Corporations are increasingly adopting information system strategies in that they are turning to information systems technology to provide business units with competitive advantage.
Corporations are increasingly adopting information
system strategies in that they are turning to information systems technology to
provide business units with competitive advantage.
corporations are finding that the use of a sophisticated intranet for the use
of its employees allows them to practice follow – the –sun management, in which
project team members living in one country can pass their work to team members
in another country in which the work day is just beginning. Thus, night shifts
are no longer needed.
The development of instant translation software is
also enabling workers to have online communication with coworkers in other
countries who use a different language. Lotus Translation Services for Same
time is a Java –based application that can deliver translated text during a
chart session or an instant in 17 languages. Software, e-lingo (www.e-lingo.
com) offers a multilingual search function and Web surfing as well as text and
The use of information systems for improving
competitive advantage has become common. The case of Wal-Mart described in
Exhibit 14-1 exemplify this argument.
Exhibit 14-1 Wal-Mart Information
Wal-Mart started building a huge database of customer information in its data
warehouse systems located at its headquarters at Bentonville, Arkansas. The
company collected sales and customer related
information for each store and fed that information into the warehouse systems.
In the early 1990s, Wal-Mart continued to employ
new technologies to facilitate better analysis of customer data as they became
available. Wal-mart’s IT experts used 3-D visualization tools to make accurate
estimates of products most likely to be bought by customers on the basis of
parameters such as ethnicity, geographic location, weather patterns, local
sports affiliations, and around 10,000 other varied parameters. Wal-Mart made
around 90% of its stock replenishments every month, based on the analysis of
customer data generated through the data warehouse.
To make shopping at Wal-Mart a pleasant experience,
Wal-Mart installed customer information kiosks in its stores in 1996. The
kiosks helped customers find out the price of any product and get a brief
description of it. In 1996, Wal-Mart launched its website – www.walmart. com -
to provide information to its customers on all the products it stocked and to
enable online sales.
IT played an important role in improving the
efficiency of operations at Wal-Mart. The benefits which accrued were passed on
to customers, as per Wal-Mart’s policy. Wal-Mart’s annual report 1999 said, “The
first and the most important thing about Wal-Mart’s information systems is
precisely that the customer’s needs come first. By using technology to reduce
inventory, expenses and shrinkage, we can create lower prices for our customers
and better returns for our shareholders”.
At the dawn of the new millennium, Wal-Mart was one
of the world’s largest companies, with revenues of $165 bn in fiscal 2000.
Wal-Mart’s ‘store of the community’ program made effective use of bar code
technology and advanced data mining techniques. The ‘store of the community’
program was a very successful initiative by Wal-Mart, which contributed to
increased customer loyalty. By 2003, Wal-Mart was the world’s largest company,
with revenues in fiscal 2002 amounting.
Tags : Strategic Management - Strategy Formulation
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