The+Wal-Mart+Model

Under the Wal-Mart model, the vendor controls all aspects of the supply network. The vendor believes that it has the best vision of where all parties are going, and it unilaterally implements that vision. Wal-Mart, for example, unilaterally provided specifications for their vision of RFID implementation, including such giants as Proctor & Gamble in their vision. In this particular example, they moved the industry forward, although there were parties that were disappointed with the arrangements and later cut back the implementation to reduce costs.

At its best, the Wal-Mart model would have the vendor take meaningful input from its suppliers before laying out the vision. The vendor would paternalistically keep in mind the interest of all its suppliers, then take action that best serves the collective need. (To be fair, Wal-Mart probably tried its best to do so.)

If your company is a giant in the industry, at some level your company has the responsibility to make the industry competitive. Microsoft Corporation is in a similar situation to Wal-Mart, but their efforts to drive the industry forward, with software standards and advances in software, have often focused on Microsoft-owned proprietary technologies. Wal-Mart works with suppliers to create new technologies of general value.

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