The Business Analysis of an IS Implementation into Mathews Corporation - Case Study Example

Table of Contents Introduction 3 Task 3 Structure of the industry 3 What are the key processes 5 What is the basis of competition 9 From where are change innovations coming 9 What goals did the organization have 10 What was their strategy - and do you think it was effective 10 Task 2: 11 Examine business, firm and industry value chains 11 Task 3 14 Risks 14 Task 4 16 Task 6 17 Strategic advantage gained with the use of CRM tools and techniques 17 Conclusion 22 Mathew's Corporation Introduction In this report I will present case study analysis of the Mathew's Corporation regarding the business analysis of an IS implementation. I will talk about the implementation of an ERP Information System and then its impacts (both positive and negative) on the overall Mathew Corporation's business. Introduction to business: First of all I will discuss the Matthews Inc. Systems and business, basically Mathew Corporation was founded in 1923 and is a leader in high-performance labels, signs, and related industrial safety products. It manufactures ultra-thin recognition labels for handheld electronic devices. One more labels it produces shields electronic devices by dispersing their temperature or static. A number of labels work in temperatures colder than 50 below zero, others burn or produce sounds in the dark, cover themselves, or still stick to oily or greasy products. So this is the little introduction regarding the company business and production. Task 1 Structure of the industry What are the key functions The key function carry out by company is to run 30 business units and manufacture and distributes its labels from 35 locations in 15 countries on five continents around the world. There are a lot of countries where this company supplies its products. The basic function of the company is to produce the high-performance labels and related industrial safety products. Mathew Corporation have following process in the their business cycle New production system Scheduling system Availability system Purchase of raw materials system Manufacturing process system Product reporting system Delivery system In this system Mathew Corporation takes the order both in the manual and electronic (internet) methods. Then there is prices discussion and dealing on the specific produced. All these functions are functioning good but not efficiently. There is need of total automation of the whole order processing, information management, and strategic decision making system. The domestic market is in a mature stage, while the international market is in the rapid-growth stage. The signs, labels and safe product industry's curve is flatter, showing slow in growth and can be considered to be in the stage of expansion. The signs, labels and safe product industry's sales is expanding and continuously gaining profit from their cash cow products. In this life cycle of the industry, there are some late entrants and are trying to put all efforts to have a share in the market. The leading company in the industry like Mathew's Corporation is separating their product from other lower-cost offering in order to increase volume of sales and gain profits. What are the key processes At present the company is running many processes like order processing, online information management, and new production catalog management. There are 19 separate databases; each comprises its own file servers and transaction software. And these systems could not communicate with each other. Every database unit had its own sales tracking system, reasoning misunderstanding among Matthews' employees and customers. These systems are developed to handle company's different type of product and management system. What are some of the competitive forces at work Being conscious of the activities of the competitors of Mathews Corporation will analyze the possible opportunities of every ventures of their company through differentiating their products and services against their rivals, considering the aspects that indirectly and directly influence and affect the entire operations that throws in competitiveness of the whole industry. It is essential to examine and critically evaluate the specific groups or individuals that manage parts or operations that are significant to the business activities of Mathews and to realistically observe possible profitability, opportunity and risk according to the five key aspects within the industry in order to identify the long term gain of Mathew's market and their market segment. Porter's Five Forces Model Competitive rivalry: Very strong The strongest and the most essential part of the five forces model of Porter is rivalry. In this model, the existence of Mathew's Corporation and its competitor and their economic profits is shown. The level of rivalry in the label, signs and safety products industry is high. This is because of the presence of some competing firms of same sizes. Additionally, the level of rivalry rises because of the inadequacy in the differentiation of the products and services in the industry. As other companies also offer labels, signs and safety products, the level of rivalry will naturally rise. The firms operating inside the industry are all very aggressive in creating new advances and moves in order to increase their profits and share in the market because of the following factors: The local demand is increasing slowly Rivals usually depend on price cuts to enhance volume Low control costs for clients. Threat of Entry: Relatively Weak The threat of entrants is intertwined with the barriers of entry because barriers of entry can maximize and minimize the opportunities of new companies offering products like what Mathew's Corporation is offering that could compete in the industry. Normally, the threat on entrants will be low because of the low risks in the potential market share where Mathew's is operating. For this industry, the entrant factor is considered low because of the following reasons: The Economies of scale permits safeguarding of margins in the industry during cuts in prices The industry has relatively unattractive market with slow expansion Rival companies are working to establish brand loyalty by creating new products and at the same time enhance their efficiency, and develop service. The present competitors have gained knowledge in marketing and efficiency. Competition from Substitutes: Very Strong As mentioned above, the label, signs and safety products industry is very competitive, companies are operating in a very aggressive business environment where some major firms are manufacturing and offering same products and services. Moreover, the companies have the same target consumers. The market then has some selection of products to choose from creating the level of substitute high for this industry: Substitutes to the labels, signs and safety products are readily accessible. Substitutes are appealingly priced Buyers think that the substitutes are good in terms of quality Bargaining Power of Suppliers: Weak The same as the buyer power, the bargaining power of the suppliers of the company within the industry is high also. The reason behind this is that the supplier concentration for the products is low. Mathew's Corporation can deal with other suppliers in manufacturing their products. Since Mathew's is at the multi-national level, there are other suppliers that will be very eager to supply the raw materials to Mathew's/ On the other hand, Mathew's always maintain strong and beneficial relationship with their suppliers because this is very important as those with its consumers. The raw materials will affect the standard or quality of their products, it is vital that the company abstain from switching from one supplier to another: No signs of collaboration of supplier-seller in the industry Mathew's products are all considered commodities. Industry leaders like Mathew's are the major clients of the suppliers. Bargaining Power of Buyers: Moderate to strong Based on the annual report of Mathew's Corporation, consumers establish their bargaining power that depends on how much they can coerce their demands on margins and volumes. Consumers usually have relatively moderate to strong bargaining power in the said industry where Mathew's operates. This leads to some vital characteristics of the industry: Customers normally have moderate to strong bargaining power in the coffee shop market. This stems from some important characteristics of the market: in particular: The industry is made up of large numbers of small companies. The companies operates with high fixed costs, The products inside the defined market segments is greatly undifferentiated and can be restored by substitutes Consumers be likely to be price-sensitive, Consumers can create the product on their own if they wanted Buyers control costs are comparatively low Buyers acquire in small volumes Buyers are conscious about companies' products, prices, and costs What is the basis of competition The basis of competition is the accessibility of better online and ecommerce hold up to the customer. Nowadays there is need of less time consumption in order processing and superior online customer support and services. So the company that incorporate these qualities in there business be able to obtain the maximum share of market. From where are change innovations coming As technology advances companies using internet and their online website for the purpose to save costs on already-low profit margins and better online customer management. This also facilitates in the capturing the global market for the business. So the ecommerce is the basic innovations that necessitate business to change their old business style. Leaders of successful high-growth companies understand that innovation is what drives growth, and innovation is achieved by awesome people with a shared relentless growth attitude and shared passion for problem-solving and for turning ideas into realities. Companies that continuously innovate will create and re-invent new markets, products, services, and business models which leads to more growth. Innovation is founded on your enterprise's ability to recognize market opportunities, your internal capabilities to respond innovatively, and your knowledge base. What goals did the organization have Jennifer Martin, Matthews's CEO since 1994 has taken lot of initiatives for the betterment of the company. She has settled few goals that will increase the overall company's annual revenue. Martin aimed to have an annual revenue growth of 15 %, reaching $1 billion in sales by 2004. She desired half of all orders to approach through the website and internet facility by 2003, thus minimizing operating cost by 2 % or $10 million annually. So this was the basic aims that Jennifer Martin, Matthews's CEO has established for the company. What was their strategy - and do you think it was effective Matthews Corporation has the strategy those 44 Matthews business units worldwide to be connected with each other and its 1,400 business developments to be integrated in a sole system. Integration like this would provide the corporation an easier and more rapid production procedure. They also want to implement the globally unified price lists and distributor discounts, and corporate-wide processes for purchasing raw materials. Even with the presence of various technological innovations in the field of advertising and marketing strategies, which made it easier and faster to reach to a broader range of consumer market, there are still quite a lot of factors that have to be measured and studied to assure that the target market is reached. Advertisers and market analysts should pay attention to the characteristics and the thoughts and processes consumers adhere to. Moreover, they should keep in mind that since larger market is an obstacle in successfully carrying out a focused marketing strategy and must therefore be flexible enough Task 2: Examine business, firm and industry value chains Organizations and information systems control each other. Every business shares general characteristics that the information system is capable to improve. On the other hand, each organization has exclusive characteristics that should be taken into explanation when slotting in technology. The business should decide how the technology is incorporated and not allow the information system completely state the organizational structure. Now I will explain if IS provide greatest value to the firm and how it has the ability to make informed judgments on the application/use of IT, here I will also describe the critical awareness of the impact of IS and IT strategy within organizations. It is detrained that transform is the simply constant in the relationship connection among the information systems and organizations. As technology develops and transforms, its introduction interested in businesses needs changes in the organization's communications and the services it be able to offer to its workers, clientele, and suppliers (Kenneth, 1998). Years before information systems consisted of an enormous big computer with a small number of terminals linked to it. We have to plan a explicit time to make use of the computer IS if our corporation had one at all. All data were reserved on one machine, and in a number of respects the data were obtainable to whoever could right to use them. With the development of the new technology computers weren't connected to through internet and become easier to transfer data from one part of world to other devoid of trouble. Now it appears we have approached full circle in a number of ways: we have shared the storage and data handing out on a fundamental machine with personal computing accessible on desktops. The data are obtainable to anybody who can utilize them or has authorized right to use in the course of a network with links literally all over the globe. The transforms that have taken place in organizational computing have an effect on the business circumstances in a huge way. Greater than 40 % of the equipment investment in the previous decade has been on IS computing equipment. Businesses are discovering additional well-organized techniques to achieve tasks by means of networking, moreover inside networks or by linking to outside networks (Kenneth, 1998). This new information technology has reasoned numerous transforms in the method businesses attached to their consumers and suppliers. We will be investigative a lot of these transforms throughout this path. In the Matthews major Web based information and business management system that is named as "Web-to Workbench", allows consumers to be capable to design and order their individual signs online and the company's Website would involuntarily forward the latest order to the suitable manufacturing facility. This way of innovative production management has caused to minimize the overall order processing costs by 88 %. So this is an effect way for handling and the orders in scenario of customer order processing and as well as for the company to have an easy to handle the two-thirds of its online orders that come from new customers. The Matthews Ltd. has aimed to completely rely on the online the order processing and order processing. By implementation of this system the company will have ability to have a better estimate and order processing information. They have an automated order recording and revenue details. It provides an easy way for the day to day report generation and progress checking for the better milestone achievement management. Hence, understanding the value chains involved in producing these products and services is the best approach to building the value of the enterprise. Succesfulcompany like Mathew's based their structure according to their value chain. Mathew's needs, at the very least, to define its role in the value chains based on its unique mix of strengths and weaknesses and design its processes, supporting assets and organizational structure and decision making. It is considered that Mathew's create value for their customers by establishing a value chain within the company. When customers recognize these values as being superior to the firm's competitors, Mathew's has established competitive advantage within its marketplace. describes two broad ways in which firms can deliver this value: lower cost and differentiation. A lower cost emphasis is one where the firm can provide a good or service more efficiently than either the client or other competing firms; a differentiation emphasis is one where firms create superior value in the form of product or service quality..Mathew's application of the concept of value chain generates insights concerning how firms compete against other firms, how value is created, and whether or not firms can expect to maintain a current competitive advantage. Task 3 Risks Demonstrate clear knowledge of risk assessment, shown by the ability to clearly analyze and identify risks, in strategic terms, in the case study business There is risk in all type of business and new system implementation. Here in this section I will analyze and identify risks Matthews Ltd. business. By the implementation of their new information and online order processing lot risks have attached to there business. In this age the biggest risk or business security problem is the business information security (chan et al, 2003). In the new age of the information technology, there are many threats have been created for the organizational information. We need a security model that has the ability to manage and secure our information reserves (Chan at al, 2003). Technical administrative safety /security measures like security plans, actions and techniques are the mainly practices for the organizational information security measures. Awareness of building actions are concerned by the organizations to a significantly smaller extent, however at the same time these are evaluated as being additional effective organizational procedures than technical administrative ones (AlignKing, 2000). To tackle this risk we have implement the logical, physical, administrative, personal and information (also data) sharing security that will help the Matthews Ltd. business the have a better information security. Next main risk is the slowdown in global economic activity, that has affected the business of the not only the Matthews Ltd. but the whole world has caused by this slowdown in global economic activity. Matthews Ltd. has implemented the gigantic Information and management system by spending $25.6 million on Eclipse project. Now they are thinking that if they have done right, but they can boost their business, through better business policy implementation. Next I will talk about the adoption of new system risk. When any new system comes there is time needed for the workers to adopt that system. In case of distraction from that system, employees make mistakes those are dangerous for the overall system and business management. There is also need for better training and awareness workshops for the system handling. As in the Matthews Ltd. the sales reps found that learning the two new pieces of software was extremely difficult. There is also risk regarding the better system implementation, for example in the Matthews Ltd. the implementation of the Eclipse (IS) was first implemented in October 1999 at Worldwide-Varitronics, a plant of 250 employees in Brooklyn, Minnesota. The primary purpose of this implementation was to shake-out troubles and fix them previous to installing the systems in the other, bigger units. While the pilot was considered a victory, there were a lot of problems. For example there were huge problems in SAP data, like that delivery time errors. Customer order problems as well surfaced. For instance, one client ordered 25 cards and received 25 boxes of cards. So this type of risk also needed to handle on time by better planning and engagement of technical personals, or by outsourcing. The efficient website exaction is also necessary. So that customer feels no distraction. It is accessed that 70% of customers are leaving the ecommerce website due to complexity and site distracted feature. The same risk attached to the Matthews Ltd. website because it is noted that site's backlogs grew by 25 percent while on-time deliveries fell from 95 percent to 80 percent. Also the Variant Configuration software produced wrong prices. Many more customers called with problems or complaints. So to handle such type of risks and problems the system designers have revise the whole system design in such way that no such problem can occur in the future. Task 4 Strengths Weaknesses Opportunities Continue to release new products since the company has a huge following and a credible brand name. Find other markets through its distribution network to peddle its products. With the company's apparent economic strength in the market, merging with small competitors would be advisable. Find other markets through its distribution network the to peddle its products. Threats Improve the company's research and development to cater the needs of the consumer. Work with the country's government agencies to intensify the strictness of entry regulations in the industry. Mathew's could gain great opportunities with its better franchise relations. Long term international expansion can also be used as an advantage. Task 6 Strategic advantage gained with the use of CRM tools and techniques CRM is denoted as Customer Relationship Management. It is a procedure or technique employed to study supplementary regarding consumer's requirements, desires, needs and behaviors in order to regulate and build up stronger associations with them (Chan at al, 2003). Although the term has been invented with a development of particular software for a call center, however knowledge over the previous ten years have exposed that the utmost reimbursement could be achieved when the topic is sighted from a holistic viewpoint. Customer Relationship Management as an industrial tool provides an extremely significant idea of meeting and analyzing consumer information. Up till now simply 16 percent of respondents consideration that corporations are completely using these information; 12 percents still were not capable to declare how various consumers they have. The standard of CRM (Customer Relationship Management) is that the additional information a corporation has regarding its consumers, the better (Chan at al, 2003). CRM is the strategic procedure of recognizing attractive consumer sections, micro-segments, or entity trade on a one to one foundation and increasing integrated agendas that make the most of both values to the consumer and the duration value of consumers to the business through targeted buyer acquisition, income enhancing actions, and retention. Customer Relationship Management engages administration of the consumer association across all its interfaces with the business as a whole procedure. Fairly than considering consumer transactions on an ad-hoc foundations as, say, a make contact with a business department or a contact with service workers, it smash down the feed storage state of mind of a expected organization and shares information regarding the consumer (Chan at al, 2003). One of the troubles that exist in a lot of organizations is that a great deal data regarding clients are stored transversely a variety of fractions of the business with no knowledge of one another. CRM arrangement allows accretion and examination of all the data concerning consumers accessible anyplace in the corporation. CRM is engaged for the following two reasons 1. Customer Data Management 2. Customer Service Management Customer relationship management (CRM) It accomplished SAP functionality was not enough in equally of these areas. So Eclipse rewrote a number of of its own systems in the SAP software development language so the Matthews systems could communicate well with SAP. So I think if the company incorporates the CRM functionality for their better customer and organizational management. By means of studying the competitors, Mathew's can apply a marketing communication strategy that will clearly position its product to the target market. This aspect of marketing communication can be explained further by understanding customer relationship management. By establishing good relations with the company's customers, clear positioning of marketing communications can be attained. The implementation of customer relationship management (CRM) through the comprehensive approach can provide the company considerable competitive advantage. This aspect is very much essential to this time considering that most services or products offered by companies have certain similarities (Lowenstein, 1997). Strategy perhaps, is the most important key to the successful implementation of customer relationship management. In order to do so, company management must realize that, either directly or indirectly, the achievement of its goals contributes much to the customers' or clients' general experience with the company. Successful incorporation of people, process and technology is probably the most efficient strategy in CRM implementation. This system begins with the purposeful and dedicated alignment of the processes employed by the management. These include the planning, organizing, directing and controlling procedures, which are all geared towards the customers (Cohen and Moore, 2000). Thus, customer management relationship, also referred to as customer service management, encompasses more than the attainment of customer satisfaction. This change management is a balance between enhanced company processes and renewed objectives. In other words, customers should also feel that the companies and businesses they support and patronize give due importance, essentiality and vitality to their operations (Cohen and Moore, 2000). Marketing communication must be created to achieve specific objectives. Upon the identification of the target market, the company must then formulate the message it wants to relay to its audience. This is also called company's value proposition. The creation of the objectives of marketing communication is important so as to cause an impact or effect to the each member of the target audience in spite of the extensive communication noise (Neumann and Sumser, 2002). In a way, the identification of the objectives will help the company come up with communication methods that will it stand out or different from the rest. The consumers need to understand fully how the communication message will affect them. If it is a relevant message, and they are able to decipher its effect on them, the company will be able to successfully communicate the message. The objectives of marketing communication are interconnected with the activities the company can apply for effective communication as well as its target market. For instance, the company aims to improve and broaden its services to its customers. In order to do this, the company applied a strategy through the use of the internet. Considering that some customers are working on the field, this strategy will only work for customers who work on online environments. Hence, the company must apply a marketing communication strategy that is applicable for all targets. In addition to the consideration of the total target market, each individual must be exposed to the company's message several times so as to establish a stronger connection. This can be achieved through the use of several strategies such as the conduction of various events, online marketing, direct mail or advertising. Basically, the objectives of companies for employing marketing communication are concentrated on the enhancement of customer services, augmentation of market coverage, increased company profit or introduction of a new product or services. In order to achieve these objectives, companies apply various forms of strategies. It has not only reconfigured the way different firms do business and the way the consumers buy goods and services, but it has also become an effective instrument in transforming the value chain from manufacturers to retailers to consumers, creating a new retail distribution channel. In various countries worldwide, more and more business firms have been using e-marketing strategy in order to be competitive. From books, foods and beverages, automobiles and other products and services, various firms, irregardless of their company sizes, are trying to survive by means of e-marketing strategy. Aside from being a promotional medium, the internet is a tool for marketing communications as well. Due to its interactive nature, the internet is an efficient method used in communicating with the consumers. Hence, several companies are beginning to realize the advantages of using the internet as a tool for communication. Mathew's concentrated on designing web-related strategies and employing interactive agencies that will facilitate their development of specific company web sites as part of their integrated marketing communication strategy. There are companies however, that are effectively using the internet by incorporating their web-related strategies with the other areas of their IMC strategies. The approach now becomes integrated and more strategic. Conclusion Mathew's application of the concept of value chain generates insights concerning how firms compete against other firms, how value is created, and whether or not firms can expect to maintain a current competitive advantage. The fundamental principle is that competitive advantage of a company like Mathew's is well understood by studying the many distinct activities they implement in maintaining the sales of their products. Evaluating Mathew's value chain gave light on how the company competes through price, product differentiation, or focus strategy, the backbone of this competitive advantage, the relative strength of the competitive advantage, and whether the current advantage is sustainable. The competitive scope of Mathew's is likewise important in creating competitive advantage. The wide scope, for an instance, may permit Mathew's to develop relationships between the value, the customers and the competitors. This relationship between competitive scope and the value chain therefore provides the basis for defining more relevant business unit boundaries and allows a firm to establish organizational structure more in line with its sources of competitive advantage. At present, people, particularly those in the business arena, tend to engage themselves within the trend of rapidly growing technology so as to stay competitive. Upon surfing the internet, various companies have put up their official sites online for customers and potential consumers to view. Online or e-marketing is the latest marketing approach for any firm who wants to effectively market its products and services. In addition, e-marketing enables the company to be known worldwide since more and more people are able to access information derived from the internet. Within the business world, where competition is strict, internet marketing is one essential marketing strategy applied by most industries. Marketing is indeed a complex combination of several factors. Within the concept of effective marketing communication, an effective plan must involve clear positioning, identification of the target market, establishment of specific objectives and strategy implementation within budgetary constraints. In order to successfully apply marketing communications, companies must be able to integrate all these factors, such as the ones exemplified by Mathew's to its retailers. Bibliography Chan, Y.E., Huff, S.L., Barclay, D.W. & Copeland, D.G, 2003, Business Strategic Orientation, Information Systems Strategic Orientation, and Strategic Alignment,' Information Systems Research, 8, 2, pp. 125-150. Cohen, S. & Moore, J, 2002, 'Today's Buzzword: CRM' Public Management, 82 ,4, 10. Donthu, N. & Garcia, A., 1999, 'The Internet shopper', Journal of Advertising Research, 39 ,3, 52-58. 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