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TABLE OF CONTENTS

CHAPTER PAGE

INTRODUCTION...........................................................................................................................2

QUESTION A...............................................................................................................................3-4

QUESTION B...............................................................................................................................5-8

QUESTION C.............................................................................................................................9-11

QUESTION D................................................................................................................................12

QUESTION E...........................................................................................................................13-14

QUESTION F................................................................................................................................15

CONCLUSION..............................................................................................................................16

REFERENCES……………………………………………………………………………………17

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Introduction

Management information system (MIS) become a pivotal to an organization in supporting as


a tool to achieve its vision and mission. Information systems gain their importance by processing the
data from company inputs to generate information that is useful for managing the operations. MIS
not only include software systems, but the entire set of business processes and resources that are
used to pull together information from functional or tactical systems. The available data from the
system is used by the organization in various way to help the business in managing, executing,
delivering and maintaining all the activities involved in the business. The entire system is designed
to assist the organization take the right decision and actions to meet its strategic and tactical goals.
MIS combines information from multiple systems. These help management staffers better
understand their own departments’ contributions. Manager who’s aiming to improve has to establish
a broader perspective with the help of a great MIS.

The questions or actions should directly relate to tactical or strategic goals. This mean that
the MIS is integrated into the managerial functions. It sets clear objectives to ensure that the MIS
focuses on the major issues of the business. The manager has to establish a broader perspective with
the help of a great MIS. Therefore, an MIS can track the complete organization within the
organization and enable an easier method for analyzing independent processes. These processes
consist of organized work activities information and knowledge to produce valuable products or
services. By integrating an information system, a company is following the latest business trend. It’s
a great way to speed up the progress of the company. The company no longer spend a lot of time and
money on unnecessary activities rather put the focus on the main goal ahead.

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A. Firm Profile

a. Describe the nature of activities and services provided by the firm

Founded in 1962 by Sam Walton, Walmart has grown to be the largest retailer on the globe. Driven by
Mr. Walton’s 10 rules to build a business, Walmart promises to “save people money so they can live
better (Wal-Mart Stores, Inc., 2014)”. One of those rules is to “control your expenses better than your
competition (Wal-Mart Stores, Inc., 2014)”. Walmart is recognized as leader in incorporating cutting
edge information systems and processes that drive out costs and provide advantage over their
competitors. To maintain their spot at the top of the global retailers list, Walmart continually seeks to
improve the technology used to ensure they maintain competitive advantage, efficiently process data,
and ensure business continuity and security.

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B. Business Start-up

a. A brief relevant historical background on the company and how they began operations and major
key milestones of development and achievements.

Walton was known as "Mr. Sam" throughout his tenure at the helm of his empire. His
mission statement for the first Walmart in Rogers was "The lowest prices anytime, anywhere." The
concept worked because Walton and his family were the proud owners of 24 stores within just the
next five years, achieving $12.7 million in sales. Two years later, the company incorporated as "Wal-
Mart Stores, Inc." But Walton wasn't done yet. He wanted his stores in the national spotlight.
Walmart went public in 1970 with shares offered at $16.50. By 1972, Wal-Mart Stores, Inc. had 51
stores and sales of $78 million. This increased to 276 stores and $1 billion in annual sales by the
1980s. Walmart opened the first Sam's Club in Oklahoma in 1983, and the first Walmart Supercenter
opened in Missouri five years later. It was the #1 retailer in the country by 1990. Sam Walton died in
1992 at the age of 74. Walmart's headquarters are still located in Bentonville, Arkansas where he
started it all. Wal-Mart's currently advertised mission statement and its advertising slogan are the
same: "We save people money, so they can live better." In addition to this mission statement, the
company looks to its founder for the company's "purpose." When he received the Presidential Medal
of Freedom from President George H.W.

Policies, Principles, and Rules

Walmart has developed some unique policies, principles, rules, processes and procedures over the
years which form the store's corporate culture:

 Open Door Policy: Managers' doors are open to employees at all levels
 Sundown Rule: Answering employee, customer and supplier questions on the same day the
questions are received

 Grass Roots Process: Capturing suggestions and ideas from the sales floor and front lines

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 3 Basic Beliefs and Values: Respect for the individual, service to our customers, and striving
for excellence

 The 10-Foot Rule: Making eye contact, greeting and offering help to customers who come
within 10 feet

 Servant Leadership: Leaders are in service to their team

 The Wal-Mart Cheer: An actual structured chant that was created by founder Sam Walton
to lift morale every morning. He got the idea after visiting a Korean manufacturing facility in
1975.

Walmart pledged to sink $2.7 million into its workforce over a two-year period in 2015. The
initiative included training programs for employees and a minimum wage hike to $9 an hour. There
were also wrinkles to work out. Costs for air conditioning and heating the gigantic spaces were
higher than expected. Traffic congestion and limited parking proved a drawback. Customers also
complained that the grocery section was not as well-stocked or maintained as it needed to be to
compete against nearby grocery stores. Wal-Mart began addressing these problems by, for example,
redesigning the grocery section of the Arlington, Texas, store. In 1988 Wal-Mart also opened five
smaller "supercentres"--averaging around 150,000 square feet--featuring a large selection of
merchandise and offering better-stocked grocery sections, without the outside services such as
restaurants or video stores. These stores, dubbed Wal-Mart Supercentres, proved much more
successful than the Hypersmart format, which was eventually abandoned. Hundreds of Supercentres
were subsequently opened during the 1990s.

Wal-Mart received some criticism during this period for its buying practices. One analyst,
according to an article in the January 30, 1989, edition of Fortune, described the treatment sales
representatives received at Wal-Mart: "Once you are ushered into one of the spartan little buyer's
rooms, expect a steely eye across the table and be prepared to cut your price." Wal-Mart was known
not only for dictating the tone with its vendors, but often for only dealing directly with the vendor,
bypassing sales representatives. In 1987, 100,000 independent manufacturers’ representatives
initiated a public information campaign to fight Wal-Mart's effort to remove them from the selling

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process, claiming that their elimination jeopardized a manufacturer's right to choose how it sells its
products.

During this time, however, Wal-Mart's revenues kept going up, and the company moved into
new territory. Wal-Mart enjoyed a 12-year streak of 35 percent annual profit growth through 1987. In
1988 the company operated in 24 states--concentrated in the Midwest and South--1,182 stores, 90
wholesale clubs, and two hypersmart. David D. Glass, who was named president and CEO in 1988
but who had been with the company since 1976, was a key player in Wal-Mart's expansion. In a
move motivated by good business sense and public relations efforts, Wal-Mart sent an open letter to
U.S. manufacturers in March 1985 inviting them to take part in a "Buy-American" program. The
company offered to work with them in producing products that could compete against imports. "Our
American suppliers must commit to improving their facilities and machinery, remain financially
conservative and work to fill our requirements, and most importantly, strive to improve employee
productivity," Walton told Nation's Business in April 1988. Product conversions--arranging to buy
competitively priced U.S.-made goods in place of imports--were regularly highlighted at weekly
managers' meetings. William R. Fields, executive vice-president of merchandise and sales, estimated
that Wal-Mart cut imports by approximately 5 percent between 1985 and 1989. Nonetheless, analysts
estimated that Wal-Mart still purchased between 25 and 30 percent of its goods from overseas, about
twice the percentage of competitor Kmart Corporation.

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Major key milestones of its development and achievements.

 Wal-Mart reached number one in the Fortune 500. After years of competition with Exxon
Mobil Corp. (NYSE: XOM) and major American car companies, it took the lead spot in
2002.

 Wal-Mart’s global revenue crossed $400 billion in 2009, a lift from $380 billion the year
before. Net income hit almost $21 billion.

 Wal-Mart’s share price attained an all-time high of $90.97 on November 1, 2014, up from
$12.25 two decades earlier.

 Wal-Mart went public in 1970 and moved to the New York Stock Exchange in 1972.

 Founder Sam Walton opened first Wal-Mart store on July 6, 1962.

 Company incorporated with the Wal-Mart name in 1969.

 The New York Times ran a major story on bribe cover-up in Wal-Mart’s Mexico operations
on April 25, 2012, setting off vast investigations, both within the company and by the U.S.
government. Authors David Barstow and Alejandra Xanic von Bertrab won the Pulitzer Prize
for this article, based on their investigative journalism, on April 5, 2013.

 Founder Sam Walton died on April 6, 1992, after a struggle with cancer. He was only 74.

 Wal-Mart reached annual sales of $1 billion in 1980 and claimed that it had hit this milestone
faster than any company in history.

 Wal-Mart moves outside the United States for first time in 1991, when it began operations as
part of a joint venture in Mexico.

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C. Business Problem

a. Discuss a specific business problem, opportunity or challenge which required an IS solution.


Describe the antecedents to the problem including the social, managerial, organizational,
technological, legal or economic issues which increased the complexity of addressing the
problem or opportunity.

Competitive advantage is a driving force in Walmart’s business model. With 2.2 million
associates, 10,700 retail stores and 245 million customers served weekly in 27 countries, Walmart
requires an array of information systems functioning harmoniously to meet all of the requirements and
expectations of their employees, customers and communities (Walmart, 2013). Mr. Walton believed
that sharing profits with and motivating employees and partners were rules of building a business. Sam
Walton once said that “our people make a difference” referring to the associates that he viewed as
partners that should share in the profits of the company (Wal-Mart Stores, Inc., 2014). Walmart
associates process hundreds of millions transactions every week in their retail stores. However, the
retail store is only one component of Walmart’s vast supply chain and logistics network which are
largely responsible for their continued success. Driving costs out of these networks requires a steady
flow of information between multiple internal and external systems that can process data into relevant
business intelligence.

Competition is fierce in the retail industry and Walmart has built its company on the principle
of controlling costs in order to offer products at lower costs to customers. The Five Forces Model
developed by Michael Porter can be used to understand the retail industry’s competitive pressures in
terms of buyer power, supplier power, threat of substitute products or services, threat of new entrants,
and rivalry among existing competitors (Cummings & Haag, 2013). Buyer power within the retail
industry is very high due to many retailers providing the same or similar products. Walmart has used
their information systems to improve efficiency and drive out costs that allow them to offer the same

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products at lower prices in many cases, which sets them apart from other retailers and thus reduces
buyer power. However, other retailers such as Target are reducing or eliminating the price gap by
offering similar products at similar pricing as indicated by Supermarket News price check survey
earlier this year (Gallagher, 2014).

Maintaining competitive advantage in an industry with high buyer power requires diligence
since most methods are not permanent. With many retail and grocery store chains providing the same
or similar products as Walmart, supplier power is relatively low between Walmart and end customers.
Walmart increases their supplier power in this area by offering their products at much lower costs than
competitors. Additionally, Walmart controls the supplier power of vendors from whom they purchase
products by the sheer volume of products they sell. The threat of substitute products or services is an
increasing risk to Walmart and has placed the giant retailer behind the curve in the e-commerce
segment. In 2012, Amazon posted web sales of $61 billion, almost eight times the $7.7 billion in web
sales Walmart reported (Banjo, 2013). E-commerce has grown by leaps and bounds over the past
several years with online shopping topping traditional retail store shopping as the preferred method for
the first time in 2013 (Holliday, 2013). The threat of new entrants to enter the market is relatively low
for Walmart. Their footprint in the retail industry is so large that it would be difficult for a new entrant
to quickly take market share from them. Their greatest threat is with current competitors challenging
their low cost strategy, as Target is doing, or offering similar products by other means such as e-
commerce, as Amazon has so quickly excelled in doing. Rivalry among competitors is very high with
each grappling for a greater piece of the market. Information systems is key to maintaining the top spot
and overcoming the challenges presented by aggressive competitors.

Offering products to customers at the right time and right place is an essential aspect of
eCommerce. As Walmart seeks to compete with Amazon by growing their online sales, they are
increasing their Business to Consumer (B2C) business model. Walmart is integrating their online
shopping with the vast network of retail stores to provide more options to consumers. Using Omni-
channel Commerce they are offering distributions such as in-store pickup and store to home delivery
that Amazon can’t. Ecommerce models such as B2C makeup a significant portion of eCommerce, but
are evolving as traditional stores begin to obtain a foothold into this market.

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Retailers, including Walmart, using various emerging trends to remain competitive such as
radio frequency identification or RFID. RFID is an innovative technology that reads tags on individual
pieces of merchandise, cases or pallets and is used to inventory products very quickly using a RFID
reader. This eliminates the need for associates to conduct physical inventory counts in order determine
restocking needs. Walmart has made significant improvements to their supply chain by requiring many
of their vendors to incorporate RFID technology into their distribution system and on the tags for their
individual products. This technology has enabled Walmart to ensure items are in stock when
consumers are in the store to purchase them and to improve efficiency of their entire supply chain
system.

Artificial intelligence is used in agent-based technology, which are essential to robust


information systems. Agent based technology are used to perform tasks on your behalf that they are
assigned to do and are called software agents (Cummings & Haag, 2013). Walmart’s systems would
require all five types of software agents including autonomous agent, distributed agent, mobile agent,
intelligent agent, and multi-agents systems to perform all of the necessary tasks and analysis
efficiently. The two types of software agents that include artificial intelligence are intelligent agents
and multi-agent systems. Intelligent agents that are necessary for Walmart are information agents such
as buyer agents that search the website for the buyer to find products or services they need.
Additionally intelligent agents designed for monitoring and surveillance of networks or equipment that
can report based on its observations. Multi-agent systems are a group of intelligent agents that must
work independently, but also together to complete their task (Cummings & Haag, 2013).

This type of system would be used in Walmart’s transportation and distribution to ensure
maximum efficiency on the products loaded on each truck and the routes that trucks take to their
destination. Additionally, these systems are used in eCommerce to track and learn consumer behaviors
and improve the customer experience by tailoring the website and communication specifically to the
consumer.

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The systems development life cycle (SDLC) would be critical for any systems that would be
introduced in to Walmart’s network. The complexity of the current systems that Walmart uses would
require significant work during the planning and analysis stages of any new systems desired. During
these stages the team will define the system to be developed, set the scope of the project, develop the
project plan and gather business requirements for the system. A supplier management system is one
type of system that Walmart may have added after their initial network was created. This type of
system could include integration directly with suppliers so they can input services or products provided
along with compliance related requirements that Walmart would require as a part of their sourcing
process. The design and development phases is where the technical framework required to support the
system and system models are designed and then built. Testing and implementation would be critical to
ensure that the system works as intended and does not interfere with other operating networks. The
maintenance stage would be necessary to provide ongoing support to users and to make modifications
and upgrades to the system (Cummings & Haag, 2013). Engaging in the complete SDLC will improve
the process at all stages and ensure that the desired result is obtained.

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D. Technology-based solution
a. Discuss the IS solution introduced to address the business challenge, problem or opportunity.
What process led to the choice of this solution and what other options were considered?

Walmart is very diversified with operations across the globe. The benefit of diversification is
that it would be unlikely for any single event to significantly impact the company’s ability to continue
in other areas. However, to Walmart’s Director of Emergency Management it means that threats and
events are going to happen every single day. The Emergency Operation Center prepares for and
responds to these events to ensure operations continue. It is surprising to learn that as of 2006, Walmart
did not have an information system to monitor and track business continuity efforts. However, that has
not prevented Walmart from obtaining the best sources of information and employing emergency
response teams at appropriate times. When Hurricane Katrina hit Florida, fifteen Walmart stores were
closed, but fourteen were reopened within 24 hours. When Katrina turned toward Louisiana and
Mississippi 173 Walmart stores were affected with more than 100 damaged. Because of planning,
threat and impact analysis, design, implementation, testing and maintenance of their business
continuity plan, 66% were continuing operations within 48 hours (Rojas, 2006). The globe’s largest
retailer must be prepared for all types of business disruptions from terrorist attacks, natural disasters,
fires and countless other types of events.

During the World Economic Forum Annual Meeting in 2014, Doug McMillon, President &
CEO of Wal-Mart Stores, Inc., stated in a discussion titled Disruptive Innovation Ahead! That “trust is
the ultimate asset and if you lose it all your business is at stake” (McMillon, Jacobs, Schatz, & Levy,
2014). Walmart’s information systems hold millions of credits card and other financial data, personal
health information from pharmacies and clinics, along with countless amounts of proprietary and
confidential data. Security is an essential component of Walmart’s information systems. Security
measures to prevent unauthorized access to Walmart information systems must be very comprehensive
and would include access authentication and encryption. In recent months, multiple retailers including
Target, Neiman Marcus and Walgreens have been targeted by hackers to obtain consumer credit card
information costing millions in unauthorized charges and reputational harm for the retailers involved.
All retailers, including Walmart, must assess the security systems to ensure they can withstand these

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types of attaches. Additionally, Walmart maintains a detailed privacy and security policy addressing
what information is collected, how it is used and how it is protected.

Walmart’s information systems include progressive supply chain management systems,


enterprise resource planning systems and customer management systems. How does a company ensure
they are procuring products at the best price, maintain appropriate inventory levels, distribute products
throughout the network as efficiently as possible and integrate every area of their business? At Walmart
the answer is technology. Walmart defines their Information Systems Division as the “nerve center of
what makes Walmart work on a day to day basis (Walmart, 2013)”. Operating the largest private
distribution network in the world requires a massive amount of data that can be used to ensure that
every step of the process including projecting what consumers will buy, sourcing and purchasing
products, distributing products to appropriate distribution centers and stores, managing the customer
experience online and in retail stores, and handling returns and overstocks in performed at the highest
level of efficiency and can be monitored by all necessary internal and external contributors. The supply
chain management system must be robust with advanced intelligence to ensure the right products are
available to customers in the right place and at the right time.

With hundreds of millions of transactions each week, millions of employees and shareholders,
thousands of suppliers and billions of dollars in physical assets, Walmart processes an enormous
amount of data every single day. In 2004, eWeek published that Walmart maintained the largest
database in the world with more than one-half a petabyte of data in their data warehouse (Schuman,
2004). Walmart’s net sales have nearly doubled since then. The data warehouse must have a dynamic
engine that convert data into logical tools and intelligence. Artificial intelligence is significant tool
driven by the data warehouse engine that enables Walmart to continue to lead in the retail industry and
investments in this area are enabling them to gain further footing in ecommerce.

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F. Lesson for Manager

a. Discuss three key lessons which managers in organization can learn from this case.

1. Clearly define the problem

Many assignments start on the wrong foot by failing to clearly define the problem at hands. This can
happen for a number of reasons, but in our experience, it is usually due to miscommunication
somewhere along the chain of command: from management to business unit, from client to supplier,
from team leader to team members. Avoiding this issue is therefore relatively straightforward: ask as
many questions and hold as many meetings as necessary to make sure everybody is at the same page.
While common sense is arguably the best tool for clearly defining a problem, there are some
frameworks you can use. The Minto Pyramid Principle, for instance, is a structuring and
communication technique that breaks down an issue in three parts :the situation (what we want to
do), the complication (what the obstacle is preventing us from doing it), and the question (what we
need to do to remove that obstacle).

2. Take time to plan an approach

There is a tendency to jump directly into problem solving without first planning an approach,
particularly when time pressed. However, it is exactly when time is of the essence that you should
stop to think about the best way to address the issue at hands. This will save invaluable time and
effort later on.

A good approach to problem solving will often follow the general rules of sound project
management: break down the issue into smaller tasks, assign tasks to team members, define
dependencies, milestones and deliverables.

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If you are dealing with large teams, or need to explain your approach to other people, it might be
worthwhile to represent it visually, as this makes it easier to understand and remember.

3. Combine different information sources and techniques

Combining different information sources and techniques can greatly improve the outcome of
problem solving, as it will help to identify flaws in logic, unrealistic assumptions, inaccurate data
and bias. This is particularly true for complex issues, such as forecasting (a topic we discuss here) or
consensus-based decisions (which we address here).

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Conclusion

Maintaining status as the leading global retailer requires sophisticated, dynamic information
systems that are fully integrated and produce business intelligence at each step in the process.
Historically, Walmart has been a supply chain expert and has built its expansive network by improving
efficiency at all levels. However, they have found themselves lagging in terms of ecommerce and
consider that a priority in coming years. Walmart has built and will continue to expand by creating and
maintain competitive advantage, utilizing sophisticated information systems, minimizing business
disruptions and fulfilling their promise to maintain data security.

Reference

 Banjo, S. (2013, June 19). Wal-Mart's E-Stumble With Amazon. Retrieved from The Wall
Street Journal:
http://online.wsj.com/news/articles/SB10001424127887323566804578553301017702818

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 Cummings, M., & Haag, S. (2013). Management Information Systems. New York, NY:
McGraw-Hill.

 Gallagher, J. (2014, February 4). Walmart, Target neck and neck in SN Price Check. Retrieved
from Supermarket News: http://supermarketnews.com/retailers/walmart-target-neck-and-neck-
sn-price-check

 Holliday, K. (2013, November 13). New top choice for shoppers: Online overtakes brick-and-
mortar. Retrieved from CNBC: http://www.cnbc.com/id/101205503

 McMillon, D., Jacobs, P., Schatz, P., & Levy, M. (2014, January 1). Diruptive Innovation
Ahead! World Economic Forum Annual Meeting 2014. (S. Ruhle, Interviewer)

 Rojas, B. (2006, February 28). Walmart: Beyond Business Continuity Basics. Retrieved from
Continuity Insights: http://www.continuityinsights.com/articles/2006/02/walmart-beyond-
business-continuity-basics

 Schuman, E. (2004, 10 13). At Wal-Mart, Worlds Largest Retail Data Warehouse Gets Even
Larger. Retrieved from eWeek: http://www.eweek.com/c/a/Enterprise-Applications/At-
WalMart-Worlds-Largest-Retail-Data-Warehouse-Gets-Even-Larger/

 Walmart. (2013). Information Systems Division. Retrieved from Walmart:


http://jobs.walmart.com/articles/isd

 Walmart. (2013). Walmart 2013 Annual Report. Retrieved from Walmart:


http://stock.walmart.com/microsites/annual-report-2013/pdf/Walmart_2013_AR.pdf

 Wal-Mart Stores, Inc. (2014). 10 Rules for Building a Business. Retrieved from Walmart:
http://corporate.walmart.com/our-story/history/10-rules-for-building-a-business

 Wal-Mart Stores, Inc. (2014). Sam Walton. Retrieved from Walmart:


http://corporate.walmart.com/our-story/history/sam-walton

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