Ecosystem

Ecosystem

Your company, a large online high school, is planning to implement a new innovative social networking
technology for their students. The technology would allow students to get to know one another, network,
and participate in school activities, such as having virtual student body elections and virtual student
committees. The company feels that the ability to have this type of interaction and involvement among
students will set the school above the competition.

As the Chief Innovation Officer, you are responsible for the implementation and evaluation of the
chosen technology. The company must decide between developing their own social networking system or
acquiring a small online high school that has already started development on a similar type of system
and is struggling financially. Your director, the company CEO, has come to you with some specific
concerns and questions regarding which technology to select.

Submit a one-page response to your director answering all of the following questions:

1. What factors must be considered when implementing an innovative technology internally? What
factors must be considered when implementing an externally acquired innovative techology? How do the
implementaion issues differ? How are they the same?

2. What factors must be considered when evaluating an internally implemented innovative technology?
Why?
3. What factors must be be considered when acquiring an innovative technology externally? Why?

and
Wal-Mart Stores, Inc. is a leading company in its industry and a widely recognized name, both
domestically and internationally. Additionally, Wal-Mart has taken steps to ensure the success of not
only its company but also their business ecosystem.

Wal-Mart Stores, established in 1969, is the largest retail company in the world, with over 4,000
stores in 12 countries. Wal-Mart has three types of retail stores: discount stores, supercenters, and
neighborhood markets, as well as Sam’s Club warehouse stores. Between the various types of Wal-Mart and
Sam’s Club stores, Wal-Mart Stores, Inc. offers merchandise and services that range for grocery goods
and household supplies to tire and lube service, clothing, and vision centers. Additionally, Wal-Mart
has an online music store, a private label cosmetics brand, and pre-paid debit cards for low-income US
customers. Some of the company’s private-label brands are Sam’s Choice, Equate, No Boundaries,
Mainstays, and Parent’s Choice. Wal-Mart also stocks several licensed brands, including General
Electric, Disney, McDonalds, and Mary-Kate and Ashley. For the fiscal year ending in January 2008, Wal
-Mart reported over $375 billion in revenue (Wal-Mart Stores, Inc. Company Profile, 2008).

Wal-Mart has dominated its market, in part, due to the way it approached its business ecosystem
(Iansiti & Levien, 2004). There are many examples of Wal-Mart’s ecosystem approach, including their
procurement system and their recent focus on more specialized stores.

Keeping its ecosystem in mind, Wal-Mart has built a procurement system that not only enhances its
performance, but the performance and operation of businesses within its ecosystem. Wal-Mart Stores,
Inc. requires that all of its suppliers operate the RetailLink® system (Requirements, 2008).
RetailLink® is a one-of-a-kind system that allows suppliers to receive real-time data regarding their
product in individual stores. Such real-time data allows suppliers to effectively plan for and execute
distribution, while also personalizing their product supply by store. According to Iansiti & Levien
(2004), “Wal-Mart’s procurement system offers it’s suppliers invalueable real-time information on
customer demand and preferences, while providing the retailer with a significant cost advantage over
its competitiors” (p. 69).

Stankevich (2002) noted the success of Wal-Mart’s system in terms of micromarketing and efficiency. Jon
Ragsdale, vice president of marketing at Dickies, discussed with Stankevich the way RetailLink® brought
to light the differences in demand for different sizes and colors of products in different markets.
Ragsdale noted, “Before RetailLink®, we were using pretty much a cookie cutter approach to stores”
(para. 10).

In recent years, Wal-Mart has begun to take a more specialized approach by offering different goods and
adjusting the layout of the stores based on location demographics. Once a one shop fits all store, Wal
-Mart now has several stores that cater to the needs of a specific location. One store in Plano, TX has
been adapted to appeal to the higher number of affluent customers in that area. The store now offers
consumer-electronic specialists, that are more versed in the specifics of electronics than a typical
sales associate. Also, that particular store adapted the sporting goods section to have more of a child
focus, based on the notion that more affluent individuals purchase their sporting goods from country
clubs (Zimmerman, 2006).

In terms of competition, Wal-Mart plays an interesting role. While the most obvious conclusion is that
Wal-Mart is the biggest competition for small businesses and retailers, it is apparent that their
approach to a business ecosystem is also positive for small business owners. “For small manufacturers
and small consumer-goods companies, Wal-Mart is the customer they pray for and the one that can propel
their company into big-time sales. Wal-Mart is the ‘elephant’ they dream of bagging” (Campbell, 2005,
para. 5).
Questions

After reading the case study on Wal-Mart, use the case study and information from your weekly readings
to answer the following questions in 200 to 300 words each.

1. What is a business ecosystem? Do all businesses function within an ecosystem? Why or why not?
2. What potential role does the ecosystem play in Wal-Mart’s innovation efforts? Provide examples.
3. In terms of innovation and creativity, what are the advantages and disadvantages of functioning
within an ecosystem?