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Management Information System - Retail Sector

Essay by   •  December 29, 2010  •  Research Paper  •  2,145 Words (9 Pages)  •  2,042 Views

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Introduction

Industries in our modern day are facing tremendous pressures or drivers like society conformation, technology innovation and market competition. These three forces describe by Boyett and Boyett, (1995) catalyzed an organization to initiate goodwill responses, improve their technological platform and invent systems to automate their operational processes. These are efforts contributed to retain their competitive edge thus preserving their existence.

In the context of this essay, we will be using the consumer electronics retailing industry as a focal point for arguments. We will also discuss the following:

* Market, Technological and Societal Pressures and how it affects the industry.

* The industry responses to these business pressures.

* How will the particular industry gain by using Information Technology (IT).

* How IT aids in decision-making processes and problem solving situations.

What are these Business Pressures or Drivers

Huber (2004) deduces that the business environment comprises of factors like social, technological, legal, economic, physical and political. In our discussion, we will be narrowing our focus to market pressure, technological pressure and societal pressure.

Business pressures could be visualized as surrounding forces that encompass an organization. An organization needs to retaliate to these forces from undermining its existence. In particular, market and technological pressures can be subsided through the deployment of strategic systems or adopting IT as a facilitator. A way to abate Societal Pressure is to promote and contribute environmental goodwill.

The local consumer electronics retailers are immerse in intensive competition with each other. With foreign players like Best Denki and Harvey Norman entering the scene due to globalization, they need to realign their strategies to remain in competition. We will be extracting scenarios from case studies and publications on these three relevant companies in our chosen industry; Best Denki, Harvey Norman, and Mega Discount Store (a local company) on how they react to certain business pressures and demands. Please refer to references for articles source.

Market Pressures

We will analyze three segregated areas of market pressures. As construe by Turban et al, (2006: 13-20). They are strong competition and globalization, need for real-time operations and powerful customers.

1. Strong Competition and Globalization

Local consumer electronics retailers have found themselves entangled in a fragmented competition. Most of these localized businesses do not engage in major advertising efforts, they do not incurred high marketing overheads. Hence their popularity is confined. To substitute that, they rely strongly on personal selling and relationship building with the neighboring consumers through word of mouth advertising.

Major global players like Harvey Norman (Australia) and Best Denki (Japan) knocking on the doors of our local market could be one of the causes for the thinning of profit margins for the local companies. The signing of international trade agreements could have attracted these foreigner investors. For Example: The signing of the Singapore Australia Free Trade Agreement (SAFTA) and Japan Singapore Economic Partnership Agreement (JSEPA).

2. Need for Real-Time Operations

Today's business demands an increasing need for transactional flexibility and smooth operational procedures. A competent point of sale (POS) system that is capable of handling dynamic transactions is crucial in the retail industry.

Mega Discount Store, a local consumer electronics retailer has lament on its aging POS system with limited capabilities. Their POS system is only able to fulfill retail transactions and does not have advance functionalities to handle order fulfillment and delivery.

Best Denki has their own share of problems. Their previous POS system is not able to comprehend situations like refunding cash balance to a customer if he or she uses vouchers to pay for the items. On top of that, the system is slow in responding and gets worse when generating reports. Finally, the reports generated were often not accurate enough.

3. Powerful Customers

Customer demands and needs are getting more sophisticated. High standards of service level are an essential expectation these days.

With the availability of the Internet, customers are now able to source for information about the products they want, do competitive price comparison and look for other channels of purchasing (Turban et al, 2006: 14-5). With online auctions and classifieds websites like Ebay and Yahoo Classifieds, it does offer another alternative for the prospective customer.

Technological Pressures

Moore's Law originated from Gordon Moore, the co-founder of Intel implies that the processing power of silicon chips would double by every eighteen months (Moore, 1997).

In relevant to that claim, we could assume that computers in general would gradually improve in performance.

Faster processing computers would allow one to do more tasks using less time. This chain reaction leads to an increase in productivity.

With the rapid advancement of technology comes together with the importance of keeping pace with it. Failure to do so could diminish one's competitiveness especially so if the other competitors are leveraging on the latest technological platform.

Societal Pressures

Turban et al (2006: 15-7) states that pressures deriving from the society are known as societal pressure. Societal pressure could be differentiated into social responsibility, government regulations and homeland security. Below are instances on how Harvey Norman has engaged themselves in a number of society activities to portray and uphold a responsible status in public's eye.

1. Social Responsibility

The National Environmental Agency and the Singapore Environment Council organized a "Go Green" contest in September 2002 to encourage the use of environmental friendly products. Best Denki and Harvey Norman

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