IS/IT and organisation
This report will discuss the strategic IS/IT and organisational implications of the E-commerce opportunity at Asda. I will be using Earl’s Three Pronged Model1, consisting of a Top-Down, Bottom-Up, and Inside-Out strategic analysis to evaluate Asda’s position. Also, included in this report will be a critique of Earl’s model as a model, and as a choice in this situation. Asda’s E-commerce Opportunity in the Light of Earl’s Model
The implementation of this Top-Down approach will enable Asda to obtain a mission statement for the organisation. This will provide the management with a view for the future by looking at the business needs and objectives. This leg supports management in clearly defining their own mission statement by placing Asda’s ‘business into IS’ (Earl 1989) focusing upon their own goals, objectives and customer needs. Asda’s mission statement2 is very important enabling management to clearly identify and monitor the needs of their target market. The on-line shopping strategy will improve the shopping experience for a large part of their market, and achieves their objective of good customer service. The e-commerce strategy is in place to increase their customer base, as on-line shopping is growing rapidly.
Asda’s values resolves communication barriers, it predefines a common team focus, supporting a smoother united translation from planning to implementation in reality, ensuring the customers are the team’s priority. The tactic Asda use to conduct their e-commerce strategy is through the use of in store picking methods. Until recently, they also had specialist warehouses dealing with on line orders.
The Bottom-Up leg will help Asda to evaluate its current position and capabilities, also the money, budget, and investment available for this costly project. By using audits Asda can examine their strengths and weaknesses, and improve on these elements. Also, this leg promotes research and development through the use survey methods, by looking at current performance and research on new strategies. Essentially this leg considers the users and specialists, so that an appropriate plan can be composed by the use of their feedback and suggestions.
The new store based delivery service will involve staff picking home ordered goods from the shelves of a nearby store. With this method Asda can accelerate their home shopping expansion plans without the setup costs of dedicated picking centres. The store-based system can be built up very quickly and easily, with low infrastructure costs, and will double the number of products available to order in London and the south-east.4.
Parallel running of the two systems has showed the in store method works best. However, it does have disadvantages. Goods are not stored according to optimum path or accessibility in store, but in a way that ensures that customers pass by as many goods as possible. This means that in contrast to the dedicated warehouse, a large number of personnel are required5. As stocks are on shelf, customers may find products they need are out of stock, leading to customer dissatisfaction.
Asda can identify preferences through the use of creative influences inside (encouraging internal suggestions at all levels) and outside the organisation via environmental scanning to assess customer feedback with regard to services, products and deliveries. It will aid them to examine the requirements of Asda consumers in varied locations around the country, and realise an internal need for sufficient knowledge and training.
Asda can use Benchmarking as tool, and set standards and procedures in comparison to Tesco. The success of Tesco direct is widely seen as confirmation that high street retailers can succeed in the e-commerce world by using their existing infrastructure to serve online customers. Tesco have always assembled online orders directly in local supermarkets, rather than from dedicated depots6. Asda also need to find out why Safeway, Somerfield and Budgens have all closed their in store picking systems and their online service, and also investigate how Iceland’s combination of in store picking and warehouse picking works effectively. With the help of entrepreneurs and visionaries, Asda can be more aware of possible supportive innovation and technological movement within the market.