Continuous Innovation

19 Nov

In my previous blog I wrote of the importance of continuous innovation. I will now give examples of it, and how it is helping a leader in its market place, Wal-Mart.

Wal-Mart is an example of a firm who is and has been market leader for a number of years. They have done this through a number of innovations. In the 1990’s, they pioneered data mining, gathering point of sale transactions from thousands of stores in several countries. This information could be used tom identify buying patterns and aid their suppliers. The suppliers were allowed access to information on Wal-Mart’s products, this allowed them to manage inventory and allow for new merchandising opportunities.

http://www.anderson.ucla.edu/faculty/jason.frand/teacher/technologies/palace/datamining.htm

In 2004 they mandated their top 100 suppliers to have RFID tags on all pallets. This saved the firm an estimated 8.4 billion a year, due to a more efficient supply chain and reduced labour costs. Wal-Mart introduced this before their competitors, and allows them to pursue their strategy of providing low cost goods to their customers.

http://www.inboundlogistics.com/cms/article/it-doesnt-matter-better-run-that-by-wal-mart/

Wal-Mart is currently experimenting with a mobile checkout system to almost eliminate queuing time in stores.  The plan is to allow customers to scan items with their mobile phone, and then pay for goods at the self service kiosks.  This innovation is only being tested as of September 2012.

http://www.newser.com/story/153269/walmart-experiments-with-mobile-checkout-system.html

In the same month, Wal-Mart launched a new search engine tool for their search engine on their website. This is designed to give more accurate results. This has resulted in an immediate 10-15% increase in shoppers completing a purchase after going online. The search engine, known as Polaris, uses “semantic search technology”, which is used to improve search accuracy by understanding the searcher.

Wal-Mart even has its own research and technology hub for innovation, Wal-Mart labs, and they built the Polaris technology from scratch.

http://crm.enterpriseinnovation.net/content/walmart-introduces-search-technology-increase-shopper-conversion-rate?src=popular

From these examples, you can tell that Wal-Mart is committed to innovating every area of its business practices. These innovations focus on reducing costs and prices, and building on their customer relationships, two of the core strategies of the firm. They will continue to innovate to maintain its competitive advantage, as shown by its recent innovations, and will, therefore achieve sustained competitive advantage.

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