In order to appeal to a sizable client market in society, Woolworth decided to invest in technology.
This may help improve the quality of its service delivery. The company also concentrated on modernizing its management to operate on a technology foundation, which will help it succeed as a corporation.
Woolworths had to make sure that people's perceptions of its prices changed and that line sales increased in order to overcome the supermarket challenge (Thieberger 2016).
Thus, the firm had to restore the market confidence on its ability to provide products and services in an efficient manner. It was also essential to establish the replacement of the liquor and core food business. The masters should also be existed from the business to support its growth and development in the market. The new C.E.O had to allocate resources for ensuring that the business achieves its competitive edge in the market. Moreover, the company had the challenge of replacing the C.E.O who will steer it towards having a competitive edge in the market.
What factors led Woolworths to take such strategic decisions?
The business took the strategic decisions because of the management problem it was facing and the need to overcome the intensive competition in the market environment. Moreover, buyer's behavior was changing as people were becoming sensitive of the prices of the products and services, which are offered by the firm.
Use Porter's five forces model to assess the situation of Woolworths. Where do you see the balance of power? How does this impact IT/IS strategy?
Woolworth's business does not have a high dependence on the suppliers, which indicates that supplier bargaining power is low. However, the bargaining power of the buyers is high because the business deals with individual buyers from the market environment. The new entry threat is not significant since the business has several stores and it has a competitive edge in the market environment. The threat of substitute products and services is high, which are introduced by other firms in the market environment. Furthermore, the business faces a significant rivalry with competitors. The balance of power on buyers and suppliers determines the strategic options, which the business has to embrace in order to be successful in its market environment.
What are the pros and cons of those big IT/IS strategic decisions for Woolworths in: (a) Short term, (b) Long term?
The short-tem pros of bit IT decision for the firm is that it will gain competitive advantage in the market environment and stay ahead of competitors. Thus, the business will have a good connection with suppliers for core systems, loyalty cards, data analytics, and have a cutting edge in point-of sale-system. The short-term cons are the high cost of investment in IT infrastructure.
The long-term pros are that the business will be able to curb external threat of new entry by businesses and having a long-lasting system of business operations and activities. Thus, the firm will have a chance to venture in other international markets. The long-term con is that competitors could steal the idea and implement it in their business, which could negatively affect the activities of the organization.
How important is the role of IT in Woolworths? Does the new management underestimate this role?
IT will play a significant role in Woolworths since it will help in ensuring that the business has the potential of achieving long-term competitive advantage (Chanticleer 2013). The consumer behavior is changing and embracing the aspect of IT. Therefore, IT will play a critical role in ensuring that the business survives the threat, which is induced by international retailers. The new management understands this role and it is focusing on embracing strategies, which will ensure that there is success in business activities. Further, the management aims at using different resources to support IT infrastructure.
Do you agree with the decision of new management in writing down millions of dollars in IT investment? Explain with reasons and recent examples from industry.
Yes. The move is good to create a strong financial position for the business (Tay 2015). The move will ensure that the business will be in a good position to meet its strategic goals for investment in IT. Such is a move, which is seen in the industry from competitors that include Coles Supermarkets among others (RIS 2008). Therefore, the action will ensure that the business has an opportunity for investment in technology, which will steer it towards achieving the desired success and growth.
What would you advise the CEO of Woolworths?
Woolworths CEO should consider cutting profit margins so that the business becomes competitive (King 2015). The market considers Woolworths as over-priced. Australians have indicated that grocery and food expenses are high, which indicates that supermarkets have the option of lowering the prices. The Big W for the company should also be changed to have the general merchandising, which could restore the profits of the firm. In addition, the CEO should turn the masters around for better performance.
Bibliography
Chanticleer., 2013. Woolworths dives into technology. Available online at:
http://www.afr.com/opinion/columns/woolworths-dives-into-technology-20130828-j0gdx
King, M., 2015. What will the new Woolworths limited CEO do? Available online at:
https://www.fool.com.au/2015/06/17/what-will-the-new-woolworths-limited-ceo-do/
RIS., 2008. Woolworths invests further in supply chain improvement technology. Available
online at: https://risnews.com/woolworths-invests-further-supply-chain-improvement-technology
Tay, L., 2015. Woolworths seeks technology edge after completing $100 m project galaxy.
Available online at: http://www.afr.com/technology/woolworths-seeks-technology-edge-after-completing-100m-project-galaxy-20150313-143i2z
Thieberger, V., 2016. Five challenges for Brad Banducci. Available online at:
http://www.theaustralian.com.au/business/opinion/five-challenges-for-brad-banducci/news-story/aa529b8b40c7a3b40fb3416e39c22959
