Maximizing on Business Information Systems to Increase Profitability - Case Study Example

BUSINESS INFORMATION SYSTEMS By Location Business Information Systems Introduction Over the years, business enterprises have had to apply various interactive aspects with their customers as a way of influencing loyalty to their customers rather than the conventional ‘brick and mortar’ business approach. Essentially, the bricks & mortar concept began in 1992 as a way of describing a business that has a physical location for conducting its operations that may include buildings, product manufacture, and storage facilities. The idea behind this concept was the fact that a company could interact with their client base on a face-face basis in order to enhance customer satisfaction drawing from the products and services that a company may have to offer (Boddy, Boonstra &Kennedy 2008, p. 56). With this, the term contrasts the emerging trend of online stores that have no physical location that can help influence customers to buy more from the store because of the appealing nature a shop’s interior décor. However, some companies have managed to strike a balance in the application of the brick concept and that of online retailing to their advantage as this has helped in increasing customer satisfaction. One such company is Zara, which is a clothing retail company headquartered in Arteico in Spain that began operations in 1975 by Rosalia Mera and Ortega Amancio and has grown to have stores across the globe. Presently, Zara runs 1, 808 retail stores worldwide that attracts a revenues that amount to billions of pounds annually. In essence, Zara saw the opportunities that lay in incorporating physical location and technology as they could both complement one another to the advantage of a business. Zara creates an informative flow that affects efficiency in reaching the customers at the right time. With this, this report will evaluate Zara’s website and scrutinize how it may use business information systems in order for the company to achieve competitive advantage over their business rivals. Essentially, the division of the report is as follows and described after each point below: a. Zara’s aims and objectives b. The function of the organization’s website c. The kind of information gathered from Zara’s websites d. How the information gathered on websites can help a company to gain competitive advantage e. Recommendations for Zara on how to maximize on business information systems to increase profitability 1. Zara’s aims and objectives Zara’s vision is their commitment to satisfying the needs and desires of their customers by promising to avail new product designs that are from quality materials and at an affordable price. Zara’s mission statement states that the Company aims at contributing towards sustainable progress of the environment and society that Zara interacts with through its business model. One of Zara’s core aims is to ensure that fashion is accessible to all by making their products affordable at all their stores. Further, Zara’s objective is to ensure that all their designs get to their store, fast without having to use advertising as a way of informing their customers about their new products in their stores. Essentially, Zara has focused on making their stores to be their point of information access and deliver to their customers rather than them having to seek for second hand information for their new and existing products (Boddy, Boonstra &Kennedy 2008, p. 133). Another of Zara’s objectives is to be fast in responding to fashion trends as one of its core policies and also satisfying their customer demands through the application of advanced information technology. By applying these principles, Zara has managed to stay ahead of their chief competitors, which are H & M, Target, Bennetton, Patagonia, and Uniqlo, because has continued to open up stores worldwide on almost a daily basis. Ideally, all of these companies operate on a global forum, but the difference that Zara has as compared to them is that the Company has adopted a customer-centred approach that has been successful. 2. The function of the organization’s website Ideally, a website is one of the best ways in which a business can interact with their consumers without having to physically connect with them and its also an excellent way of collecting feedback from the same. Zara understands the need for operating an active website where the retail store has websites for its stores in each of the countries that they have establishments in. This means that Zara has several websites that carry out relatively the same functions that include information on new products available in their stores. In addition, the websites also provide shipping information to customers and the ways in which they can buy from their online stores with ease (William 2007, p. 217). This has made the shopping experience for their clients to be enjoyable as they can shop at convenience. Their websites also provide product information that targets different gender, age and fashion products that are in style (Boddy, Boonstra & Kennedy 2008, p. 130). Essentially, the websites allow customers to take an online tour of the products meaning that it hosts a virtual community that serves in the same manner as a brick business. Other than product information, the websites operated by Zara in different countries also tend to provide information on the Company’s ongoing promotions making them to be information centres for the customers that seek it. The websites also complement their physical stores by providing physical address information that would make it easier for consumers that may want to tour them. Their sites also provide contact information, in which customers can make further enquiries regarding the products that they have to offer and can also give feedback on their shopping experiences. This helps the company to improve on the quality of products and services in order for them to continue influencing customer satisfaction and remain relevant in the fashion retail business. 3. The kind of information gathered from Zara’s websites As per the Company’s policy, Zara collects information in two principal that are through direct means or indirectly as per the mode that customers may feel comfortable with. Essentially, the direct information gathering process may be through customers signing for newsletters through them providing their personal information and receive notification of new product availability. Further, the direct information gathering process may also require that those registered under the system also get to participate in the forums available on their sites through the posting of comments. On the other hand, the gathering of information through indirect ways may include customers, providing information through the technology available on their websites. Essentially, the websites provide information on how customers may give feedback to the Company and before they can give this information, customers have to fill forms on their sites, which helps them to gather information on gender, age among a list of other information. Therefore, Zara keeps a database of all the correspondence given on their sites as a way of understanding consumer needs and helping them to come up with ways of enhancing their satisfaction. According to a case study by the GWU School of business (2012), the number of those that visited Zara’s websites totalled thirty three million within eight months in 2010, which was before the company began online retailing in the same year. The number increased to up to fifty million visitors after the establishment of the online selling facility as captured in the same report. Zara uses the raw data captured on their sites to help in fulfilling the requests of their clients when posting newsletters making their operations to be customer centred. Further, this helps in the personalization of the client’s experience of their sites by displaying information that is relevant to the customer. The contact information gathered on the sites also help in marketing for those that agree to this policy, meaning that it is an easy way for communicating with customers that desire this service on the product lines set for release months before production begins. Lastly, these sites can also help in gathering the information made on sales of the company, which helps in understanding the product lines that are fast moving and those that customers have more interest (Boddy, Boonstra &Kennedy 2008, p. 103). This helps the company to analyse the clothing lines that customers like and the ones that are most trendy through the number of times that click on the products, which in turn helps them, decide on the products that they should stock higher. 4. How the information gathered on websites can help a company to gain competitive advantage The information collected through tables could be used and processed by a Marketing Information System (MiS) before the making of important decisions for a business. A MiS is defined by Gupta (2011, p. 82) as a system based on computers that works hand in hand with other information systems as a way to influence the solving of business problems. The MiS system could be used to perform market research which is a priority for businesses and also helps managers to make informed decisions that are likely to influence the profit levels for a business, making these to be the common uses of MiS systems (Strydom 2005, p. 80). A study by highlights that in particular, MiS’s have been shown to help organisation’s better understand customer needs and wants, and to customise marketing messages accordingly. On the website, this can be seen through the pictures posted, the availability of contact information and the having different websites for different countries in line with the customer’s wants. One of the key uses of the information gathering process for any high-growth business is that a company should use to better their customer service because when a business grows it becomes harder for it to reach out to all their customers. Ideally, the information gathering process is a way of maintaining customer relationships because customers may not remain loyal to a business despite the fact the fact that the quality of service offered is high if they do not receive proper treatment. With this, many companies have understood that customer treatment is one of the ways that can retain or lose customers. Communication with customers is key using websites can be one of the significant ways of achieving this and through other means such telephone calls or live chats on social feeds. As much as customers may respond to surveys and provide information on their service or product delivery experience, it is also critical that a company also gives feedback on possible action that they may take in order to make them feel valued. Therefore, a company responds to customer feedback with swiftness may be the most preferable to consumers because they feel appreciated and that their contribution adds value to a company. In many cases, a company may use this against their rival companies in that they may customer feedback a matter of priority rather than sitting on the concerns or information provided without it. This can also help in retaining the customers that a business may already have as compared to selling the company to a new market base, meaning that it can be a cheaper marketing alternative. The already captured customers may act as ambassadors of the company to other potential customers because them sharing their satisfied customer experience will influence others to access the services of the same. In addition, a company may use its website to gather information on their key rivals because this avenue provides anonymity in terms of responses given meaning that there is lesser fear of victimization. The surveys on a company’s website can also help the business to ascertain its market positioning as this can allow consumers to give insights on the company’s that they feel are offering better services than them. The response given can be helpful in influencing the substantial transformation that can make a company to register peak performance in terms of sales and customer satisfaction, which can edge out the competition for a business. Websites can also help a company to ascertain their strengths and weaknesses in which the responses given may influence a business on the best approaches that they can take in order for them to satisfy the demands of their customer base. A frequently asked column on a website can also be an excellent way of retaining customers as this makes it known to the customers that the company takes into account their concerns and acts on them appropriately. 5. Recommendations for Zara on how to maximize on business information systems to increase profitability As seen on Zara’s website platforms, the company tries as much as possible to make use of this tool to increase its level of interaction with their consumers, but the company has to do much in order for this process to realize ultimate results. Most of the country-based Zara websites tend to be a one-sided information delivery process in which the company does not provide a direct avenue for consumers to reach out to them. In essence, Zara should adopt a live chat facility to their websites as this would help in relaying responses to customer feedback in real-time rather than the feedback process being a time consuming affair for both the customer and the company (Boddy, Boonstra &Kennedy 2008, p. 25). This also comes with the need to have a team whose main aim would be attending to the customer traffic on the website and also connecting with customers in real time in order for their online experience with the company to be a better one. Further, Zara should increase wording on their sites because the sites consist of pictures that leave room for a lot of imagination and speculation. This means that these pictures should also provide product description such as their size and the materials that have made them in order for this information to be useful to a buyer that seeks to do so online. By providing such information, the chances of goods shipped to customers finding their way back to the store are going to be less because consumers will have all the relevant information before they make decisions on the products that they would want to buy. The site should also give details about how customers can make purchases online because they only provide information on the physical location of their retail stores. Moreover, Zara’s country-based websites should also provide linkages on other linkages and sites where customers can give and receive feedback from the company. Such sites can include the social media platforms that have gained popularity as the most preferred avenues for receiving and giving customer feedback in real time. These sites should be available on their website as a way of providing customers with a variety of choices of which platforms are convenient for them because most people may not find the newsletter effective to them. Once these aspects are in place, Zara will be able to make strides towards successful customer relations using business information systems, which would in turn influence its profit margins. Bibliography Boddy, D, Boonstra, A & Kennedy, G 2008,Managing information systems: strategy and organization, Harlow, England, Prentice Hall/Financial Times. GWU School of Business 2012, Zara Online Business Analytics Case Study, Business School Cases, Available from: http://parttimembadegree.com/business-school-cases/zara-online-business-analytics-case-study/ [27 March 2014]. Gupta, H 2011,Management information system: (an insight), New Delhi, International Book House. Strydom, J 2005, Introduction to marketing, Cape Town, South Africa, Juta. Williams, D 2007, Pro PayPal E-Commerce, New York, USA, APress. Read More