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7418ICT Strategic Information Systems Management
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7418ICT Strategic Information Systems Management
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Course Code: 7418ICT
University: Griffith University
MyAssignmentHelp.com is not sponsored or endorsed by this college or university
Country: Australia
Question:
Write a strategic analysis report The strategic analysis will be on a local Australian company.
While making a report do not use the exact business name of the company you chosen, try your own imaginary name for example use Ameson instead of Amzon
Part 1
(External analysis)
1. Business background
2. What industry is it?
3. General environment analysis (economic, physical, sociocultural, global, technological, political/legal and demographic – and work out what the important facts are).
4. The industry environment ((i.e., supplier power, buyer power, potential entrants, substitute products and rivalry among competitors) and explain briefly what is significant for each).
5. Competitive environment (Is there a strategic group that you need to take account of? What is the rivalry like in this group? What capabilities do the relevant firms have? What strategies do they follow? What threats do they represent?)
6. Opportunities and threats
Part 2
(Internal analysis and proposal)
1. The firm’s resources, tangible and intangible
2. Capabilities identification (explain the capabilities carefully to indicate what the firm really does.)
3. Core competency analysis (For each capability, indicate which of the four tests for a core competency it meets).
4. Propose a suitable information system solution that meets the chosen company needs.
5. Evaluate the proposed system and provide your recommendations
Answer:
Introduction
Strategic management is the organization of the resources of the business to attain its objectives and goals. Strategic management is comprised of evaluating the competitive environment, assessing the internal organization, setting objectives, assessing strategies, and confirming that the administration rolls out the strategies in the organization. At its heart, strategic management helps in recognizing how a business compares itself with its competitors and identify threats and opportunities that business is dealing with (Shimizu, 2012). This report is based on the concept of strategic management in which the resources and capabilities of the Wheelworths supermarket will be identified to know how its goals and objectives are attained. Moreover, it will conduct an external environment analysis to identify the strategies of competitors and threat present in the current operating environment of the business.
Part 1
External Analysis
Background of Wheelworths
Wheelworths supermarket is one of the famous grocery store chains of Australia possessed by the Wheelworths Limited. The business was established in 1924, Wheelworths and Coles create a near-duopoly of the supermarkets in Australia, as they are comprised of around 80% of the market of Australia. Wheelworths specializes in vending groceries (fruit, packaged foods, vegetables, and fruit, etc.), however, they also deal in selling DVDs, beauty products, sell magazines, household products, health, baby and pet supplies and stationery products. Wheelworths presently runs 1000 stores in Australia (Woolworths Group, 2018).
Industry Analysis
Wheelworths deals in the Australian retail and supermarket industry. This industry can be determined as the companies retailing food lines and groceries. Cost reduction strategies are adopted by the companies working in the emerged industries, moreover, they gain competitive advantage through cost-based factors and not by differentiation-based factors. The establishment of private-label products in the industry is considered as the initiative of cost-reduction. This concept was introduced by ALDI in 2001 (Lucio, 2018).
PESTLE Analysis of Wheelworths Supermarket
Political Factors
The political situation influences the Australian retail industry and the operations of Wheelworths at the highest level. For example, a competition policy has been introduced by the Federal Government of Australia, which works to restrict the dominancy strategies for eradicating competition of main players in the market such as Coles and Wheelworths. The cumulative market supremacy of these main retailers has caused small shops struggling to accomplish within the industry (Fern Fort University, 2018).
Economic Factors
The decline in the economic conditions of the market in Australia has significantly influenced the activities of the Wheelworths because the economic activities in the New Zealand and Australia have been declined (S&P, 2018). Besides this, the international retail operations of Wheelworths has been negatively influenced by the decline in the economic situation, economic indicators such as fluctuations in the exchange rates of the currency.
Social Factors
The social factors are influencing the retail industry of Australia as the Wheelworths is operating its activities across Australia, which enforces it to attain higher community and societal development. This is happening due to the present social trend, according to which consumers prefer those organizations that are highly responsible towards society. Hence, by taking the societal initiatives, the big retailers like Wheelworths make considerable influence over its consumers.
Technological Factors
The importance of technological factor is influencing the industry of retail and Wheelworths in specific. It is important which could be recognized by the fact that Wheelworths supermarket has applied the green refrigeration technology such that the perishable products could be stored for a longer period.
Legal Factors
The carbon tax has been implemented in the Australia that has significantly influenced the industry of retail and particularly Wheelworths. An evaluation of Wheelworths reflects that the guideline by the Competition and Consumer Commission of Australia and Commerce Commission of New Zealand have impacted the operations of the businesses across the economy. Further, the requirement to operate activities in a reasonable manner has also influenced the operations of Wheelworths, because it is very important to adopt a reasonable policy to accomplish the operations of the business.
Environmental Factors
These factors are also influencing the Wheelworths performance and the whole industry of retail. The investigation reflects that specifically Wheelworths is influenced by the environmental factors because its winemaking and petrol businesses are posing negative threats on the environment and eventually it has disturbed the profitability performance of the businesses working in these areas.
Porter 5 Force Framework
Customer’s bargaining power
The Australian market involves various supermarkets and retail outlets that offer basic necessary products to the consumer, which considerably increase the bargaining power of the customers. Because customers possess broader options to choose from, their power of bargaining has been considerably higher.
Supplier’s bargaining power
The supplier bargaining power in the Australian retail industry is moderate to high, due to its concentrated nature as well as main companies who have spread their operations in the market and covered the market share of the industry.
The threat of New Entrants
In terms of new entrant’s threat, it could be regarded as lower because the big companies have made it very tough for the new companies to take entry in the industry and this eventually decreases the new entrant threat in the Australian retail industry (Fern Fort University, 2018).
Competition among existing companies
The key players in the market such as Wheelworths, Wesfarmers, Coles, and Asda are competing with each other for maximum market share, which has resulted in increasing the threat of competition in the Australian retail industry.
Threat of Substitute
The daily consumption of the basis necessary items is very important, but they do not have any substitute in the market that can offer same type of satisfaction to the customers, which considerably reduce the threat of substitute. Customers need to take the retail products because they do not have any other options.
Competitive environment
Strategic Group in the notion, which is utilized in strategic management that make groups of businesses in the industry and have the same type of business models or the same combination of strategies (MBA Skool, 2018). The strategies group within the Australian supermarket and retail industry is comprised of Wheelworths, Coles, and ALDI. All these three players in the market compete with each in terms of their attractive strategies to cover the market share. The quick development of ALDI supermarket in the last five years has considerably changed the whole industry (Schoff, 2014). ALDI has developed in reputation, majorly because of its private-labeled products, which are offered at discounted prices. The growth of ALDI has raised the threat and enforced the two well-known giants of the industry i.e., Wheelworths and Coles, to reduce the prices and increase the ranges of their private-label product (IBIS World, 2018). The rivalry between these strategic groups is high and is involved in product-based price wars.
In addition, to the competition among the players in the market, Coles supermarket established its campaign in 2011 with the name ‘down, down’, in which it offered its 6000 products at 10% low price. Due to this, the reflex action was noticed in the market i.e. Wheelworths initiated a campaign with the name ‘price knockdown’ and with the help of this campaign company successfully increased its sales by 4.7% in 2011.
The essential competencies of ALDI supermarket are its strict emphasis on price. There are numerous strategic procedures started by ALDI to confirm the same. These include the cost leadership strategy and focus (Management, 2018). On the other, the core competencies of Coles supermarket are its highly enhanced supply chain and being specialists in retail existence (Evaluation Partner, 2015). Both Coles and ALDI supermarket is giving strong competition as well as increasing threats for the Wheelworths supermarket through their strategies in terms of price and supply chain.
Opportunities for Wheelworths
Computerization, advanced supply chain, and altering lifestyle of the customers have enhanced the capabilities of the retailers’ and shows potential of growth, which is an opportunity for the Australian retail industry to develop. Wheelworths is also looking towards accepting this option by adopting the multi-option retailing strategy to manage the altering requirements of the consumers.
Threat for Wheelworths
The retail industry faces the major threat from the increasing level of competition within the industry with Wheelworths mainly opposing the Coles Supermarket. Besides this, the interference by the government is another key factor influencing the growth of the Wheelworths specifically in the Australian retail (Fern Fort University, 2018).
Part 2
Internal Analysis
Resources of Wheelworths
Wheelworths operates around 1000 stores in Australia with 111,000 employees. This reflects that both intangible and tangible resources of the company are very strong. Wheelworths has well-organized human resource and management, an extensive variety of products and skills of product innovation, well-organized management of logistics, effective brand image, and status for fresh food and quality, alliance and partnership management and good relationship with the vertically integrated businesses (Woolworths Group, 2018).
Capability identification
Capabilities mean the skills of the organization in organizing its resources and placing them in the correct place to increase productivity. It has been analyzed the from 1924 Wheelworths is operating its business activities very effectively; which means that it is very much capable enough to make use of right person at a correct place and Wheelworths possess a good knowledge regarding the use of resources.
Core Competencies
Effective supply chain- The efficient network of distribution in the Wheelworths is both a capability and resource in the inbound logistics. The intangible and tangible assets like supplier relationship and technological capabilities are highly valuable.
Brand Reputation- The reputation of the Wheelworths as the fresh food supplier was created over several years. This was achieved through the positive experience of the customers by offering products that can be credited to its severe quality valuation processes all over its supply chain along with its “fresh food people” campaign of advertisement (Woolworths Group, 2018).
Effective top management- In spite of declining pressures and increasing rates of inflation, Wheelworths supermarket is still capable to attain growth rates at higher than predictable levels; this has been achieved by the business because of its capable top management.
Innovation- Wheelworths has worked on various projects, comprising ‘new idea program’ and’re-fresh’.
Analysis of Core Competencies
Model of Core Competencies
The model of core competencies concentrates on the mixture of precise, combined, applied knowledge, collaborative, attitude, and skills. As per Hamel and Prahalad, the strategic objectives must not be concentrated towards fighting with the rivalry but on making a fresh competitive space (Kawshala, 2017).
1. Fill in the Blanks
Here a business recognizes what core competencies could be utilized in present markets. The core competencies of Wheelworths i.e. strong supply chain could be used in the existing market, as it has been effective all the time in delivering specific services to the end user with the help of suppliers.
2. White Spaces
By arranging competences in the new marketplace, a risk arises that a business might have a large number of diversification within its services or products. Therefore, the business needs to remain close to its main business offerings. By framing clear targets, the company could deal with different risk (Kesho, 2015). The company could make use of its effective top management, which is comprised of skilled and experienced people to remain competitive.
3. Premier plus ten
The principle of the strategy is to deploy new competencies in the present market in ten years. Wheelworths could bring a new or innovative product to the market to compete with the rivals and stay for a longer period.
4. Mega Opportunities
This strategy possesses high potential because the business is shifting towards the territory, which is unfamiliar, and there is some possible risk involved. Hence, to deal with the risk and take the advantage of opportunities business could make use of its brand reputation in the new market and attract its target market.
Information System
Management Information system
Management information system also known as IMS is a widely utilized and practical term for a three-resource system essential for operative management of the organization (Karim, 2011). The resources are technology, information, and people, from outside and inside of the business, in which top priority is provided to people. This system is the combination of methods of information management comprising computer automation or then supporting and enhancing the efficiency and quality of the operations of the business and human decision-making.
Wheelworths could make use of Management Information system as it operates as the single integrated system. An integrated system permits for enhanced communication between managers, employees, administrators, and head of the department. For instance, a complete integrated management information system will offer the similar framework of data to the department of sales as it will offer to the manufacturing plant (Hanks, 2018).
Evaluation and Recommendation
If Wheelworths will implement the management information system then it will help business in improving the communication at all the levels and skills of decisions making. However, the system does have some issues related to the security of the data. Hackers always target the sensitive data of the company. Such type of data comprises back records, personal data, and vendor information. The hackers take all the data and distribute it to the competitors of the company, which affects the image of the company. Hence, if Wheelworths will implement a management information system it needs to take care that the sensitive data does not come into the hands of hackers. For this, the company needs to implement preventing systems such as Firewall to in order to stop the unauthorized access.
Conclusion
From the above analysis, it can be concluded that the Australian retail and supermarket industry is very competitive and to survive in the industries companies are framing the best strategies. Wheelworths and Coles are majorly dominating the whole industry as they account for 80% of the market share. However, ALDI supermarket is giving strong competition to both the supermarket by offering private labeled products at discounted prices. Due to this, Wheelworths and Coles have reduced their prices. Moreover, the resources of Wheelworths supermarket are supporting increasing its productivity. The core competencies such as brand reputation, innovation, supply chain, and top management of the business are very effective due to which company is able to maintain its position and market share in the industry. The report has suggested implementing the Management information system to Wheelworths in order to increase the probability of effective decisions making and enhanced communication.
Recommendations
Wheelworths must invest more in the promotion of its services. More precisely, Wheelworths must make advertisements portraying how their fresh variety of healthy meals will fit the daily routine of the customers. This will increase the brand recall of the Wheelworths in the mind of the customers, which increases the probability of purchase.
References
Evaluation Partner (2015) Coles [online]. Available from https://www.evolutionpartners.com.au/5-reasons-kogans-killer-new-strategy-should-worry-coles.html [accessed 22 August 2018]
Fern Fort University (2018) Woolworths Limited PESTEL & Environment Analysis [online]. Available from https://fernfortuniversity.com/term-papers/pestel/nyse4/4816-woolworths-limited.php [accessed 22 August 2018]
Fern Fort University (2018) Woolworths Limited Porter Five Forces Analysis [online]. Available from https://fernfortuniversity.com/term-papers/porter5/asx/627-woolworths-limited.php [accessed 22 August 2018]
Fern Fort University (2018) Woolworths SWOT Analysis / Matrix [online]. Available from https://fernfortuniversity.com/term-papers/swot/1433/1138-woolworths.php [accessed 22 August 2018]
Hanks, G. (2018) Advantages & Disadvantages of Management Information Systems [online]. Available from https://bizfluent.com/about-5494879-advantages-disadvantages-information-management-systems.html [accessed 22 August 2018]
IBIS World (2018) Supermarkets and Grocery Stores – Australia Market Research Report [online]. Available from https://www.ibisworld.com.au/industry-trends/market-research-reports/retail-trade/food-retailing/supermarkets-grocery-stores.html [accessed 22 August 2018]
Karim, A.J. (2011) The significance of management information systems for enhancing strategic and tactical planning. Journal of Information Systems and Technology Management, 8(2), 459-470.
Kawshala, H. (2017) Theorizing the Concept of Core Competencies: An Integrative Model beyond Identification. International Journal of Scientific and Research Publications, 7(2), 253-256.
Kesho, P. (2015) Strategic Management: Text And Cases 2nd ed. Chicago: PHI Learning Pvt.
Lucio, R. (2018) Supermarket industry eyes growth [online]. Available from https://insidefmcg.com.au/2018/02/20/supermarket-industry-eyes-growth/ [accessed 22 August 2018]
Management (2018) ALDI supermarket core competencies [online]. Available from https://best-management-articles.blogspot.com/2013/05/aldi-supermarket-core-competencies.html [accessed 22 August 2018]
MBA Skool (2018) Strategic Groups [online]. Available from https://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/7190-strategic-groups.html [accessed 22 August 2018]
S&P (2018) Woolworths Limited SWOT & PESTLE analysis [online]. Available from https://www.swotandpestle.com/woolworths-limited/ [accessed 22 August 2018]
Schoff, P. (2014) Competition in the Australian Grocery Industry [online]. Available from https://www.competitionpolicyinternational.com/competition-in-the-australian-grocery-industry/ [accessed 22 August 2018]
Shimizu, K. (2012) The Cores of Strategic Management 2nd ed. U.S: Routledge.
Woolworths Group (2018) Culture and People [online]. Available from https://au.gradconnection.com/employers/woolworths-group/human-resources/ [accessed 22 August 2018]
Woolworths Group (2018) Our Customers and Community [online]. Available from https://www.woolworthsgroup.com.au/page/community-and-responsibility/group-responsibility/environment [accessed 22 August 2018]
Woolworths Group (2018) Woolworths Supermarket [online]. Available from https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/Woolworths [accessed 22 August 2018]
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