This retailer has a reputation for LOWER PRICES… but do you know why and how it gained that competitive advantage?
| From the desk of Miles Everson: Hi, everyone. Happy Tuesday! Welcome to “Return Driven Strategy (RDS)!” For those of you who don’t know yet, RDS is a pyramid-shaped framework with 11 tenets and 3 foundations. Created by my friend and colleague, Professor Joel Litman, and his co-author, Dr. Mark L. Frigo, these principles help businesses achieve their organizational objectives. For this article, let’s delve deeper into the 1st foundation of RDS. Continue reading below to know this multinational retailer’s genuine asset that enables it to become a return driven business. |
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This retailer has a reputation for LOWER PRICES… but do you know why and how it gained that competitive advantage? In the bustling world of retail, where split-second decisions can make or break a business, EFFICIENCY reigns supreme. Picture a colossal machine, humming with precision, effortlessly coordinating a myriad of complex tasks behind the scenes… This is the reality for the world’s most successful retailers, who harness the power of advanced technology to streamline their operations and stay ahead of the competition. At the heart of this technological marvel lies the Enterprise Resource Planning (ERP) system, a powerful tool that integrates every aspect of a business—from supply chain management to financial oversight and human resources. This is not just a software solution but also a game-changer , a genuine asset driving the relentless pursuit of retail excellence! Let’s delve into how this remarkable system transforms the landscape of one of the industry’s giants… Unpacking Walmart’s Powerhouse to Drive Retail Success
Walmart, a titan in the retail industry, exemplifies how leveraging advanced technology can transform operations and propel a company to unparalleled heights. One of the unsung heroes behind Walmart’s colossal success is its robust ERP system. For Walmart, this is not just a technological tool but also a genuine asset driving the company’s relentless pursuit of excellence. In the book, “Driven,” authors Professor Joel Litman and Dr. Mark L. Frigo state that ERP systems help connect the disparate functions of a firm and better manage large corporations. In Walmart’s case, the system is second-to-none. It allows the firm to have a strong handle on exactly what customers are buying and when. With a unique asset such as this, Walmart has been able to garner over 10% of all U.S. retail purchases through its stores. In fact, after the 9/11 terrorist strike in the U.S. in 2001, Walmart was one of the first to stock its shelves with an abundance of American flags! As with other natural disasters, the company is often the first to have ample supplies needed by people struck by such disasters. This shows that time and again, the ERP system has given Walmart a knowledge base and an operational agility that possibly no other retailer enjoys. Here are further explanations on how ERP continues to fuel Walmart’s success:
The positive outcomes of Walmart’s ERP system are evident in various facets of its operations and bottom line. By optimizing its supply chain and inventory management, Walmart has significantly reduced costs associated with overstocking and stockouts. These savings are often passed on to customers in the form of lower prices, reinforcing Walmart’s reputation for unbeatable value. Automation of routine tasks and better resource allocation has also led to substantial efficiency gains for the company as a whole. Employees can focus on more strategic tasks, thereby improving overall productivity and operational efficiency. Additionally, with access to real-time data and advanced analytics, Walmart’s management team can make quicker, more informed decisions. This agility is crucial in the fast-paced retail environment, allowing Walmart to stay ahead of trends and respond swiftly to market changes . What’s more? Walmart’s ERP system is scalable, supporting the company’s growth and expansion efforts. As Walmart continues to open new stores and enter new markets, the ERP system ensures operations remain seamless and consistent across all store locations . Overall, Walmart’s ERP system is more than just a technological infrastructure; it is also a cornerstone of the company’s strategy for success. According to Professor Litman and Dr. Frigo, the company has dominated its targeted customer groups far beyond other retailers so efficiently that even with the lowest prices, Walmart sustains the highest long-term track record of returns of any retailer. Others simply have not been able to develop such a strong ERP system for managing the incredible logistics behind a company that’s bigger than many countries. That’s why for Professor Litman and Dr. Frigo, this singularity creates a foundation for the firm to dominate considerably large customer groups, fulfill their needs uniquely, and generate incredible returns and wealth. Clearly, by streamlining operations, enhancing efficiency, and providing critical insights, the ERP system empowers Walmart to deliver value to its customers, employees, and shareholders! As the retail landscape continues to evolve, Walmart’s investment in ERP technology positions it to navigate future challenges and capitalize on new opportunities, solidifying its place as a retail powerhouse in the years to come. — If you’re looking to gain a better understanding of Return Driven Strategy and Career Driven Strategy, we highly recommend checking out “Driven” by Professor Litman and Dr. Frigo. Click here to get your copy and learn how this framework can help you in your business strategies and ultimately, in ethically maximizing wealth for your firm. Hope you found this week’s insights interesting and helpful.
Stay tuned for next Tuesday’s Return Driven Strategy! In a talent-starved jobs market, competition for the best contractors has, and will continue, to remain stiff. Learn how you can remain competitive in the realm of talent engagement in next week’s article! |
Miles Everson
CEO of MBO Partners and former Global Advisory and Consulting CEO at PwC, Everson has worked with many of the world's largest and most prominent organizations, specializing in executive management. He helps companies balance growth, reduce risk, maximize return, and excel in strategic business priorities.
He is a sought-after public speaker and contributor and has been a case study for success from Harvard Business School.
Everson is a Certified Public Accountant, a member of the American Institute of Certified Public Accountants and Minnesota Society of Certified Public Accountants. He graduated from St. Cloud State University with a B.S. in Accounting.
