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Retail Management

Notes of visits, preferences, order history and then uses this information for up-selling, cross-selling
and promotional opportunities. E-SCM provides the tool sets to get new business by reaching
out to customers that you never could before.
A strategic IS has been defined as “the information system to support or change enterprise’s
strategy”. Strategic management is the technique that an organization can plans the strategy of
its future operations; in the other word a SIS is a system to manage information and assist in
strategic decision making. The term strategic points to the long-term nature of this mapping
exercise and to the large magnitude of advantage the exercise is expected to give an organization
(Turban 2006). Four critical factors in developing and strategic IS are Initiation, data collection,
strategy formulation and short-term development. These factors are used to prioritize proposed
ISs, so that those giving competitive advantage to the organization can be highlighted for
immediate development (Karababas et al, 1994). IT contributes to strategic management in
many ways (for addition information see Kemerer, 1997, and Callon, 1996). Turban et al (2006)
introduce these eight factors:
1. Innovative applications. IT creates innovative applications that provide direct strategic
advantage to organizations. For example, Federal Express was the first company in its
industry to use IT for tracking the location of every package in its system. Next, FedEx was
the first company to make this database accessible to its customers over the Internet.
FedEx has gone on to provide e-fulfilment solutions based on IT and is even writing
software for this purpose (Bhise et al., 2000).
2. Competitive weapons. ISs themselves have long been recognized as a competitive weapon
(Ives and Learmouth, 1984, and Callon, 1996). Michael Dell, founder of Dell Computer,
puts it bluntly: “The Internet is like a weapon sitting on the table, ready to be picked up by
either you or your competitors”.

3. Changes in processes. IT supports changes in business processes that translate to strategic
advantage (Davenport, 1993). For example, Berri is Australia’s largest manufacturer and
distributor of fruit juice products. The principal goal of its enterprise resource planning
system implementation was “to turn its branch-based business into a national organization
with a single set of unified business processes” in order to achieve millions of dollars in
cost-savings (J.D. Edwards, 2002a). Other ways in which IT can change business processes
include better control over remote stores or offices by providing speedy communication
tools, streamlined product design time with computer-aided engineering tools, and better
decision-making processes by providing managers with timely information reports.
4. Links with business partners. IT links a company with its business partners effectively and
efficiently. For example, Rosenbluth’s Global Distribution Network allows it to connect
agents, customers, and travel service providers around the globe, an innovation that
allowed it to broaden its marketing range (Clemons and Hann, 1999).

5. Cost reductions. IT enables companies to reduce costs. For example, a Booz-Allen &
Hamilton study found that: a traditional bank transaction costs $1.07, whereas the same
transaction over the Web costs about 1 cent; a traditional airline ticket costs $8 to process,
an e-ticket costs $1 (ibm.com/ partnerworld/pwhome.nsf/vAssetsLookup/ad2.pdf/$file/
ad2.pdf). In the customer service area, a customer call handled by a live agent costs $33, but
an intelligent agent can handle the same request for less than $2 (Schwartz, 2000).
6. Relationships with suppliers and customers. IT can be used to lock in suppliers and
customers, or to build in switching costs (making it more difficult for suppliers or customers
to switch to competitors).

7. New products. A firm can leverage its investment in IT to create new products that are in
demand in the marketplace. According to Vandenbosch and Dawar (2002, p. 38), “The

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