The strategic information systems are information systems and can be defined as a set of guidelines to help companies in setting plans and strategies as per the existing norms. The objective behind such systems is to enable entrepreneurs in assessing environmental changes and utilize in the beneficial aspects. The strategic information systems can be categorized into three types such as financial, operational and strategic.
This report focuses on Cole’s group. The report includes the external and internal analysis of Cole’s group. The report further proposes a suitable information system in order to gain a competitive advantage in the market.
Coles is an Australian supermarket, having headquartered in Melbourne. Coles makes available fresh food, groceries, liquor, fuel and general merchandise. The company has over 106,000 team members and operates more than 2,500 retail outlets globally. The company also sells products online through “Coles Online”. Coles aim to deliver quality, value and service to it’s customers (Balaji & Roy, 2017).
Coles Group belongs is linked to the retail industry. The retail industry of Australia is involved in selling goods and services to the customers by using various channels of distribution. These channels ensure maximum profits. The efficient supply chain of retail industry satisfies customers in Australia. The retail industry is the 2 largest employing industries in Australia.
Economic: The economic growth of Australia is higher than in other OECD countries. There is a low degree of risk and stable interest rates in Australia. But the recent changes in the economy have caused uncertainty and slow growth which has caused a serious threat to the retail industry including Coles Group.
Physical: There are various programmes and sustainability strategies in the physical environment of Australia which protects the business activities of Coles. These programs and activities lead to less impact on the environment (Chong, 2014).
Sociocultural: The social trends keep on changing fast and have an impact on the demand of Coles’s products. The health concern has caused a change in the attitude, lifestyle and societal aspect of the people.
Global: Coles has operations all over Australia and planning to expand in the countries like India and U.S (Courvisanos, Jain & Mardaneh, 2016). The company aims to sustain it’s growth by expanding operations.
Technological: Initially, Coles brought merchandising systems for the refresh projects in 2004. Then, it made an acquisition of Wesfarmers in 2007. The company also unveiled a ‘pick and pack’ technology to reduce the delivery time for the online shoppers. Coles implements changes day by day o enhance the online shopping experience of the customers.
Political/legal: The government has intervened in the daily operations of supermarkets in Australia. It also impacts on the vital areas of the business such as skills and specialization of the workforce (Hsu, Lin & Wang, 2015). The government also regulates the trading hours and monitors the functions of Australian Competition and Consumer commissions and the trade practices act.
Demographic:
Australia ranks 52 as a most populous country in the world. The population of the country is mainly in the urban areas and is expected to exceed 28 million by the end of 2030. The country has both religious and ethnic groups due to the presence of immigration policy (McGillivray, 2018).
Supplier power: The retail industry of Australia has experienced a structural power shift in the last 30 years. The suppliers held market power through the 1970s. The bargaining power of suppliers is high to moderate in the retail industry of Australia.
Buyer power: The buyers exercise considerable power in the retail industry of Australia. The switching cost between stores is low due to the availability of homogenous products. The bargaining power of buyers is high to moderate in the Australian market.
Potential entrants: The Australian retail industry is attractive to the new or potential entrants due to the good investment returns. The supermarkets in Australia have experienced modest annual growth in the recent years (Kurnia, Choudrie, Mahbubur & Alzougool, 2015). The low entry barriers provide one more attraction to the new entrants.
Substitute products: The supermarkets offer one-stop shop to provide a broad range of fruits, vegetables, and grocery items. The convenience store such as 7-Eleven is a substitute to the supermarkets but it offers a limited range of items compared to the Aldi and Woolworth supermarkets. Hence, there is the low availability of substitutes in the retail industry.
Rivalry among competitors: The supermarkets in Australia compete on the basis of price. The customers are price conscious and wish to experience value for money. The retail industry represents intense rivalry among the competitors.
The biggest competitors of the Coles are Aldi and Woolworths. Coles has adopted a strategy of driving rented and smaller format stores to retain customer sponsorship. Additionally, the company refreshes it’s retail locations. The company is also capable to add floors whenever necessary in the business (Phillipov, 2016). On the other side, Woolworth has earned good profits and the efforts made by it have caused reduced earnings of Coles. Woolworths has established simpler logistics arrangements. The cheap-cheap policy helped Woolworths to retain customers for a long time.
Opportunities: Apart from the supermarket sales Coles is trying to earn profits by selling private label goods to the customers. The company has growth opportunity in the liquor market as Wesfarmers which is one of the parental companies, already controls 20% of the liquor market. Coles can also enter into the insurance and finance sector as it is already having a large database of customers. The customized insurance policies can be made available which can be modified as per the needs of the customers (Richards, Kjaernes & Vik, 2016). The company can scan the markets for expansion in Asia where it can tap markets and conduct supply chain operations easily.
Threats: Coles faces threat when it comes to changing preferences of the consumers. It leads to the wastage of the products which are out of fashion. The new brands available in the market also cause competition and reduce profits. The implementation of rules and regulations related to food causes effects to the standard maintained by the company (Price, 2016).
Coles is one of the leading supermarket chains of Australia. 2,500 retail stores are operated under the Coles group with the support of 106,000 team members. The company has strong tangible and intangible resources. Coles have well-maintained management, diversified products, capable human resource management system, updated logistics management and the value of providing fresh and good quality fruits, vegetables and grocery items (St. John, Visinescu, Guynes & Prybutok, 2016). The company has a strong relationship with it’s customers in the Australia market.
The capabilities identified of Coles are it’s brand image, supply chain management, and human resources. The company has attained reputation for it’s slogan ‘save every day’ which has helped to build it’s image over years. The tangible and intangible assets helped the company to achieve significant cost savings. The positive perception of the people about the company has helped to differentiate from other companies and in gaining competitive advantage. The company has achieved higher growth even in the adverse conditions like rising inflationary rates and recessions.
The core competency analysis can be made from the points such as innovation, integration, branding and world-class supply chain. The supply chain helped the company to led innovations and gain competitive advantage. The innovations always aim at improving products and reduced costs. Coles uses new marketing strategies such as good quality at simplified prices. The digital devices used by Coles improved customer satisfaction. The company also made use of innovative design practices in the product development (Sutton-Brady, Kamvounias & Taylor, 2015). The top-level management in the Coles implements policies for the smooth operations of the company.
Coles should aim at using software which can handle all the activities in the single go. There should be an information system which can minimize the internal as well as external threats. It should aim at protecting data by making use of security techniques. The experts should be hired to design a system which can utilize invasion detection and prevent system for the confidentiality of data. The company can also adopt a system to control all the departments through one device (Swoboda, Elsner & Olejnik, 2015).
The proposed system solution will enable Coles to meet business requirements easily and will be able to conduct operations effectively. It is recommended to Coles to keep safe data of customers such as their contact numbers, account numbers, address, card details and more. The company will be able to maintain it’s standard in a better way if such aspects are considered.
Conclusion
The strategic information has a critical role in gaining competitive advantage. This report evaluated the internal and external analysis of Coles. An information system is suggested to the company in order to gain a competitive advantage. Coles is dealing effectively in the environment of Australia. The company is able to maintain it’s position in the market by competing successfully with Woolworths and Aldi.
References
Balaji, M.S. and Roy, S.K., 2017. Value co-creation with Internet of things technology in the retail industry. Journal of Marketing Management, 33(1-2), pp.7-31.
Chong, S., 2014. Business process management for SMEs: an exploratory study of implementation factors for the Australian wine industry. Journal of Information Systems and Small Business, 1(1-2), pp.41-58.
Courvisanos, J., Jain, A. and K. Mardaneh, K., 2016. Economic resilience of regions under crises: A study of the Australian economy. Regional Studies, 50(4), pp.629-643.
Hsu, C., Lin, Y.T. and Wang, T., 2015. A legitimacy challenge of a cross-cultural interorganizational information system. European Journal of Information Systems, 24(3), pp.278-294.
Kurnia, S., Choudrie, J., Mahbubur, R.M. and Alzougool, B., 2015. E-commerce technology adoption: A Malaysian grocery SME retail sector study. Journal of Business Research, 68(9), pp.1906-1918.
McGillivray, F., 2018. Privileging industry: The comparative politics of trade and industrial policy. Princeton University Press.
Phillipov, M., 2016. The new politics of food: Television and the media/food industries. Media International Australia, 158(1), pp.90-98.
Price, R., 2016. Controlling routine front line service workers: an Australian retail supermarket case. Work, employment and society, 30(6), pp.915-931.
Richards, C., Kjaernes, U. and Vik, J., 2016. Food security in welfare capitalism: Comparing social entitlements to food in Australia and Norway. Journal of rural studies, 43, pp.61-70.
St. John, J., Visinescu, L.L., Guynes, C.S. and Prybutok, V.R., 2016. Information and communication technology offshoring logistics success: A social exchange perspective. Information Systems Management, 33(3), pp.212-230.
Sutton-Brady, C., Kamvounias, P. and Taylor, T., 2015. A model of supplier–retailer power asymmetry in the Australian retail industry. Industrial marketing management, 51, pp.122-130.
Swoboda, B., Elsner, S. and Olejnik, E., 2015. How do past mode choices influence subsequent entry? A study on the boundary conditions of preferred entry modes of retail firms. International Business Review, 24(3), pp.506-517
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