Discuss about the IT Management Issues for Oz Supermarket.
Oz Supermarket is a retail chain business that deals with the sale of wide varieties of non-perishable items like stationeries, household goods, daily usable items and others. The retail stores have a unique method of payment and sale. The customers need to use a card with certain balance and whenever the customer places an item in the cart, the price of the item is automatically deducted from the card. As a result, there are no cash transactions or long queues in front of the payment counters.
In this report, the business operations of the Oz Supermarket retail chain has been analyzed and suitable recommendations have been provided.
Oz Supermarket is a retail chain business that deals with non-perishable daily use items and stationeries. Unlike other retail chains, the business operation of this company is quite different and unique. This mainly owes to the fact that the company is utilizing the latest technology for cashless transactions. The retail stores of this company do not have any cash transaction system (Jeong, Kim & Yoon, 2014). The customers need to use a card with certain balance and whenever the customer places an item in the cart, the price of the item is automatically deducted from the card. There is also a system of temporary cards for tourists and children. The current business operations of the company are extremely convenient for the customers and the system itself is unique. However, maintenance of this system requires significant maintenance costs as well as proper planning. The technology used by the company is quite expensive and the maintenance of such a system is even more expensive. However, the technology also incurs significant amount of expenses. Unless these expenses are covered by the generated revenue, the company will start encountering huge losses (Ajmera et al., 2013). Hence, the company needs to prepare a suitable plan for the implementation of technology in their business. The expenses behind the use of technology are explained below.
PayWave Technology – This technology utilizes RFID tags and transaction cards. The transaction cards are to be recharged with certain amounts of money. The RFID tags are attached to each of the products sold by Oz Supermarket. The shopping cards also contain some RFID detector devices that also connect to the PayWave cards by the user verification id (Peltier, Zahay & Krishen, 2013). Once a customer places a certain product in the cart, the reader reads the RFID tag of the product and deducts the price from the customer’s available balance in the PayWave card. Due to use of RFID tags for every product, the expenses significantly increase for the purchase and maintenance of the tags.
Cards – The cards used for the PayWave Technology are specially made so that that can connect wirelessly to the RFID as well as the system server where the fund balance for each user is stored (Kilic, Zaim & Delen, 2015). Hence, these cards are extremely expensive. Moreover, many of the customers accidentally damage or lose these cards. As a result, the company has to issue new cards for the customers. This further increases the overall costs.
On the other hand, the company absorbs all the expenses from the revenue and the main source of income are the revenues from the sales and the parking space. This is risky – as both of these are not constant or stable sources of income and if the customer count decreases, the revenue will also start to decrease significantly.
Conclusion
This report deals with the analysis of existing business system in Oz Supermarket retail chain. Unlike other retail chains, the business operation of this company is quite different and unique. This mainly owes to the fact that the company is utilizing the latest technology for cashless transactions. The retail stores of this company do not have any cash transaction system. The customers need to use a card with certain balance and whenever the customer places an item in the cart, the price of the item is automatically deducted from the card. However, the technology also incurs significant amount of expenses. Unless these expenses are covered by the generated revenue, the company will start encountering huge losses. Hence, the company needs to prepare a suitable plan for the implementation of technology in their business.
Based on the analysis of the business system in Oz Supermarket retail chain, the following recommendations can be suggested.
ERP System – In order to maintain the business system, the company can consider implementation of ERP system. The current business operations of the company are extremely convenient for the customers and the system itself is unique. However, maintenance of this system requires significant maintenance costs as well as proper planning. The technology used by the company is quite expensive and the maintenance of such a system is even more expensive. The ERP system will enable the company to prepare a more solid pricing and business strategies that will help the company to recover these expenses from the revenue as well as gather significant profits.
CRM System – Maintaining a healthy customer relationship is necessary for any business organization. The business organization can use any technology they like but the increase in the business depends largely on the relationship the company has with the customers. Supermarket Oz has a well-defined business structure as well as strong support of latest technology but the company is yet to venture in the customer relationship area. It is suggested that the company should implement CRM system in order to develop a good customer relationship. This will enable the company to gain more customers resulting in the rapid rise of revenue.
Use of Technology – The company uses unique and latest technology that is definitely beneficial for the business. However, the technology also incurs significant amount of expenses. Unless these expenses are covered by the generated revenue, the company will start encountering huge losses. Hence, the company needs to prepare a suitable plan for the implementation of technology in their business. The ERP system will help the company to prepare a suitable business strategy. Accordingly, the company should also have a strategy to deploy technology. During the preparation of the financial planning, the company should have a certain part of the budget allocated for the deployment of the technology. The overall expenses on technology should not exceed this limit unless the annual revenue increases by a significant percentage.
Other than the implementation of CRM system, the customer service of the company can be enhanced by implementing some basic strategies and policies. These are discussed below.
Information and Communication Technology (ICT) – ICT is an important technology for any customer service. The ICT system provides a common server in which, all the users of the customer care department are connected together (Jaakkola & Alexander, 2014). The customer feedbacks and all the relevant data are stored in this server. The customer care staffs can communicate with the customers with the help of ICT system regarding services, products and feedbacks.
Use of the Internet and Social Media – The company can use the internet (specifically the social media) as the platform for providing customer services. They can open a customer care forum in the social media site where customers can submit their complaints or feedbacks that can then be addressed by the company.
Surprise Gifts and Coupons – The main idea behind this is to surprise the customers with gifts or coupons. Unexpected gifts and surprises will always please the customer and he will be interested in further transactions with the company (Liu & Whitt, 2017). These surprise gifts can also be replaced by weekly contests where the customers can win several prizes. If these contents and gifts can be provided on regular basis, the customer count of the store will gradually increase significantly, earning high amounts of revenue for the company.
The company should analyze customer feedbacks and make changes in the business parameters according to the demands of the customers. The implementation of the customer service system will aid the company in this aspect and the sales parameters will depend on the general feedback outcome generated from the customer service system.
The following three suggestions can be provided to the company for improving business services and gain more customers.
Customer Feedback – The business services of the company can be enhanced by a customer feedback system. Any business is run successfully if the customer demands are met at the right time. Hence, knowing the customer demands is necessary. In order to do that, a customer feedback system has to be installed. This can be done through feedback forums in social media or some other websites. In these feedback forms, the customers should have the option to review a particular product or service based on quality, quantity and pricing. The company should analyze these feedbacks and make changes in the three parameters according to the mass demands (Heskett, 2013). The implementation of the CRM system will aid the company in this aspect and the sales parameters will depend on the general feedback outcome generated from the CRM system. Moreover, regarding the use of technology, the company should emphasize on customer feedbacks. This is because even if the company uses modern and latest technology, some customers may not be able to operate using the gadgets. Many customers will take time to adjust with the cashless transaction and the PayWave Technology. Again, there are cyber security risks associated with the cashless transaction system and hence, the customers may feel insecure regarding the transaction process in the store. The company should analyze the feedbacks of the customers regarding these issues and take suitable steps to address them.
Product Quality Review – The business operations of the organization can be improved by a product quality review forum. Any retail business is run effectively if the product quality is standard at a suitable and reasonable price limit. With a specific end goal to do that, a product quality review forum must be introduced. This should be possible through quality review discussions in web-based social networking or some different sites. In these input frames, the clients ought to have the choice to survey for a specific item or service in terms of pricing, quality and quantity (Piccoli, Lui & Grün, 2017). The organization ought to examine these inputs and roll out improvements in the three parameters as indicated by the mass requests. The usage of the CRM framework will help the organization in this perspective and the business parameters will rely on upon the general quality review produced from the CRM framework.
Pricing and Variety – Pricing and variety are two important aspects of business. Different customers prefer different varieties of products from different manufacturers. Hence, keeping different varieties of similar products for sale is necessary in order to attract a wide range of customers. If the store can attract a wide range of customers, the overall revenue will also increase (Lusch & Vargo, 2014). For instance, let the store sells deodorant sprays. Now, different customers prefer deodorant sprays of different brands. Now, if the company sells only one brand, the customers that prefer other brands will not come to the store. On the other hand, if different brands are sold, all the customers will come to the store for buying the sprays. Hence, variety is an important factor for business operations. Another important factor is the pricing of the product. While the pricing should be such that the company can compensate all the expenses with the revenue, the prices should also be reasonable and cheap with respect to the prices of other nearby stores. For instance, let the store sells a particular item at $35 whereas other nearby stores sell it at $20. In this case, the customers will prefer the store that sells the item at $20. Again, if the store decides to sell the item $15, the customers may be attracted to buy from the store but the company will incur losses as the price of the product is too low. Hence, the store must be aware of the all the related factors before setting the prices of the products sold.
References
Ajmera, J., Ahn, H. I., Nagarajan, M., Verma, A., Contractor, D., Dill, S., & Denesuk, M. (2013, May). A CRM system for social media: challenges and experiences. In Proceedings of the 22nd international conference on World Wide Web (pp. 49-58). ACM.
Heskett, J. L. (2013). Controlling customer logistics service. International Journal of Physical Distribution & Logistics Management.
Jaakkola, E., & Alexander, M. (2014). The role of customer engagement behavior in value co-creation: a service system perspective. Journal of Service Research, 17(3), 247-261.
Jeong, D., Kim, S., & Yoon, D. (2014). Customer Orientation and Organizational Performance: Mediating Role of CRM. Advanced Science and Technology Letters, 57, 35-39.
Kilic, H. S., Zaim, S., & Delen, D. (2015). Selecting “The Best” ERP system for SMEs using a combination of ANP and PROMETHEE methods. Expert Systems with Applications, 42(5), 2343-2352.
Liu, Y., & Whitt, W. (2017). Stabilizing performance in a service system with time-varying arrivals and customer feedback. European Journal of Operational Research, 256(2), 473-486.
Lusch, R. F., & Vargo, S. L. (2014). The service-dominant logic of marketing: Dialog, debate, and directions. Routledge.
Nwankpa, J., & Roumani, Y. (2014). Understanding the link between organizational learning capability and ERP system usage: An empirical examination. Computers in Human Behavior, 33, 224-234.
Peltier, J., Zahay, D., & Krishen, A. S. (2013). A hierarchical IMC data integration and measurement framework and its impact on CRM system quality and customer performance. Journal of Marketing Analytics, 1(1), 32-48.
Piccoli, G., Lui, T. W., & Grün, B. (2017). The impact of IT-enabled customer service systems on service personalization, customer service perceptions, and hotel performance. Tourism Management, 59, 349-362.
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