Walmart Taps into Silicon Valley: Competitive Strategy- Case Study Report Writing Assignment

Internal Code: TV167

Case Study Report Writing Assignment:

Task: Walmart taps into Silicon Valley expertise by Barney Jopson and Richard Waters Walmart, the world’s largest retailer, has swung its bulk into the fast-changing world of social networks by acquiring a small Californian company that it will use to explore new ways of reaching shoppers digitally. The US retailer said it had agreed to acquire Kosmix, which has developed a platform to filter and organize material from social networking sites to present to individual users. It was founded in 2005. The move signals that Walmart is joining other multinationals seeking to set up outposts in Silicon Valley in order to tap into engineering talent and new ideas in the exploding social media and mobile internet businesses. The retailer did not disclose how much it had agreed to pay, but a spokesman said the figure was ‘not material’ to its business. Walmart posted global sales of $405 billion last year. Walmart said Kosmix and its founders would operate as part of a newly created group called @WalmartLabs, which will be based in Silicon Valley and develop technologies and businesses for shopping online and with smartphones. Until now traditional companies have mainly turned to social media sites such as Facebook and Twitter to help with their marketing, rather than seeing them as stand-alone business opportunities. But the soaring revenues of Groupon and other group- buying sites on the Web have prompted hopes that other new forms of e-commerce will emerge around them. Kosmix was founded by two online shopping entrepreneurs, Venky Harinarayan and Anand Rajaraman, whose first company, Junglee, was acquired in 1998 by Amazon for a reported $250m. Their Kosmix platform powers several websites, including TweetBeat, a real-time filter for live events. Stephen Wyss, a retail partner at BDO, an accounting firm, said: ‘Social media is an innovative way of knowing your customer, knowing what they want, and getting an understanding of what trends are.’ Walmart’s systems for tracking shoppers’ spending are already among the most sophisticated in the retail industry, but experts say retailers’ performance will increasingly be differentiated by the depth of their customer knowledge. Eduardo Castro-Wright, Walmart’s vice-chairman, said: ‘We are expanding our capabilities in today’s rapidly growing social commerce environment.’ Walmart is yet to develop a clear social commerce strategy. Questions 1. Can you think of any reasons (social/technological/market) that led to this shift in competitive strategy? 2. Do you think that the Walmart and Kosmix partnership signals a new and emerging trend for the e-tailing market? Why or why not? CHANGE, CREATIVITY AND INNOVATION Change is ubiquitous and permeates all aspects of our lives. We experience change in the workplace, in our homes, in the way we manage social relationships and in how we engage with people in society. Innovation and technology are often linked with the fast pace of change and the unpredictability of change processes does little to stem an ever-expanding body of literature (see Boje et al., 2012) that often seeks to find the best ways to effect successful organizational change (Cummings and Worley, 2008). For some, the quest is to find the most appropriate tools to help plan and manage change (Waddell et al., 2011), others focus on darker elements in developing critical theories of organizational change (Spicer and Levay, 2012), and some commentators suggest that change is an oxymoron (contradictory in nature) that should not be managed (Mintzberg et al., 2010: 98). The field is challenging and diverse (Schwarz and Huber, 2008), with a growing call for more reflective perspectives that counterbalance the tendency for management-centric studies that focus on a managerialist perspective, rather than on the actions, meanings and interpretations of those experiencing change (Alvesson and Sveningsson, 2008: 6; Boje et al., 2012).