Wal-Mart's eBusiness Strategy

Wal-Mart has grown from a little discount store to FORTUNE's most admired company, replacing Exxon Mobil on top of the Fortune 500 in 2002 (Useem, 2003). In 2003, Wal-Mart achieved over $240 billion in sales; in fact, on one day that year, its sales of $1.42 billion were larger than the GDPs of 36 countries (Useem, 2003). It is the biggest employer in 21 states "with more people in uniform than the U.S. Army" (Useem, 2003). According to a survey by WSL Strategic Retail, "about 40 percent of women aged 18 to 70 shop at Wal-Mart once a week" (Drucker, 1999, p. 47). Over 100 major manufacturers that supply Wal-Mart including Procter & Gamble, Colgate-Palmolive, and the Gallo Winery have set up offices near the Bentonville, Arkansas Wal-Mart headquarters in order to better service the mega-retailer (Gosman & Kelly, 41).

There are a number of reasons for Wal-Mart's tremendous success, not the least of which is its use of the Internet.

Since Wal-Mart has been around for 41 years and predates online business, the Internet was not always part of the company's strategy. However, Wal-Mart has eagerly embraced technological advances in marketing and supply chain technology and is now enjoying the benefits of doing business over the Internet. Because the Internet's effect on productivity is still in the early stages, the ultimate impact on Wal-Mart's mega-billion sales has yet to be seen, but it is certain that the numbers will only go higher.

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ormous profit field for Wal-Mart. Since 800 million people are on the Internet every day for, on average, 30 to 45 minutes, Internet users are a captive audience (Goen, 2). A whopping 50% of U.S. households have "always-on" Internet connections that keep them connected to the Internet 24 hours a day, seven days a week (Goen, 2). Online sales is not the only advantage Wal-Mart gains from the Internet. It also uses the Internet to achieve outstanding supply chain management via virtual warehousing and B2B electronic ordering. In conjunction with its other technological innovations like cross-docking, Wal-Mart has become extraordinarily efficient at keeping its inventory stocked without actually storing many items in a warehouse. Wal-Mart uses its own proprietary supply chain system, Retail Link, and it requires all of its over 7,600 suppliers to receive and manage orders through the system, which was transferred to the Internet in 1997: Suppliers upload purchase orders from Wal-Mart and send invoices through this system. Retail Link also provides numerous reports to suppliers on how well their products are selling, the result of price promotions and on inventory levels. The system is a combination of NT servers that handle c

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