[Business]
A business ecosystem can be determined as an economic community where distributors, entities, suppliers and clients collaborate with each other. Business enterprises interact so that to upgrade their strength, support its stability and stimulate the manufacturing of goods and services. Wal-Mart’s ecosystem can be represented as a brilliant case of the business ecosystem. This system is very flexible, as vendors are informed about commodities which are constantly sold and those products which stuck on selling. This allows businesses to choose the correct strategy of manufacturing and allocating goods which will be lucrative for entrepreneurs. This is the way how the system should work.
Nevertheless, not all entities operate within an ecosystem. In case of Wal-Mart, the management relies on vendors for whom it is a must to know the performance of each type of product. Commodities should be divided into low and high-demanded those to know what are the needs of clients and define the level of supply and demand. However, for small businesses which just launched their production, it will be difficult to go with the same way. The kind of activity which Wal-Mart performs requires much capital to invest. Hereby, at first small business is mainly focused on selling specific products or particular services. After obtaining a foothold, they should to enter a business ecosystem like Wal-Mart’s. This will give a chance to become a well-known company and do business profitably.
In Wal-Mart’s innovation efforts, the ecosystem plays a significant role:
It clearly shows the vendors the progress and sales of goods on particularized realms found on real-time information.
The ecosystem supplies the vendors with data about which commodities exactly receive the highest sales and which one the lowest. Thereby, a business can stick to the issue, whereas there is a chance to save funds on transportation and production. Moreover, the problems due to delivering not needed goods to stores as well wasted manufacturing efforts can easily be avoided.
Since commodities are already defined and classified into those which are to be sold and those which are not, this will give an advantage for Wal-Mart to ship expenditures.
The system facilitates Wal-Mart’s activity because client’s needs and requirements will be identified beforehand in each store which will be stocked up with high-demanded goods that will constantly be sold out and will not occupy the place.
This system is beneficial for clients, as the company provides them with commodities the customers want and need. The customers will no longer waste time on visiting stores to figure out that what they want is not there.
In terms of innovation and creativity, there are both benefits and downsides of working within an ecosystem. Among pros we can include the following:
If a product is good at selling which means that everyone buys it, shelves will become empty in a comparison with those products which are difficult to sell or nobody buys them, thus occupies the place in the supermarket.
Vendors will be able to identify whereas a good is low or high-demanded.
More satisfied client means more chances to come back for another purchase. Thereby, sales and a profit will enlarge. Moreover, satisfied client will inform their relatives and friends, which are going to be a perfect example of a good advertisement.
As soon as the system can be duplicated by competitors or different companies, it can undermine firm’s security and financial position, reveal classified information.
Concerns with the quality of the final product might appear as outsourcing vendors are not in a position to meet the requirements, which Wal-Mart’s vendors could.
