University
of Phoenix Material

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?

References

Campbell,
A. (September 19, 2005).
On Wal-Mart, small businesses and business ecosystems. Small Business Trends. Retrieved June 13, 2008 from http://www.smallbiztrends.com/2005/09/on-wal-mart-small-businesses-and.html/

Iansiti, M. and Levien, R. (March 2004).
Strategy as ecology. Harvard Business
Review. 82(3). 68-78. Retrieved on June 13, 2008 from Ebscohost database.

Requirements. (2008). Wal-Mart. Retrieved on June 16, 2008
from http://walmartstores.com/Suppliers/248.aspx

Stankevich, D. (March
1, 2002). Sizing
the market: Wal-Mart masters the micromarketing of clothing. Velocity Company. Retrieved on June 16,
2008 from http://www.velocity.biz/company/pr_sizing_walmart_retaillink.htm

Wal-Mart Stores, Inc. Company Profile. (May
2008). Datamonitor Business
Information Center.
Retrieved on May 30 from Marketline
Business Information
Center.

Zimmerman, A. (2006, September
7). Thinking local: To boost sales, Wal-Mart drops
one-size-fits-all approach. The Wall
Street Journal. p. A1. Retrieved on June 13, 2008 from
ProQuest database.