physical stores, for the company's process and also design equipment, tools, …

They have the successful power of suppliers through the supply chain By integrating with advanced information systems They have the ability to minimize costs of operation Systems enable managers in deciding when to transfer the huge amount of goods across the supply chain.[13]

Not only does the supply chain utilize information systems but also inventory does They focus on vendor-managed inventory models and just-in-time cross-docking By notice when to deliver goods based on real-time so they can minimize the issues of stockouts So on the just-in-time cross-docking, they can minimize the size of inventory and support cost-minimization [14]

1.5 Walmart’ position

Figure 1.5.1: Walmart Revenue in Fourth Quarter Report in 2023 [15]

Walmart's third quarter 2023 results show strong revenue growth An increase of 7.3% over the same period last year, total revenue in the quarter reached 165 billion USD E-commerce revenue at Walmart U.S continued to be a bright spot with growth of 17% in the fourth quarter [16]

Figure 1.5.2: The 10 largest companies in the world ranked by revenue in 2023 [17] Walmart topped the rankings with revenue of $638.78 billion, far exceeding the revenue of Amazon, the second-ranked company, with $554.02 billion And there's a big gap in revenue between Walmart and the other companies in the 10 largest companies This shows that Walmart is the world's leading retail corporation with a revenue scale that surpasses direct competitors as well as large corporations in many different fields [17]

The huge workforce is another factor that affirms Walmart's position as a large employee team with about 2.1 million people working globally This number represents Walmart's enormous influence on the world economy [18]

With huge revenue, superior to competitors in the same industry, wide scale of operations and powerful workforce [19], Walmart deserves the position of “King of retail" on a global scale

Figure 1.5.3: Top 10 world’s most valuable retail brands [20]

Although far away from Amazon in terms of brand value, this gap is still much larger than other retail brands in the top 10 such as The Home Depot (61.1 billion USD), Costco (46.6 billion USD) or Lowe's (31.6 billion USD) [20]

As the only brand in the top 3 that belongs to a retail media company, this affirms Walmart's competitiveness and adaptability to the e-commerce wave [20]

With its large scale, brand and potential, Walmart is expected to continue to maintain the No 2 position, while also paying attention to innovation and improving customer experience to match Amazon [20]