MIS346 MIS Strategy - Essay Example

HERE YOUR HERE HERE HERE Waste Management as IT Innovator Waste Management is recognized by the publication as being a top innovator in how business is to be conducted in modern society. This company is being recognized for its new price-optimization system that has revolutionized how it provides service and pricing structures to its many national customers. Using technology, Waste Management can now model all of the industry factors that are driving market prices in waste efforts and illustrates the different price sensitivity that customers experience in 25 different regions where the business operates.

The goal of this new use of information technology is to create a compilation of data that can better serve off-site sales representatives in providing more accurate pricing quotes to customers based on local price flexibility. In a business like this, it is long-term contracts that are the norm and therefore pricing quotes must be high enough to satisfy profit expectations but also not high enough to allow potential or existing customers to defect because of perceptions of unfair pricing. The Value Chain Framework offered by Michael Porter clearly shows the inter-linkages between all areas of the business including infrastructure, service, operations, marketing and logistics (Porter, 1).

In the case of Waste Management, the new technology data compilations targeting key demographics give a new revolution to the sales and marketing function. It is a difficult industry to promote effectively since the majority of buyers are industrial or governmental, therefore they are not often influenced by traditional consumer-based advertisements. Thus, price is usually the largest concern over whether a particular organization or industry uses Waste Management services or bids on another contract from a large competitor.

Because pricing differs with different Waste Management services in different regions, and because price quotations are vital to ensuring business success and new contract development, focusing on the sales and marketing aspect of the value chain is paramount for profit growth. This new technological system that shows key buyer trends allows the sales team to formulate a pricing structure that would best serve potential and existing clients. Since companies like Waste Management are not often privy to competing price quotations, they must be as accurate to the price sensitivity of buyers so as not to be underbid.

By using technological systems to provide quantitative data about key known trends, it assists the entire executive and sales team in identifying what price quotes would be considered fair and can still ensure profitability over the long term. Pricing directly impacts issues of logistics and distribution in the value chain and even the procurement of raw materials as they all relate to operational costs. Michael Porter shows these linkages in his Value Chain model and Waste Management’s adoption of this new beneficial technology allows the business to see all areas of cost and then include them in the new quotation system.

Costs where price sensitivity is noticed to be low can be offset by providing quotes that are higher to regions where buyers have less sensitivity in this area. Works Cited Porter, Michael. “Michael Porter Value Chain Model Framework”. Accessed October 5, 2011 from http://www.valuebasedmanagement.net/methods_porter_value_chain.html