Information Managment - Case Study Example

However, these retailing powerhouses have weaker market presence in areas where Pamida is located thus creating a competitive, first entrant and first mover advantage for the company. (Porter, 1985) ShopKo has implemented a systems application called Markdown Optimizer in order to deal with pricing of a product according to season, store location, local tastes and past demand. The software analyzes historical pricing plus sales data in order to control and price product leftovers of individual stores.

Pamida overhauled its inventory management systems in order to address product shortage from its different stores. It has implemented a full service distribution system in three warehouse locations. Initially, the company experienced setbacks and low earnings caused by the implementation of the new distribution system. This was due to a inappropriate allocation of resources where Pamida focused on new technology infrastructures and new merchandising software without modernizing their back-door operations.

The warehouse management system was old, inflexible and outdated. The functionalities and features of the software were not anymore aligned to the new business strategy and it cannot cope up with the growth of the company's demand. The company normalized its distribution operations when it has utilized and employed a better and flexible distribution system software.Results and Business Benefits The ShopKo operations have benefited a lot from the new application. The Markdown Optimizer increased the gross margin and decreased its payroll costs from the previous year.

Importantly, it has dramatically decreased the percentage of unsold goods at the end of each season. With these benefits, the net profit of ShopKo has increased. On the other hand, Pamida performed well by maintaining a high in-stock availability of merchandise through effective warehousing, efficient distribution and modernized information systems. At the end of 2001, Pamida has turned around its operational setbacks and implemented a functional full service distribution system.. They had become successful such that the company has decided to consolidate its distribution at two centers instead of three to further save on costs.

Key Learnings Information systems strategies should be aligned with the business strategy of a company. It must not focus on modernization of infrastructures alone. It is important for IS to give value to the company and compliment the business goals. As part of strategic management, information system's role in the decision making process has become very important in the organization. It functions both as support and driver of corporate strategies.(Pearlson, 2001) An effective information system needs a valuable and useful symbiosis with the rest of the management structures in an organization.

(Turban et al, 1999)Case 2: What Happened to KmartBackground Kmart was the largest discount chain in the retail industry. It was established in 1962 and has expanded to 63 stores at the end of 1963 through their introduction of discount stores.