Discuss about the Key Strategic decisions taken by Woolworth Plc for enhancing and growing Business in Domestic and International Market.
This report reflects the key strategic decisions taken by Woolworth Plc for enhancing and growing business in domestic and international market. In addition to this, investment in installation of major application information system has been discussed.
Big decisions Woolworth in context with IT/IS strategy
It is observed that Brad Banducci has come up with business plan to introduce a restructured operating model which will be adopted with a view to increase the efficiency and productivity of organization. It is evaluated that if he will introduce a restructured operating model then it will result to split the online business and more than 1000 workers will be indulged in operating functioning of organization. However, if organization introduces a restructured operating model then it will also increase the client satisfaction establish automation in Woolworth’s value chain activities and strengthen the online business of company (Fernie, and Sparks, 2014).
Major challenges Woolworths has been facing
The main challenge of Woolworth is related to redundancies of employee and organizations which result to approximately cost of $35 million. In addition to this, with the increasing ramification of economic changes and client’s inclination towards innovative and creative technologies, company may face destruction in its existing business functioning. Moreover, company might need to make restructuring of business which may cost around $766 million after tax in the group's FY2016 results. Additional problem of Woolworth is related to uncertainty of business and an associated factor which may put negative impact on introduces a restructured operating model (Fernie, and Sparks, 2014).
Factors that led Woolworth to take such decisions
With the ramified economic changes and stakeholders increasing need from the business functioning of organization, Brad Banducci evaluated that company has been struggling with the supplier relationship due to the issues of replenishment of performance and non-effective inventory system. In addition to this, company is also facing problem in implementation of new software and claimed to have problem in improvement in performance (Norton, 2015)
Use of Five porter forces model analysis
Buyer’s power- It is evaluated that Woolworth has been selling its goods and services in market and created international brand image around the globe. However, This may result to buyer’s inclination towards other organizations such as Wesfarmers, Tesco and Morrison plc (Nkirote, 2014).
Supplier’s strength- Company has planned to install restructured operating model in its value chain activities which may integrate the business with the suppliers while determining the strategic alliance with them. Therefore, after introducing restructured operating model suppliers and vendors would be more inclined toward the business setting with this company.
Rivalry with other organizations- There are several other organizations such as Wesfarmers, Tesco and Morrison plc who will be less inclined towards adopting this operating model due to its high level of cost.
Threat of new entrants- Woolworth has faced restricting cost around $766 million after tax in the group's FY2016 results while introducing new operating model in its value chain activities. Therefore, it is very hard for other companies to bear the same level of cost for installing new operating model in their value chain activities.
Substitution of product- There will be no substitute product and process which other companies could adopt to make the business rivalry with Woolworth.
Balance of power
Company has been struggling with the supplier relationship due to the issues of replenishment of performance and non-effective inventory system which may result to less effective products and services to clients. However, at the same time, buyers are more inclined towards buying products offered by Woolworth. It has resulted to high level of balance of power between purchase and supply of goods and services of Woolworth.
Impact on IT strategy
This will allow Woolworth to introduce new strategy in innovative way and systematic manner and by using new operating system IT process; employees could make effective use of financial and non-financial resources in effective manner
Pros and cons of strategic decision
Pros- Woolworth could trim its balance sheet by showing this amount as assets and. Employees could also learn new process and adopted model through training process.
Cons- It will increase the overall cost of production and employees may showcase redundancies towards adoption of operating system.
Pros- It would result to increased level of brand image and result to easy handling of value chain activities of organization.
Cons- It may result to destruction of set objectives and goals due to ramified economic growth and creative and innovative business functioning of rivals in market.
Role of IT in Woolworth
The main role of IT in Woolworth is related to establish proper level of communication method. It would also reduce the complexity of business and lower down the overall cost of organization.
Decisions of new management to write down the millions of investment in IT investment
It is highly appreciable that Brad Banducci has written down investment to adopt new IT operating model. It will reduce the complexity of business and lower down the overall cost of organization. There are several organizations such as GE capital, Wesfarmers and Coals who have done the same to increase the overall productions and efficiency of company (Barrons, 2017).
What I would do if I had been CIO of company
I would have done the same which Brad Banducci has done in Woolworth with some changes like reducing the cost of capital for installing the operating model. GE capital from multi diversified business has adopted cyber computing operating system to reduce the complexity of its business (Barrons, 2017).
However, in order to convince the top management regarding with the same, I would have prepared proper level of power point presentation with all the pros and cons. It will help them to gauge all the negative and positive points while installing new operating model.
In case, my idea would be rejected then, I will show them the practice example which other companies are using to create core competency in their filed.
Major information system
Woolworth needs to adopt customized cyber computing system as its major information system. This customized cyber computing system will help company to store, supply and establish automation in data process system. It will also result to effective level of data mining process (Wang and Tan, 2015).
Impact of slashed down project
The major impact of slashed down project of IT in Woolworth would be that in short term it will increase the overall cost of process functioning. In addition to this, company needs to write off this amount from capital account to reduce the loss of its business.
Woolworth has strong financial condition and with the help of its reserve and collected profit, company could bear the cost of newly IT operating system (Dos Santos Svensson, and Padin, 2013.).
Enlist of stakeholder with new IT system
With the help of new operating system IT process, employees could communicate with other employees and management department. Team could also use IT operating system accompanied by cyber computing system to make effective strategic business decision. In addition to this, top management and other shareholders could use IT operating system accompanied by cyber computing system to assess the business functioning of company (Fernie, and Sparks, 2014).
Functional requirement for use IT operating system accompanied by cyber computing system
- Hiring of employees who will be accustomed to act as per the directions of IT line manager.
- Setting of standard value chain activities.
- Adaption of existing value chain activities as per the newly introduce IT operating system accompanied by cyber computing system.
In this report, decisions taken by top management and factors affecting strategic decisions have been taken into consideration. If Woolworth installs this new IT operating system then it will surely increase the overall efficiency and productivity of business in long run.
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