Wal-Mart

toc =__Wal-mart- A case study__=

__**What is e-commerce?**__
Business which takes place between companies using services such as the Internet, [|Electronic data Interchange] or Electronic File transfer, basically there are two companies, one the supplier & the other the customer can transmit inquiries, orders, invoices, payments etc. directly through their computer systems.

__**A quick look at Wal-Mart.**__
[|Wal-mart] is a [|public corporation] based mainly in the US and it uses e-commerce for its business. This one of the world's largest retailer established by [|Sam Walton] in 1962. Wal-mart got listed in the [|New York stock exchange] in 1972. For the [|fiscal] year ending January 2006, Wal-Mart reported net income of $11.2 billion on $316 billion of sales revenue. This is about 3.5% [|profit margin.] As of February 8 2007, the revenue was $36.3 billion higher than the previous years results. Wal-Mart is also the largest retailer of grocery all over the [|US], with an estimated of 20% retail grocery and consumables business and the largest toy seller with an 45% of the retail toy business.



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For creating an online business the first basic thing that is required is a good website that actually acts like an online shop or a virtual form of the shop you have in real. The website would have a display of all the prodcuts you wish to sell over the webstie. There are certain criterias that must be met if one wishes to start an online business. To sell products over the internet the merchant has to provide some way to accept payments, this is often called a [|merchant account]. A shopper must also have the facility of what is commonly known as '[|shopping cart]' software which is a way for shoppers to enter and keep up with their orders. Secure [|servers] are also essential if credit card payments are accepted or other personal payment information online is accepted. Care must also be taken of the fact that the business abides by the [|Data Protection Act]. A software (or other process) is also vital to keep track of inventory and orders. These are some of the very basics that are needed to setup an online business. Incase of [|Walmart] which is the topic concerned here is very much essential since [|Walmart] itself is a large business organisation which has a large variety of products to sell over the Internet.
 * a database of product names, descriptions, pricing, and photos
 * a system for establishing product numbers
 * a system for inventory management
 * technical know-how in incorporating the database into the Web site

__**Merchant account.**__
A [|Merchant Account] allows you to accept and process credit card payments either manually by "swiping" or "keying in" a card number, or through your Web site. The business must provide some facilities so that most of the payment can be done by using a credit card. Although it is a different case if the business wishes not to use online payment, but the facilities that needs to be provided must be looked into this is because the payment in [|Walmart] can be done using credit card. The following charges must be provided for credit card payment: These are some of the charges associated with accepting credit card.
 * A discount of about 1-4 percent based on the sale amount (although online rates can be much higher)
 * A transaction charge - a $0.20 to $0.40 charge per transaction
 * A monthly fee charged regardless of the amount of charges in a month. This is often known as the '[|statement fee.]'



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__**Electronic payment.**__
There are many methods of [| transaction] that occur online but business like [|Amazon] and [|Walmart] use a method of payment called one-time customer to vendor payment. In this process the shoppers can click on the [|shopping cart] icon, type in their respective credit card information and click on the checkout button. The site processes the credit card information and sends the customer an e-mail notifiying the cutomer that the payment was received. On some Web sites, the visitors can use an [|e-check] instead of a credit card. If a product is not able to be shipped within 30 days of the order the customer must be notified about the delay. Most people don't like to be charged for something they haven't received yet and automated card processing on the web site will do just that. The card is processed and funds are transferred within hours or a few days rather than when the order ships. This a disadvantge of on-line payment using credit cards.

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[|Electronic payment] lowers the costs for [|Walmart]. The more payments they can process electronically, the less they spend on paper and postage. Besides they are also gaining customer satisfaction by providing a much better service for their customers since a lot of work for the customer is reduced.In most cases, the customer only need to enter their account information -- such as their credit card number and shipping address -- once. The information is then stored in a [|database] on the retailer's [|Web server]. When the customer comes back to the website they could just log in by typing in their username and [|password]. This surely reduces a lot of their work especially if the customer has a very packed schedule. A customer is more likely to return to the same [|e-commerce] site where his or her information has already been entered and stored. This way [|Walmart] would have a list of some regular customers which would help them boost their business and this has only been possible beacuse of the site they have on-line and more specifically [|e-commerce].

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In order to better serve their customers, banks are swiftly moving to offer online bill pay services. [|Grant Thornton's 2005] survey of bank executives found that 65 percent of community banks and 94 percent of large banks offer 24/7 online bill payment. Most of this service is free to members and are easily compstible with personal software programs such as [|Quicken] or [|MS Money].

Walmart uses the following method of payment:
 * [|Walmart Credit Card]
 * [|Walmart Gift Cards] and Online Gift Card with a [|PIN]
 * Credit cards: [|Visa], [|MasterCard], [|American Express], [|Discover] and [|Walmart Discover]
 * [|Debit cards] (also called check cards, ATM cards or banking cards) with a Visa or MasterCard logo on the front



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__**Social issues.**__
In the battle for customers e-commerce means some business will loose out while others would gain huge profits by simply setting up a website which acts like their shop. The smaller companies which loose out and the economically stronger companies such as Walmart are the stakeholders of this particular IT developement. The customers who shop on-line are also the stakeholders since they are also invloved with this IT developement.


 * Some disadvantages for the stakeholders are given below:**
 * Some traditional shops which are economically weaker will have to close down eventually as they would suffer serious losses and this would result in a loss of job for many of the companies emploies
 * Since the local shops would close down, shopping as a leisure activity will decline as goods can now be bought on-line. Not only that, the personal relation that could have been developed between a shopper and a seller would no longer be there and result in large number of unsocial people. Society in general would loose since more people would now tend to interact with computers rather than people.
 * The gap between richer and poorer members of the society would widen as the richer take the advatage of savings made by shopping on-line and also because the richer members have easy access to [|credit cards]. For example if a person is willing to buy a [|Sony] digital camera from [|Walmart] he could save about $80 since the list price of the camera would be decrased if it was bought on-line. A [|Panasonic] 6 Mega pixel digital camera had a price reduction of $69 i.e. it was brought down from $349 to $280 when it was sold on-line.

Despite such disadvantages e-commerce is still promoted. This is becuase the advantages are more compared to the disadvantages.


 * The disadvantages to the stakeholders are:**
 * E-commerce have made some people very rich as they become 'dot com' millionaries. It is not hard to imagine how much Walmart earns and how quickly it has flourished after it has started doing business on-line
 * Since the goods are delivered straight to the customer's home there is a huge increase in the number of staff employed by the delivery/postal companies such as [|FedEx] and [|DHL]
 * The [|programmers] and web site developers are also benefitted since they will be in great demand.


 * Some advantages for the customers are:**
 * On-line catalogue can be viewed. Products can be searched for a large number of criteria. For example a customer search for a book according to the author's name or even the [|ISBN] or even the subject.
 * People with mobility problem such as disabled or handicapped people will be able to shop more successfully from their homes.
 * There is a much bigger and various range of choices for the customers. For example Internet book shops have a huge range books compared to local shops and moreover the method of searching is even easier and less time consuming. Have a look at [|Walmart's book store]. This is only possible because the websites are updated daily and also because of [|RSS] feeds. Consider creating an RSS feed to provide company news to the visitors. Rather than having to regularly visit the website to find out new information about the company, subscribers to the RSS feed will automatically receive the corporate news and information about latest releases as they are released.
 * Product announcements can be made utilising RSS feeds to generate more business. By providing an RSS feed that is updated when new products are available, when products have been reviewed or when products go on sale the customers can be automatically notified, which in turn can drive an increase for the business.
 * Orders can be placed on the Internet at any time of the day. This is something helpful for people who have odd working hours.
 * Once the customers have places their order and has also entered customer details such as name, adress and [|credit card] details they are stored in a database on the retailer's [|web server] and does not need re-entering. This makes shopping on-line very fast.
 * Goods can be brought from any part of the world just the Internet connection is needed.

Although there are disadvantages, they are outnumbered by the advantages and this is one reason [|e-commerce] is promoted largely and is now a growing economic sector. Moreover the problems stated above can be solved. For example the hacking of credit card details can be prevented by the use of [|SSL]. SSL would automatically encrypt personal information such as credit card details before sending it over the Internet.
 * Despite these advantages there are a few disadvantages which are as below:**
 * Shopping as a leisure activity may go into decline as all the goods can now be brought on-line.
 * The personal relationship between the buyer and the seller is lost.
 * The fact that would affect the most is stealing credit card details if the hackers can access them. [|Hackers] can more easily take advantages of anyone off their guard when divulging credit card details.
 * Most people don't like to be charged for something they haven't received yet and automated card processing on the web site will do just that. The card is processed and funds are transferred within hours or a few days rather than when the order ships. This a disadvantge of on-line payment using credit cards.

__**Ethical Issues.**__
The main ethical issue to do with e-commerce is privacy. Since [|Walmart] would obtain personal and senstive information such as credit card number, bank account number, telephone number, street adress and many others, privacy is thus a big issue that [|Walmart] must consider in order to keep up its reputation. Infact Walmart is very much concerned about its customer privacy and has many policies. For instance a very interesting feature of [|Walmart] is that it provides [|SSL], a technology called Secure Sockets Layer. Almost all browsers are capable of SSL and the best thing about SSL is that it would automatically [|encrypt] or [|encode] personal information before sending it via the Internet. Another way of keeping customer information private is through the use of [|password]. Each customer has their very own password which is only known to them and only they can use it to open their accounts while shopping. The confidentiality of their password is their job to protect. Another issue is the fact that many small business enterprise will have to shut their business and their shops. This is mainly because everyone is now switching to on-line shopping. The lure of better and faster facilities, investment reduction and many others is a drivng force driving people to move to [|e-commerce]. Thus many small business enterprises, who are unable to afford the cost of setting up of an e-commerce site will loose out greatly. Not only because of the cost, the smaller business enterprise will also loose many of their regular customers as their customers would now prefer shopping on-line since they do not have to walk down to the shop.

__**Problems with E-commerce and solutions to the problem.**__
The main problem identified so far is that would people become very unsocial. Since the companies are now selling out all their products on-line, shopping as leisure activity would slowly perish. Besides that the personal relation that once existed between the customer and the sales man would no longer be there. Another problem that would come into existence is unemployment. Many sales man would loose their jobs as a [|website] would now replace their jobs. This is a serious problem that must be looked into.

The best way to solve the problem is not to sell all the products on-line. The companies can actually hold back some of its products by restricting their sale on-line. This way both the shop and the website would stay into existence and nobody is unhappy. It is would also be wise to train the staff and get them used to computers. This would resolve the problem to unemployment as the staff can now cope up with the recent changes and developements. Even if they loose thier job from company X for example, they could work for Company B and be employed since they now have computer skills which is greatly needed in the near future.

__**External links:**__
 * [|www.google.com]
 * [|www.howstuffworks.com]
 * [|www.walmart.com]
 * [|www.en.wikiepedia.org]

Done By: Sabbab