Business User System
a) In the Zara case study, it is clear that Salgado and Sanchez failed to read the changing markets at the time. Sanchez insisted on using software, which, though stable, was in the brink of being non-existent. They had already examined the system that they were using and had found its weaknesses. The vendor for the POS terminals had made it clear the Zara was the only one stuck with the old system. Zara had failed to conduct an industry analysis. It had failed to realize that though the operating system that they were using was stable, it would not be used within a short time. The current system does not have networking capability, yet Sanchez and Salgado are dealing with a company that has many stores. This is bound to affect its operations as the system they are using could collapse any time. The stores’ managers want POS that are more functional and have more capability (McAfee, Dessain and Sjoman, 2007). They are interested in the networking capability and they want to keep up with all the stores.
As a company, Zara deals with designing and making clothes for the younger generation and their tastes keeps on changing. At this point, they require technology that is not only stable, but is flexible enough to deal with the changing demands. Having up to date technology will enable Zara to keep up with the trends in design and manufacturing. Zara did not allow individual stores to set up the prices. The prices were set by the product managers, established in Spain and used the Euro (Energy monitoring system, 2011). Other countries used a percentage of this baseline and included the distribution costs and market conditions. This is a threat that the company has to deal with. Using this set up to set the price of their garments may make them more expensive than their competitors. One of the ways that a firm can change gain a competitive advantage is by lowering the price of its commodities. High fixed costs on the other hand work contrary to this since they subsequently increase the price of the commodities.
b) The case of a blogger in their midst uses a different approach from Zara. Will is willing to know all that he can about blogging and the Glove Girl as he has realized that this is influencing his business in a big way. Blogging seems to be more persuasive to the clients than advertising. While will might not fully support the Glove Girl, he is willing to put this aside and check the impact that her blog has had on the company. Glove Girl makes communication to the customers very easy. Using this as a tool has enabled the customers to relate more to the company and they have given feedback concerning various issues. It has worked as a marketing tool and has propelled the company forward. The company was able to sell gloves that were lying in the store and they had not even advertised for it.
Glove Girl is a useful tool in marketing for the company, if only it can be made official and report the facts as they are. She has however identified herself as an employee of Lancaster Webb and this fills the customers with more confidence. She has even defended the company on the blog and this proves to the company that she is not out to tarnish the company’s image. The customers are willing to believe all that she says because they have been with her through her journey. They feel that they can trust her because she opens up to them and she is truthful about the products that she describes. Instead of Will watching from a distance and willing to remain in the traditional system, he has taken it upon himself to know all that he can about blogging so that he can use it as a marketing tool. Will has examined the SWOT analysis and has been able to note that he has the opportunity of using Glove Girl before she is snatched away by another company.
a) Strategic decisions cannot be made without good and visionary leadership and management. Decision-making may prove to be hard process and one that needs to be planned. The merger of the three hospitals in the CareGroup case shows the importance of planning in all sectors. The management of the three hospitals might have seen the idea of a merger as a practical one then, but they did not plan at all angles. The hospitals started experiencing losses that were unheard of before the merger. The performance of Beth Israel Deaconess began recovering under the leadership of a different person, showing that the management might have been the problem in the first place. At the time of the merger, each group had a different CEO and the financial stability of the groups started declining. This means that there were no guidelines, which were clearly set to guide the takeover of the CEOs, and each CEO came up with his or her own style of management. Netflix on the other hand illustrated good strategic decision-making. Though the company did not have direct competitors, the company made sure that it offered the best to their clients. The company observed the weaknesses of the previous companies, which had not yet started to rent videos on the internet. They surveyed and noted what would satisfy the customers more and they utilized this. They offered home delivery services, unlimited rentals and a website where customers could view all the movies they wanted.
b) The CareGroup case is also a good illustration of poor IT project analysis and design. The hospital suffered major losses and confusion because they could not diagnose an IT problem. They tried working solving the problem in different ways only for it to recur. Without a test run to establish the workability of a program, the program causes confusion. Communication is also important because, had the person who was initially working on this case told the rest about the limitation of the program, such problems would not have been encountered (McFarlan & Robert, 2005). The IT department at Zara realized that the company would suffer if it relied on commercial software since it operated in different companies. It therefore designed its own software and this was particularly beneficial in the accounting department. This ensured that all the companies in different countries ran on the same program and everything ran smoothly.
c) The Netflix project is a good illustration of IT project implementation. Netflix venture into online DVD rental retailing was visionary. They realized the importance of the internet early enough and they capitalized on this. The company established a system where customers do not have to worry about returning their movies late once they have paid a fixed subscription fee. In addition, the customers can rent as many movies as they want for the month (Shih, Kaufman & David, 2009). The company realized that they had a slow delivery system and they used these incentives to attract their clients. Though RFID was viewed as an important breakthrough in technology, it also had its weaknesses. During implementation, it was seen that RFID was not capable of providing the information required by supply chain managers to aid in collaboration. They needed fast, accurate and reliable technology (Srivastava 2004).
d) Sanchez makes erroneous assumptions about the current operating system they are using. He does not see the need of disturbing that, which is working because it might end up causing many errors. He fails to see the technological changes that are taking place, not only in that particular industry but in other industries as well. Indetex has limited its markets by targeting on Zara alone (Kosecki & Neil, 2010). Zara contributes to most of its profits and it seems like if Zara were to experience a loss, then this would cause a huge loss to Indetex. In the ipremier case, the IT department does not make any assumptions regarding the cause of their website lockup. They take precautionary measures to protect their customers’ credit information. Their consistent effort and their ability to work quickly ensure that they find the cause of the problems.
e) Incomplete cost-benefit-risk analysis can cause problems to the company. in the CareGroup case, the management in the three hospitals failed to do a complete cost-benefit-risk analysis and they ended up incurring huge losses. They did not look at the cost that would be associated with the risk of merging the three hospitals and this cost them a lot of money (McFarlan and Austin, 2005). Zara on the other hand knows that it is taking a big risk by not using the internet to market its products. The company realized that it had to look for ways of minimizing its costs to offset the risk. It therefore spends a small proportion of its income in advertising. This saves the company a lot of revenue (McAfee et al 2007).
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