Kroenke describes the Management of Information Systems as being the “development and use of Information Systems that help businesses achieve their goals and objectives”. “Information Systems Today – Managing in the Digital World “(2010) states that they combine hardware, software, and telecommunications networks used by individuals to create, distribute, and collect meaningful data in organizational situations. Kroenke, chapter 1, (2005) states The goal of MIS is simply to achieve organisation goals and strategies. Information Systems are an integral part of business life and as described by Saylor Academy (2019), if used and implemented correctly, will provide a competitive advantage to companies.
When discussing Information Systems, it’s important to discuss the five forces that determine Industry Structure or more commonly known as Porter’s 5 forces. This framework analyses firm’s competition in the marketplace. Having a comprehensive understanding of your competitors will enable you to attain a competitive advantage in the market. Saylor Academy (2019), discusses how Porter’s model helps to clarify how IS provides a competitive advantage for firms. “Using Information Systems to Achieve Competitive Advantage” illustrates how these 5 forces affect the destiny of a firm and are listed ahead as follows. Conventional competitors, fresh market entries, the substitution of products and services, suppliers, and consumers. By understanding all competitors a company is faced with within their section of the market through the use of IS, they will certainly gain a competitive advantage.
An example of a Company that uses IS to achieve a competitive advantage in the marketplace is the world’s biggest retailer, Walmart. According to Walmart, (2019), their 2018 accounts showed they had a total revenue of over 514 billion dollars, serving over 200 million consumers weekly. In becoming this successful, they have mastered the application of IS to acquire a competitive edge over competitors such as Amazon, Tesco, and Aldi to name a few. I picked Walmart as they are the world leader in their field and have used information systems so cleverly, simply allowing them to be better then all competition they encounter in their operations.
Bourgeois, David explains “Retail Link”, a Supply Chain Management tool, as being one of the keys to their success. It was implemented in 1980 and was the first in the market to put in this kind of system into its operations. “Making Sense of Retail Link Data | Accelerated Analytics”, 2010) describes it as an internet tool, that allows suppliers key access to sales data and inventory information. Once implemented, suppliers could access this extremely valuable information at any one of Walmart’s thousands of stores across the country. It showed them how well certain products are selling in specific stores, and how not so well in other stores. This system is also used by suppliers to request additional stock if the data shows the stock of their products is falling too quickly. Suppliers are required to use this system to maintain and manage inventory levels. Prevor, 2007 discusses Walmart’s decision to change its official slogan from ‘’Always Lower Prices’’ to ‘’Save Money. Live Better’’ in recent years, which their low prices coming as a result of their revolutionary approach to how they manage and record inventory levels across their thousands of stores.
Walmart, (2019) refer to their operation of Information Systems and just how critical they are to the operations of their business. They rely on IS to process their transactions, gather data, and generally manage the business. Any disruption would severely disrupt business operations.
Examining Wal Marts Information System, (2017) discusses how Customer Relationship Management technology is another area that enables Walmart to gain a competitive advantage. Walmart uses CRM to attract and retain customers, making them loyal. Customer Relationship Management, (2014) describes them as being the pioneers of loyalty programs, which helps them retain and attract new customers to their stores. CRM technology is also used by Walmart to analyze and gather information on consumer actions and behaviors. Rigby, Reichheld, and Dawson, 2003, established that organizations can understand what customers want and need through interaction, with this interaction through staff combined with the CRM system, propelling them to the top of efficiency in understanding customers needs exactly and tailoring their products accordingly.
Examining Wal Marts Information System, (2017), explain how 2003 was the year Walmart introduced a Radio Frequency Identification System to improve their Supply Chain Management System. According to RFID Technology, (2015), RFID uses “wireless electromagnetic fields” to pass on data used to pinpoint and track tags attached to a product. This system allows for swift and effortless transfer of data on Walmart’s products from the production centre to its stores. They store a lot more information than conventional bar codes. As their company grew, it became more important to track all their products that were sent all across the world. This allowed them to avoid any ”out of stock” issues as they could track exactly where their products where and when. This system gave them a further competitive advantage as their system give them deeper and more advanced information in regards to their supply chain situations.
Walmart is the leading retailer in the world for a reason, it’s use and implementation of Information Systems. They are extremely efficient in the operation of their Supply Chain Management using tools such as Retail Link and RFID tags to manage their inventory levels and ensure they remain at an optimum and efficient level at all times. Their CRM is globally renowned as being top-class, as they understand exactly what their customers are looking for and provide these exact requirements to them. The use of IS has greatly improved their productivity, enabling low prices and their success, highlighted by their slogan ” Save Money. Live Better”.
References
- Information Systems Today – Managing in the Digital World, fourth edition. Prentice-Hall, 2010. ↵
- Bourgeois, D., n.d. Chapter 1: What Is An Information System?. [online] Bus206.pressbooks.com. Available at: <https://bus206.pressbooks.com/chapter/chapter-1/#footnote-5-2> [Accessed 20 April 2020].
- Saylor Academy. 2019. BUS303: Introduction To MIS: “Chapter 3: Achieving Competitive Advantage With Information Systems” | Saylor Academy. [online] Available at: <https://learn.saylor.org/mod/page/view.php?id=17463> [Accessed 19 April 2020].
- Relationshipwithcustomer.blogspot.com. 2014. Customer Relationship Management. [online] Available at: <http://relationshipwithcustomer.blogspot.com/2014/04/customer-relationship-management_25.html> [Accessed 22 April 2020].
- UKEssays.com. 2017. Examining WalMarts Information System. [online] Available at: <https://www.ukessays.com/essays/management/examining-wal-marts-information-system-management-essay.php> [Accessed 26 April 2020].
- Acceleratedanalytics.com. 2010. Making Sense Of Retail Link Data | Accelerated Analytics. [online] Available at: <https://www.acceleratedanalytics.com/blog/2010/10/01/making-sense-of-retail-link-data/> [Accessed 20 April 2020].
- Prevor, J., 2007. Wal-Mart’s ‘Save Money – Live Better’ Slogan Is Step In Right Direction. [online] Perishablepundit.com. Available at: <http://www.perishablepundit.com/index.php?date=09/14/07&pundit=1> [Accessed 22 April 2020].
- Walmart Supply Chain. 2015. RFID Technology. [online] Available at: <https://walmartsupplychain.weebly.com/rfid-technology.html> [Accessed 21 April 2020].
- Paginas.fe.up.pt. n.d. Using Information Systems To Achieve Competitive Advantage. [online] Available at: <https://paginas.fe.up.pt/~als/mis10e/ch3/chpt3-3bullettext.htm> [Accessed 26 April 2020].
- Walmart, 2019. 2019 Annual Report, Defining The Future Of Retail. [online] Walmart, pp.2-8. Available at: <https://s2.q4cdn.com/056532643/files/doc_financials/2019/annual/Walmart-2019-AR-Final.pdf> [Accessed 19 April 2020].
- Rigby, Reichheld, and Dawson, 2003. WINNING CUSTOMER LOYALTY IS THE KEY TO A WINNING CRM STRATEGY •. [online] Iveybusinessjournal.com. Available at: <https://iveybusinessjournal.com/publication/winning-customer-loyalty-is-the-key-to-a-winning-crm-strategy/> [Accessed 20 April 2020].
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