Question

You are the owner of Smalltown Computer, a local computer repair store that also assembles custom computers to order. The company has been very successful and is growing exponentially. However, the company is having difficulty preparing for future growth. The only information system the company has is an accounting system.

1. Evaluate Smalltown Computer using the Competitive Forces model.
2. Which strategy should the company adopt in order to retain its competitive edge and why?
3. Which strategic business objective can Smalltown Computer achieve? Justify.
4. Based on the strategy and strategic business objective you selected above, which two systems (not general applications like Enterprise Systems, CRM, SCM or Knowledge Management. Be specific in your answer e.g. “inventory management system”) would you recommend for which functional area(s)? Justify your choice using the Value Chain model.

Answer 1

a. A small town Computer is a computer repair store. The competitive forces model is used to evaluate the company's competitiveness and using the information for strategy formulation. By using Competitive forces model in this company, we get the following-

1. The extent of product rivalry- The company has to analyze the total number of competitors and the extent of their product or service similarity with that of the competitors. They also have to analyze the number of consumers switching from their service to the others and the cost associated with that switching. They also have to evaluate the customer's brand loyalty regarding the services of their own and that of the competitors.

2. The threat of new entrants- The company is making its operation in the local market, so they have to evaluate the potential of entry of the new stores in that area, doing the same business. If it is more they have to offer some extra in their product or service for customer retention. It can be common that many competitors may evolve as computers are used everywhere and its repair and assembling are very much in demand.

3. Customer's bargaining attitude- If there are many competitors then the bargaining power of the customers will be high. It all depends on the total competitors and the threat of the new entrants in the same business.

4. Supplier's bargaining power- If there are very few businesses in this computer field and a huge demand by the customers then the supplier can have bargaining power. In this case, the business is doing quite well, which shows that the competitors might be less and the customers can be more.

5. Use of Supplementary products- The availability of the supplementary product also affects the company's performance. In this case, the supplementary product's availability can be that of tablets, iPhone e.t.c. If these are less the company will perform better.

b.The Smalltown computer can increase its competitive edge by providing some extra benefits like-

1. 24X7 service

2. Home service

3. Knowledgable customer care service

4. Fast delivery of the product

5. Fast-acting on repair complaints

6. Reasonable pricing

c. The strategic business objectives that can Smalltown Computer achieves are to establish a good customer dealer relationship ie. to maintain the satisfaction of the existing customers and as well as to attract new customers. It is already doing a successful business, which indicates that a lot of satisfied customers can be there and the company has to maintain and improve its services to retain and increase them.

d. Based on the strategy and strategic business objective above, two systems that I will be selecting are

1. Customer relationship management- This will help be to develop a database of the customers, with their contact numbers and also about their feedback, which is very important for my success. It will help the store to achieve the strategic objective of having a database of highly satisfied customers. I will use this for developing area related to.human resource

2. Knowledge Management system- This will be a great help to the company as well as to the customers. The employees, as well as customers, face basic knowledge problems about the operation. This system will help to sort out this problem. I will use it for developing the technological knowledge aspect of the store.