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Retailing Industry - Essay Example

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The paper discusses the differences between the use of IT by large and small companies. It would be wrong, however, to compare the companies from different industries; therefore a retailing industry was chosen to illustrate distinctions and similarities of large and small companies…
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Retailing Industry
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"Retailing Industry"

Download file to see previous pages The aim of the paper is to present findings of previous researchers in a structured form, which will to draw further conclusion or will make it able to predict a general trend. New outcomes of the paper come from the analysis of those findings and result in the connection between the emergence of born global companies and the extensive use of IT strategies by small companies. Additionally the situation with SMEs' integration into e-business presents interest for the development of national economies: the paper indicates weaknesses in the current IT development of SMEs.
The development of information technologies (IT) has stretched the horizons for almost every business. Small companies have got the opportunity to open themselves to the world, large companies have used their chance to strengthen their competitive advantage through the use of increasing their internal effectiveness with the help of IT solutions.
The paper is set in the context of retailing industry, which implies a small buyer power, fierce competition, and most importantly the urgent need for diversification. Due to the fact that retail companies have developed in similar ways during the past century, they offer the same services to customers. The only way to get a company out of this dullness is to diversify itself. Diversification is extremely important for both large and small companies in retailing industry.
Previous researches of Miller (2000), Rossi and Tuunainen (2002), and Evaristo and Kaarst-Brown (2004) have observed the changes made by IT in large and small retailers' strategies and infrastructure (Section 3 and 2 correspondingly), while the framework of Brown, Seltsikas, and Tailor (2003) devotes much attention to issues of outsourcing (Section 5). Rapid internationalization of small-to-medium enterprise (SME) also presents academic interest: papers of Malhotra (2000), and Abbot and Stone (2003) concentrate on the difference of development of large and small firms in the context of IT implementation (Section 4).
Differences in the use of large and small businesses are seen most vividly in the infrastructure and strategy of companies. Smaller companies seek for strategies and IT tools that will help them to seize new business opportunities (Miller, 2000), while large retailers use IT solutions to enhance their internal effectiveness (Rossi, Tuunainen, 2002). The next section starts with a detailed comparison of the internal infrastructure of large and small retailers.


2.1 Differences in the internal infrastructure
Internal infrastructure ensures the flow of information inside the company (e.g. from one department to another). It is the most 'invisible' part of companies' operations from the customer's perspective, and at the same time internal effectiveness is vital for both large and small businesses. That is why the implementation of IT in the internal infrastructure is a common practice in retail businesses regardless of their size. Even the smallest companies, which do not make the Internet their first priority, use information systems (IS) for quick and easy access to prices, inventory and delivery times to follow through with customers' requirement (Miller, 2000). IS can enhance the internal infr ...Download file to see next pagesRead More
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