Read the case study, Write two paragraphs •First paragraph: Which one Wal-Mart o

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Read the case study, Write two paragraphs •First paragraph: Which one Wal-Mart or K-Mart been successful in integrating in the market? 78 PARTI Leadership Issues in the Digital Economy The McKinsey study also found that all IT investments were not alike. IT invest ments in industries that depended on information processing (such as large retailers that handled millions of transactions a day) and that faced growing competition had the greatest productivity increases-but only under three conditions: 1. The IT investments targeted the main levers of productivity 2. The IT investments were made in the right sequence and at the right time, and 3. The IT investments were complemented with innovations in management practices Targeting IT investments. Firms that concentrated their IT spending on "levers that matter" gained the greatest productivity. Because productivity equals outputs divided by inputs, a lever either increases outputs (such as offering new higher-value services) or decreases inputs (such as reducing inventory or working capital). But the "levers that matter" differ among industries For example, the applications that mattered most for the big-box retailers, such as Wal-Mart, K-Mart, and Target in the United States, that sell high volumes and have low margins were warehousing and transportation systems that more tightly linked them to their suppliers and increased the retailers' inventory turns On the other hand, for spe- cialty retailers whose items have short shelf lives, the applications that mattered the most dealt with assortment and allocation planning systems that reduced their inventory-holding costs and the amount of out-of-style merchandise in their stores Smart companies invest heavily in IT applications that increase productivity and seek the least expensive option for all their other IT systems Sequencing and timing IT investments. Companies that reaped the highest produc- tivity generally sequenced their IT investments so that new ones built on existing ones Wal-Mart and K-Mart present contrasting examples, notes Farrell CASE EXAMPLE WAL-MART VERSUS K-MART www.walmart.com; http:l/kmart.comm From E-business to Services associates worldwide and nearly 6,500 The sequence of IT investments at Wal stores and wholesale clubs across 14 coun- Mart and K-Mart offer one example of the tries Wal-Mart's success has been its effect of getting the sequence right, notes relentless pursuit of the "Every Day Low Diana Farrell of McKinsey Global Price (EDLP)" strategy The digitization at Institute.15 From a 1945 small variety store Wal-Mart made this strategy possible. in Newport, Arkansas, Sam Walton has led Walt-Mart invented the practice of sharing Wal-Mart to become a global discount sales data via computer with major suppli- retailing store with more than 1.9 million ers,such as Proctor & Gamble. One of the

Explanation / Answer

Walmart have been successful in integrating in the market. One of the main reasons is that they provide big discounts, and provide value to the customers. They make a deliberate choice about their way to play in the market. They focus not only on customers but also other techniques such as good IT systems, Better advertising techniques, Providing products at special offers which help them to create differntiated value and helps them in integrating in the economy.

II. How they can be a leader in the market.

As written in the above case that Kmart fails to impress their customers because of non availability of products. Thus they can follow some steps related to their competitiors and be a leader in the market.

1. Providing Customer Valuable Product.

2. If something has been promised ,make sure the product is available

3. Giving timely discounts

4. Proper use of technology is required., Make contacts with the wholesalers, and make a data of the regular customers and provide the customer loyalty points, which will attract them again to buy the product.

thus proper measures should be taken which will increase their value in the market

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