Walmart - Challenges and Security Issues

Challenges & Security Issues

Rosemarie Lovell

American Intercontinental

Abstract

This paper will discuss how the retail industry uses information technology for both Walmart and Target retailers. It will talk about how this is used to manage internal operation and make informed decisions, how they keep a competitive advantage, and what they do to deter cyber-crimes, both internally and externally.

Challenges & Security Issues

This paper will take a look at the different aspects of management information systems and will compare and contrast Target and Wal-Mart retail stores and how they use information systems in their organizations to manage internal operations and make management decisions. It will also look at how they use information technology for a competitive advantage, plus it will discuss the cyber weaknesses that they might be subjected to.

Wal-Mart retail organization is number one globally in the retail industry, and Target is right behind them in the retail business sector. Both of these companies are great competitors in the retail business and each use management information systems that work for each of their retail operations, although they may be used in a similar manner they also have differences in the types of information technology systems and whether they are outsourced or managed by the company itself, such as Wal-Mart who has their own IT department, whereas Target outsources the use and maintenance of their IT systems. Both companies compete with each other by having their own brand and unique logo’s, but they also compete through prices, differentiation of product lines, faster ways of serving customers, and giving the customer a better customer experience. Wal-Mart does this by upgrading their technology frequently to stay ahead of the changes in technology; just recently they have launched the newest way for customers to check out on the point-of-sale area by creating its own mobile payment system which allows shoppers to pay with credit, debit, and its own gift card through an mobile app at the cash register. (The Gaurdian, 2015). Compared to Targets faster check-out point-of-sale at the register, which allows customers to swipe their card while being rung up, and the use of mobile coupons and gift cards, all the customer needs is a cell phone which scans the barcode at the register. (Target Pressroom, 2010). Both retailers have also installed the new chip-in-pin technology to make price purchasing more secure for its customers and make it easier for a security breach to be detected.

Another information technology system that both Walmart and Target are using is RFID price tags, which is coming out just recently, with this system it will keep the shelves stocked because the items will have a RFID chip in them which customers can scan a tag on any item and add it to a digital shopping list and then check-out digitally, and as the item is purchased it will be sent to a supplier information system to be restocked.  Compared to Target, Walmart was way ahead in this sector even before using RFID tags and, it already had a system that worked well for their business strategy, which was called Vendor Managed Inventory (VMI); with this system Walmart worked directly with manufacturers and the manufacturers became responsible for managing their products for Walmart, so warehouses were always stocked. Recently Walmart started using what is called smart tags, which are read by a handheld scanner and it allows employees to know what needs stocked on the shelves as they become empty. Additionally Walmart entered into a relationship with P&G to maintain its inventory in its stores by using an automated re-ordering system, which links this system with P&G’s factory through a satellite communication system, which allowed P&G to deliver items directly to the Walmart store or their warehouse as needed. (Lu, 2014).