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WAL-MART - A Case Study in Managing Technical Transitions Managing Technical Transitions Prof Michael Lawless February 24 2001 Prepared by Andrew Bender Ann Howell Amy Lavin David Torgerson Founded in 1962 by Sam Walton Wal-Mart followed an amazing pattern of success and growth eclipsing all other US department store retailers by the early 1990s In early spring 2001 Wal-Mart enjoyed a huge market capitalization of over 230B which was down from highs of nearly 300B in early 2000 Over the last year however Wal-Mart had suffered a number of failures in its Internet-based operations as it tried feverishly along with many other traditionally bricks-and-mortar companies to make a transition to the Internet As much of the commotion in the markets relative to the Internet subsided due to a slowing economy and a number of high-profile dot-com failures Wal-Mart continued to experiment with its Internet presence and corporate strategy In this paper we discuss Wal-Mart and its technical transition to the Internet First we examine the company from a value chain and core competency perspective to gain insight on what value the company brings to the table both in its traditional and Internet operations We give a synopsis of Wal-Marts recent and current online philosophies and then turn to Wal-Marts strategy as it relates to the transition Finally we provide an analysis of Wal-Marts prospects and recommendations for the future Sources of Value Wal-Mart had always invested heavily in infrastructure They were among the first to use point-of-sale Uniform Product Codes UPC scanning and intra-store radio frequency RF transmission of product UPC and pricing information between central store inventory systems and personnel with scanners on the store shelves However their most valuable infrastructure investments were made at a significantly higher level A satellite system connecting all stores was initially installed in 1983 and
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