Examines the Issues of Formulating a Set of IT Objectives Aligned With Corporate Strategy - Case Study Example

?Case Examines the Issues of Formulating a Set of IT Objectives Aligned With Corporate Strategy Table of Contents 0. Key Business Objectives (KBOs)3 2.0. Competitive Forces Analysis 5 2.1. Threat of New Entrants 5 2.2. Threat of Substitutes 5 2.3. Bargaining Power of Suppliers 6 2.4. Bargaining Power of Buyers 6 2.5. Industry Rivalry 7 3.0. The Critical IT Objectives for MDCM 8 References 10 Bibliography 10 1.0. Key Business Objectives (KBOs) MDCM is evidently facing a complicated situation and scores of challenges to stand as a marketer in its business environment. Almost every sector of the organization can be observed to be inefficient and ineffective in contributing to the business growth. The financial health of the organization is highly distressing with continuous fall in the profit margin. MDCM’s marketing and sales department also lacks in contributing to the organizational growth despite fairly good human resource productivity. Further, the supply chain of the organization is not structured and organized in an effective approach which gives rise to perplexity in the workplace. Thus, the key objective of MDCM is to enhance the efficiency of these sectors in order to re-introduce business growth at this point of time (Jeffery, M. & Norton, J. F., “MDCM, Inc. (A): IT Strategy Synchronization”). It is worth mentioning that in every sector, from finance to marketing and sales along with the supply chain operations, MDCM managers are facing similar problems with the flow of information. It is also intrinsically related to the technological developments of the organization. To be specific, the finance department complains that the data which are received from other departments are behind the times and thus lack in efficiency. This requires to be renovated through appropriate IT planning, as updated data is termed to be quite effective in developing accurate forecasts of the organizational progress which further leads to the management decision-making (Jeffery, M. & Norton, J. F., “MDCM, Inc. (A): IT Strategy Synchronization”). Similarly, the marketing and sales department complains to have operational deficiency as the employees are engaged in providing extra services to the customers concerned with their accounts and online ordering. Due to this reason, the department requires a self-service technology which will provide customers with the opportunity to help them with the extra services and reduce the burden of sales staffs. This will also ensure enhanced productivity in the department. The supply chain operations were further effected by the unsystematic progression of goods purchased and delivered to the ultimate customers. Therefore, the department requires a systematic resource planning technology which will organize and simplify the entire process including the logistics outsourcing (Jeffery, M. & Norton, J. F., “MDCM, Inc. (A): IT Strategy Synchronization”). Stating precisely, the prime objective of MDCM is to introduce a highly effective IT system in the organization which will ensure efficient financial planning, better productivity in marketing and sales and an organized framework for the supply chain operations. However, the key objective of the organization at this moment is to ensure its growth and satisfying increment in shareholder value. This certainly requires an effective short-term planning from the IT department. 2.0. Competitive Forces Analysis 2.1. Threat of New Entrants MDCM has a broad network in the international market comprising of various developed and developing economies which reduces its operational cost to a great extent. This certainly provides the organization with the strength to restrict the new entrants. Moreover, the organization deals with medical products which are recognized to be strictly restricted with the legal barriers and also requires a large amount of investment. Technological support is considered to be one of the key requirements of the industry which again limits the threat of new entrants. However, the switching costs of customers tend to be higher in the industry which can act contrary to the other factors in relation to the threat of new entrants (Brown, S. L. & Et. Al., “Medical Device Epidemiology and Surveillance”). 2.2. Threat of Substitutes The quality standard of MDCM had been recognized as one of the most satisfying in the industry over the past performances. The operational framework practiced in the company allowed the customers to directly communicate with the company officials which were accumulated with other innovative services and thus played a major role in customer retention. The organization also focused on the minimization of the manufacturing costs with the intention to maintain their cost effective strategies. However, with an increasing number of market players the substitutes were also increasing which in turn fueled up the threat of substitutes in the current market situation. 2.3. Bargaining Power of Suppliers The bargaining power of suppliers is apparently high with larger number of buyers who are served by few suppliers in the industry. The organization is likely to face several challenges due to the fact. Moreover, as the suppliers’ branding strategies were quite powerful, the bargaining power of the suppliers increased to a large extent. Hence, it is quite apparent that the high bargaining power of suppliers will have an unavoidable effect on the competitive stance of MDCM. 2.4. Bargaining Power of Buyers With an increased number of market players, the customers tend to enjoy wider options which influence the switching costs of the buyers to a certain extent. Moreover, in order to increase their market potential, the market players focused on their differentiation strategies in terms of branding and costs. The aspects of quality and services also play a major role in attracting customers in the industry which in turn affects the flexibility of the organizations and thus affects the bargaining power of the buyers in the industry. To be specific, the bargaining power of buyers in the industry can be observed to be high which in turn also effects the competitive position of the organization. 2.5. Industry Rivalry The industry comprises of numerous players which are small but quite competitive. In this concern, the market players often tend to differentiate their products which in turn accelerate the competition in the industry. To be mentioned, MDCM had been once recognized as a market leader in the industry but in the current scenario, due to its ineffective operational strategies and dipping profit margin, the company is largely affected by its competitors. It becomes quite apparent that there exists a sheer industrial rivalry among the competitors without a specific market leader to control price. Therefore, MDCM has to face a major challenge in terms of competition which is chiefly influenced by the large number of smaller players which are at the same time quite competitive in product differentiation and other spheres of organizational operations. 3.0. The Critical IT Objectives for MDCM Realizing the requirement of a sophisticated IT system in the organizational operations, the leaders of MDCM had introduced Horizon 2000. It was identified as a strategic alliance adopted with the aim to refurbish the organizational growth, both in terms of competency and financial strength. The program tended to consider every aspect of the organizational operations which were likely to have an effect on the company’s well-being. It considered the inbound and outbound logistics, marketing and sales services, financial data collection and the information technology of the entire firm structure. However, the program comprised of various lacunas which in turn severely affected the organizational health (Jeffery, M. & Norton, J. F., “MDCM, Inc. (A): IT Strategy Synchronization”). It is in this regard, that the company requires to focus on the implementation of a more sophisticated and effective IT strategic alliance to ensure the organizational growth. With an in- depth perspective, it can be observed that the company lacked a well-structured flow of information which influenced the consideration of inefficient strategies. Stating specifically, the IT objectives of the organization should be strictly inclined with its competitive stance. For instance, the number of suppliers in the industry tends to be lesser than that is required. Thus, the company should intend to increase the number of suppliers in the market which will provide it with an enhanced bargaining power over the suppliers. In this regard, a sophisticated IT system can be enforced which will intend to simplify the ordering method executed in the organization. As the company depends on the external outsourcers for its outbound logistics, effective communication networks should be developed through IT implementation. The industry also reveals to have higher bargaining power enjoyed by the buyers. In order to face this challenge, MDCM needs to emphasize on its differentiation and branding strategies. Even in this case the IT development can be beneficial for the organization. The IT objective in this concern should be to improve the quality of services offered to the customers including online services and other self service opportunities. This will not only enhance the flow of information between the customers and the marketing and sales department but also reduce the burden of operational cost. The IT objectives should also be focused to deliver up-to-date data to the finance department of the company. This can be implemented through a comprehensive IT system which would allow the record of transaction on a daily basis and can be evaluated by the company officials accordingly. It is worth mentioning that the organization operates through several centers scattered worldwide which raises the constraint to comprehend the data on a regular basis. Therefore, an integrated data recording center should be developed which would enable more efficient forecasting of the financial health of MDCM. In a nutshell, the IT objectives of MDCM in the current context should be to develop an integrated accounting system to record the financial data of the company applicable in every center of the organization in order to develop a sophisticated communication network between the company’s suppliers and customers with due consideration to the outsourcers. Developing a sophisticated self-service centre can also be identified as one of the major IT objectives in MDCM. References Brown, S Lori. & Et. Al. Medical Device Epidemiology and Surveillance John Wiley and Sons, 2007. Jeffery, Mark. & Norton, Joseph F. MDCM, Inc. (A): IT Strategy Synchronization Kellogg School of Management, 2006. Bibliography Link, J. A. How to Develop and Implement Your It Strategy Troubador Publishing Ltd, 2008. Read More