Many companies are made or broken by the way their products sell at Wal-Mart. Being that Wal-Mart is the country’s single largest retailer, they have the ability to be the price leader for their industry. But even with that said, on the supplier side Wal-Mart is also able to dictate how suppliers interface with them as well. Wal-Mart sent out letters to each of their 14,000 suppliers stating if they wanted to continue to do business with them, it would have to be on Wal-Mart’s technical terms. The company requires that all of its vendors would need to use new data transmission protocols called EDI-INT, which are electronic data interchange internet integration, and another application called Applicability Statement 2, which handles all purchase orders, invoices, billing, and correspondence for all pricing. The new systems allow for Wal-Mart to directly exchange data and information between them and their suppliers rather than have it routed over the Internet through an e-mail server. Wal-Mart does not want its suppliers to use a traditional EDI that requires Value-Added Networks to securely pass communications between Wal-Mart and its partners. Before AS2 was created, Wal-Mart’s suppliers needed VANs to send information, which basically use the communication services of a third party commercial carrier to transmit the data between the two. AS2 on the other hand takes the data that needs to be sent, puts it into a file and encrypts with a digital certification, once the recipient receives the document, the person would need that software as well to decrypt the document for easy translation, this provides a much more scrutinized form of security for Wal-Mart and their suppliers. With all of the low pricing strategies Wal-Mart maintains, they must stay on the cutting edge of technological security in order to stay ahead of the curve and not let any information fall into the hands of their competitors.
http://www.baselinemag.com/c/a/Business-Intelligence/WalMart-Dictates-Technological-Terms/
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