What Are Linkages That Exist Between the Principal Functions and Activities in the Value Chain of Wal-Mart and What Is Their Significance?

What are linkages that exist between the principal functions and activities in the value chain of Walmart and what is their significance?

Linkages exist as interdependent connections between different value chain activities. Their effect on the mechanics of the company depends on their relative strength and the area of the parallel in which they are formed.

So linkages can either enhance the performance of the business in areas such as cost-cutting, which proves to be key for Wal-Mart, or they can sometimes lose their strength and have negative effects, which seep through to other areas of the value chain, sequentially leaving the company less better off than before.

In the value chain, IT exists as the central linkage that is formed amongst all the activities. The efficient and productive use of technology to gather information from the data allows Wal-Mart to ultimately reduce costs and have a competitive advantage in many more aspects than its’ main competitors.

PVR

So firstly the use of Information Technology complements the purchasing vendor relationships within Wal-Mart. Wal-Mart has a reputation for being a no nonsense negotiator, which allows for efficient purchasing. Information is shared electronically through an EDI, which improves their partnership with the suppliers, therefore forming an efficient communication network between the two. Additionally inventory systems are vendor-managed, which minimizes the inventory cost. All in all, this substantially lowers costs for Wal-Mart, and also makes it more desirable to work with them.

MARKETING

Secondly, IT allows for a more successful marketing technique. So although Wal-Mart dedicates very little of its resources towards marketing, data mining allows them to market products based on customer preferences and satisfaction.

MANAGEMENT STYLE AND HRM

Thirdly, an efficient communication network is also at the heart of Wal-Mart, not only in terms of supplier relationships but also in...