Strategic Analysis Report Of Bunning Company

Part A

Information system is the system that an organisation needs for the purpose of collecting data, managing the data; store the data as well as for communication purpose. Information system (IS) is basically software that helps in organising and analysing the data as an organisation has a large amount of data that needs to be managed properly. Strategic information system (SIS) supports the strategy of the organisation. This system has been developed for the response to the corporate world. SIS helps for the advantage of the organisation in the competitive world. This is considered as the essential feature in the world of corporation and IT (information technology). It helps the organisations in allocating, storing, processing the data as well as the information. It supplies some tools for the enhancement of the operation and function of the organisations. It helps in connecting the demands or needs of an organisation to the latest IT (Information Technology). In this report, an Australian company named as Bunning has been taken for the study of strategic information system.

1. Business Background

Bunning is an international company or warehouse of Australia that is considered as a chain of household hardware (Bunning, 2018). Wesfarmers is the owner of the company since 1994. Bunning Company has many stores in United Kingdom, Australia, New Zealand and Ireland. The company was established in Perth which is in Western Australia in the year 1887. It has about two hundred and ninety-four stores and approximately thirty thousand employees.

2. Industry

Household hardware industry is growing in Australia at the rate of 1.3 per cent annually. Bunning has significantly dominated the market of Australia as well as outside. The major companies such as Wesfarmers and Woolworths are playing well in the industry of household hardware. Woolworths and Wesfarmers (Bunning) are in the position of top and larger companies of Australia and also they are planning to open more stores all over the world (Bunning, 2018). The industries have experienced rapid growth in last few years.

3. General analysis of Environment

Political factor:	Stiff regulations are restriction on trading hours the major political effect on the concerned company.
economic factor:	The industry growth rate is low, as unemployment rate in Australia is 5.6% which determines high wage cost in Australia. The strength of New Zealand and Australian dollars has increased.
social-cultural factor:	As the number of women in workforce has increased it will positively affect the household hardware companies in Australia. Expectancy of life has also increased as well as average qualification among Australian citizens.
Global factor:	In global market, the r household hardware $70.3BN is the total sells percentage in every year. This determines high market growth in international market.
Technological factor:	The number of online shopping has increased. Even, by using technology the buying patterns of the customers can be analysed and can be delivered value-added services.
Legal Factor:	Bunning must abide by the terms and condition of insurance of Australia Group.
Demographic factors:	The household hardware company in Australia mainly targets women and high economic background people. This enhances the productivity of the hardware industry in Australia.

Table 1: PESTEL Analysis

(Source: created by author)

4. Analysis of Industry Environment

Supplier’s power	Bunning can connect with different suppliers for reducing powers of suppliers. Company can work on different materials based products to reduce the risk of price rise of materials. Bunning can develop effective relationship with the suppliers for minimising bargaining power of the suppliers. However, in the concerned industry, bargaining power of the suppliers is low.
Buyer’s Power	As the competition is in the concerned market, bargaining power of buyers is high. Bunning needs to develop large customer base to reduce bargaining of power. Bunning can introduce new products also to minimise bargaining of power.
Substitute products	In housing industry product’s substitute is high. Bunning can think to reduce the cost of switching of customers. It can focus on products as well as services to customers needs. The company should consider the actual needs of the customer rather than focusing only on the what customers are buying to reduce the number of substitutes
Threat of New Entrants	The threat of new entrants is high in this sector. The company can invest in it R & D department so that it can provide customised products which can restrict the growth of new entrants in this industry.
Rivalry competitors	Threat for rivalry or competition is high in this industry. The company should focus on to differentiate the products or service from the others companies. It can focus on innovation to acquire competitive advantage. The concerned d company work on sustainable product differentiation for giving competitive edge.

Table 2: Potter’s five force Analysis

(Source: created by author)

5. Competitive environment

The largest competitor of the Wesfarmers (Bunning) is Woolworths and others competitors are Metcash and many others. Woolworths is planning to be at the top position as their master’s stores are expanding rapidly. Woolworths is attracting customers so easily from other industries of hardware. Bunning is also expanding the stores to stay in the level of competition with Woolworth. The company is thinking something different so that this can provide something different to the customer in products or services. As the company is growing good and maintaining one of the greatest places in the household hardware industries so it is also focusing to provide something different to the customers and serve them in a better way.

6. Opportunities and Threats

Opportunity	Threats
? High scope of penetrating online market ? Expanding business in new sector ? Reducing release of carbon footprint and uses of energy	? High competition in Household hardware industry ? Cost of raw materials has increased

 Table 3: Opportunity and Threat Analysis

(Source: created by author)

Bunning can integrate the way of online purchasing and make it smarter for the customers. The company can think creatively about the household hardware such as people love them if they can get a better hangout place outside their home. Bunning should work more with latest technology to provide better service to the customers. Bunning can think and help the people to get their own home and provide some facilities for this. Bunning is also facing some threats as the competition is tough with the other companies of same industry. The companies that are providing the maintenance work, affects the purchase of household hardware. It has been seen that people are now not investing much in houses and this can affects the company.

Business Background

1. Tangible and intangible resources of firm

Tangible Resources

Tangible resources are the visible resources and it includes both the material as well as financial resources. As stated by Galliers and Leidner (2014), if any organisations work only with the tangible resources then the market or growth of the company may increase. Intangible resources help the growth of the company but not in all aspects. So the growth from tangible resources will not last for a long time.

Intangible Resources

The intangible resources are the resources that cannot be seen such as customer relationship, corporate culture, patents, technology, corporate image and many others.

In accordance with Pearlson, Saunders, and Galletta (2016), for the growth of an organisation, both the tangible as well as intangible resources are required. If a company work with both tangible as well as intangible resources than the patents, technology, customer relationship, image of the organisation as well as growth will also increase. The growth that has been come from the both tangible as well as intangible resources will last for long time.

2. Capabilities identification

Bunning is a growing company of Australia as it has about two hundred and ninety-four stores in the world and around thirty thousand as employees.

Innovation

Bunning is thinking about the innovation and always try to bring something new to the customers. Company is thinking to bring something that can make customers happy. It is now planned to do innovation in outdoor hangout.

Products diversification

Bunning is thinking about the diversification of the products and it is always focusing to provide the customers something new. It is thinking too

Service of customers

In accordance to Azaria et al. (2015), every day the company is trying to reduce the prices of the company and also the company is maintaining the loyalty with the customers for the brand name. The company is also providing free advice as well as training so that customers can learn the use of the household hardware themselves. The company has consultants who are well trained for doing the specialized jobs of the homes. Bunning is providing so many facilities to the customers of Australia and it has become one of the greatest hardware.

Market expansion skills: the company has the skills of acquiring new organisational culture and it even knows how to maintain diversity within the form. This determines that the company has the competency to expanding its business in a market. In order to expand its business, the company is always up for new technological innovation that improves its operations.

3. Analysis of core competency

Name of the test	Competency	Analysis
Relevance	Product diversification	With the help of this test, the Bunning’s capability of product diversification can be assessed. According to this test. The product launched by the company must be relevant to the market demand. If the diversified product failed to meet the market demand then the company does not hold the competency of product diversification.
Difficulty in imitation	innovation	As per this test, the company must develop the product which has difficulty in imitation. If the competitors fail to imitate the products provided by Bunning, then it will acquire a competitive advantage in the Australian market. Bunning makes sure customer safety and accessibility while innovating products. However, the products delivered by the concerned are not that costly to imitate which can be one of the threats to the company.
Application	Services to the customers	The service that is designed by the company for the customer that must be applied in order to ensure its competency. The competency test of application determines that Bunning developed services like value-added products as well as low-cost products. Customers have readily accepted those services and secured competitive advantage in the competitive market.
Extendibility	Technological up gradation	The company is capable of improving its technologies in order to meet the global standard. The test of extensibility can be used for assessing the competency of technological up-gradation. Bunning is capable of implementing new technologies in their firm by managing diversity. This determines that Bunning hold the competency level of technical upliftment.

Table 4: Core competency Analysis

(Source: created by author)

4. Solution of information system

The company is growing in a rapid way and it is using the technology also in a better way. In accordance to Arvidsson et al. (2014), as the company is thinking to increase the number of stores so it can face some difficulties in managing the data of the organisation as the company has too many stores to maintain. In accordance with Koech et al. (2016), it is required to change the information system of the organisation so that in future the company will not face any problem in managing the organisational data. There is number of employees that the company is managing. It has to deal with much information, however, in order to share the data and store those data for future. As stated by Ogiela (2015), if there is no proper software to store the data then it may cause the loss of information and the company can face some loss also. In accordance with Park and Lee (2014), it is necessary to think about the software change that has been used by the company for a long time. The business of Bunning is increasing in a great way but it should also focus on the strategic information system so that all the data can be managed easily without any loss. The information system that can be used by the company for managing the data in a proper way is POSTGRESQL.

Industry

5. Evaluation of proposed system and recommendation

The information system that has been proposed to be used in the Bunning organisation to manage the data in a better way is POSTGRESQL. As stated by Qrunfleh and Tarafdar (2014), it is a powerful database system that is open source and object-relational. It has completed the thirty years in the development activities and it has earned great reputation for its performance, feature robustness and reliability. It has the power to use and extend the languages of SQL that has been combined with many features. In accordance with Rezvani et al. (2017), it has the power to safely store the workloads of the data that is most complicated. It can run on all the operating systems that are majors. It is good in security, reliability, concurrency, performance, disaster recovery, extensibility, internationalisation and in many others ways. POSTGRESQL is good for the application that is embedded. In accordance with Upadhyay et al.(2017), the standard compliance of SQL of POSTGRESQL is high. Besides these advantages, POSTGRESQL has some disadvantages such as it cannot be supported by some application which is open source. It is not been supported by many hosting sites that are low budget. In accordance with Baptista et al. (2017), it has been found that POSTGRESQL is not owned by one company besides its features (Postgresql, 2018). However, it can be very beneficial for managing the data of a big organisation and can store the data for long time.

Conclusion 

The project report is about the strategic information system that is very beneficial for the business purpose. The company that has been taken here for the study of strategic information system is Bunning which is an international chain that provides household hardware. The company is growing well and following the strategy of the business. Bunning always tries to bring something new for the customers that help them to work easily and to enjoy inside the home. Bunning is using both the tangible as well as intangible sources and that is why it is growing rapidly in last few years. The company is taking the advantage of new technology and applying the knowledge to provide best service to the customers. They use the strategic information system that helps in structure as well as strategy of the business. The company is always in innovation mindset. There are many competitors of Bunning in household industry but Bunning always keeps the organisation updated and change the strategy of business with time and technology. It is still in the position of one of the greatest household hardware company in Australia. The company is about to open some new stores around the world and use the strategic information system for the growth of the company.

References

Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and strategies in managing information systems. Abingdon: Routledge.

Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information Systems, Binder Ready Version: A Strategic Approach. New Jersey: John Wiley & Sons.

Azaria, A., Rabinovich, Z., Goldman, C.V. and Kraus, S., 2015. Strategic information disclosure to people with multiple alternatives. ACM Transactions on Intelligent Systems and Technology (TIST), 5(4), p.64.

Koech, D.C., Gichunge, E.M. and Thuo, A., 2016. Factors Influencing Strategic Information Systems Implementation In Government Parastatals: A Case Of Kenya Forest Service, Mau Forest Conservancy. European Scientific Journal, ESJ, 12(15), pp.57-96.

Ogiela, L., 2015. Advanced techniques for knowledge management and access to strategic information. International Journal of Information Management, 35(2), pp.154-159.

Park, J.G. and Lee, J., 2014. Knowledge sharing in information systems development projects: Explicating the role of dependence and trust. International Journal of Project Management, 32(1), pp.153-165.

Qrunfleh, S. and Tarafdar, M., 2014. Supply chain information systems strategy: Impacts on supply chain performance and firm performance. International Journal of Production Economics, 147, pp.340-350.

Rezvani, A., Dong, L. and Khosravi, P., 2017. Promoting the continuing usage of strategic information systems: The role of supervisory leadership in the successful implementation of enterprise systems. International Journal of Information Management, 37(5), pp.417-430.

Upadhyay, S., Opoku-Agyeman, W., McCaughey, D. and Burke, D.E., 2017. The Association Between Organizational Characteristics and Strategic Information Systems Planning: A Study of US Hospitals. European Scientific Journal, ESJ, 13(36). pp. 69-10

Arvidsson, V., Holmström, J. and Lyytinen, K., 2014. Information systems use as strategy practice: A multi-dimensional view of strategic information system implementation and use. The Journal of Strategic Information Systems, [Online] 23(1), pp.45-61. Available at: https://www.sciencedirect.com/science/article/pii/S0963868714000055

Baptista, J., Stein, M.K., Lee, J., Watson-Manheim, M.B. and Klein, S., 2017. Call for Papers: Strategic Perspectives on Digital Work and Organizational Transformation. Journal of Strategic Information Systems, [Online] 26(4). Available at: https://www.guide2research.com/special-issue/call-for-papers-strategic-perspectives-on-digital-work-and-organizational-transformation