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Strategic Information Management: 99 Cents Only Store
Introduction
Strategic information management is defined in the broad contexts as handling of information in an organization to provide value, maintain competitive advantage, and streamline core functions. Information management has become synonymous with strategic management especially in the current global village. Prosperous organizations capitalize on total quality management in all departments of organization that include information technology, participatory management, and management by objectives, business dynamics, managing business diversity and etc. (Cianciolo 2004)
The modern business is characterized by massive use of information. Development in information technology has been a major boost in the global business environment, most high performance firms use information technology as a strategic tool in establishing their competitive advantage hence ensuring sustainable enterprising environment. (99 only stores c 2006)
Key issues
In this case we are actually analyzing the extent of the effect of strategic Information management on 99 Cents, how information management has revolutionized the performance of core business activities and helps achieve and maintain its competitive power in the industry. 99 Cents is a domestic firm yet exhibits international characteristics that makes it conspicuous in the midst of its competitors. It is aggressive, ambitious and expansion oriented, this highly evidenced by the manner in which it expands into local and regional markets. (Case Study: 99 Cents Only Stores 2004)
The company remains ever competitive in the industry as per the case study and its mission remains futuristic as plans are underway to capture international markets in the next few years. 99 Cents Only Store has been able to survive in the competitive environment despite pressure from its rivals that seem to flood the market with lots of cash at their disposal mainly because of strategic information. 99 Cents Only Store adopted the use information technology into the business several years ago and the repercussion is dearly felt by its core rivals in the industry. The following is how the company has been able to realize success from its strategic information management; (99 only stores b 2006)
Warehousing inventory
The company developed a computerized warehousing system that provides staffs with an opportunity to record the levels of inventory any time a purchase in made. This has also ensured maximum inventory control. In the retail industry inventory control is a force to reckon with, there are several errors and fraud that are normally associated with manual inventory control. 99 Cents inventory control meets the international requirement for inventory control in accordance with the international Standards of accounting on inventory. (Cianciolo 2004)
Computerized ware housing inventory control has also reduced the operational costs by eliminating the cost associated with manual inventory count, security, and personnel. This has provided value and efficiency to the entire process. Computerization of activities also increases uniformity and stand ability to the products that require additional work like branding, sorting, packing, and grading before they are made available to consumers. You can actually see how the entire process is valuable to the organization. (99 only stores a 2006)
The ware housing inventory is a non-typical single price business that allows the firm to only stock close out merchandise in the system, these are products that pass once through the inventory process and therefore do not require repetitive work. Staffs are not bored and can easily concentrate in other important activities. This system is only identical with 99 Cents only Store in the entire industry and therefore makes the company more competitive in the industry for ever. (Big Problems at 99 Cents Only 2004)
Database management software
The company has developed database management software that has enabled it handle different types of data. They can store, process and dispatch information to the required destination. 99 Cents Only Stores carries out its procurement through its database software where it is able to view the ratings of different suppliers through the web and chose on the best one rather than getting tied to the usual vendor. This saved the company tens of thousands of dollars. (99 only stores a 2006)
Database management also ensures that the company maintains frequent contacts with its client to identify their needs. Client relationship is significant if an organization is to score highly in customer satisfaction and care. This means that the firm will produce products which are in accordance with clients needs and not products that will make the company to look for customers. (Big Problems at 99 Cents Only 2004)
This software has also enabled the firm to store and access sensitive data in the organization. This provides the qualitative characteristics of information required by higher level managers in the organization. These features include reliability, confidentiality, relevance, and accuracy. Any information that is devoid of the outlined quality is irrelevant for decision making. (Big Problems at 99 Cents Only 2004)
The web can also be used by customers to access the information about the company concerning, product variety, nature, availability and price. This guides clients to make informed decisions on whether to make a purchase or not. Remember that this feature is only available at 99 Cents only Store and therefore gives him advantage over its competitors. With this system a lone he can attract and lock numerous customers to his competitors detriment. (99 cents only stores d 2006)
Own programming knowledge
At a time when firms in the industry are questioning themselves on how to procure different software products 99 Cents is already boasting of its own existing expertise. The company has a legacy of housing programmers in the industry. Recently Adams who is a company employee developed in-house software with its team for the company to use. The own written software offers the following strategic advantages to the firm: (Cianciolo 2004)
If a system is developed by an employee of the firm, it will incorporate the uniqueness associated specific organizations. This means that the system is likely to be user friendly and therefore provide users with easy time in the production process. In most cases firms have always developed systems which are completely incompatible with users; in this case users will become resistant to the system. (Cianciolo 2004)
In built programs are flexible in that they can be changed to suit the changing circumstances for instances 99 Cents Only Store didnt have to change its business processes to conform to the structure of the system, the supply chain system was flexible enough to allow users to make changes by themselves and not to wait instead of relying on IT professionals or Adams himself. This also eliminates the elements of disruption hence saves time. (Brendan 2002)
Self developed programs are also cheap as compared to the bespoke; the organization does not need to spend a lot of expenditure for an expert since the firm already has such employees of that caliber. This means additional savings for the firm. In this industry its only 99 Cents Only Store where there are programming professionals, who can develop their own software. This makes this company unique in the industry as its competitors have to spend a lot of money looking for programmers or rather buy the bespoke which also have their own problems. The presence of Adams a programmer adds value to the system development and implementation. (Brendan 2002)
Supply chain software
The entire supply chain is automated and that suppliers are able to access the firms system. Products passing through process are added value from one point to the other thereby increasing their utility and value to the clients. Automated supply chain provides efficiency and effectiveness in the whole process by streamlining the identical activities and processes. (Brendan 2002)
The adoption of high jump packages absolutely addresses the hiccups inherent with such processes. Automating the supply chain in itself is a strategic tool. In the current market place luck only falls on those who are able to use information technology, maximize it benefits and thereafter look for other parties with the same interest. 99 Cents is not an exception in the industry. (Halkias 2009)
The successful use of information Systems in addressing social, ethical, and operational problems
Operational problems: these are problems that may hinder the operations of the company and include poor transport and distribution, inventory management, supply, and communication. 99 Cents has tried to address these issues by developing and strengthening its information systems as follows. (Douglas 2003)
Communication
The company has developed a database management soft ware that allows it to communicate to its clients through the web. It is this web that it uses to track the suppliers records and their industry ratings so that it decides. The presence of this web has helped 99 Cents to solve problems of poor relationship between itself and the outside parties. (Douglas 2003)
Inventory
The company has managed to solve this problem by developing an in built warehousing inventory software to provide maximum control of the inventory. In this situation the company is likely to run inadequate stocks. It has also made sure that there is enough stock for the unanticipated demand. (Supply Chain Advantage 2004)
The company also designed self made supply chain software that has streamlined all the activities in the supply chain. (Douglas 2003)
Distribution
Since this Company has several branches country wide distribution becomes a critical activity. There are already company distribution centers strategically located in places like California and a plan is in place to design another one at Texas with technical facilities as refrigeration, forklifts, cabling and furniture. This is to ensure that there is adequate stock all through in each and every branch. (Douglas 2003)
Social problems
These are problems which are associated with employees and staffs in a firm. It may also include the environment from where the company operates. However in this case study we will look at the social problems associated with employees of 99 Cents Only Store. In this particular contexts attention is devoted to the manner in which the use of information systems has addressed any social concern in this organization (99 cents only stores d 2006)
These problems may include unemployment, customer satisfaction, and culture. In this case the company has tried to solve the unemployment that is normally associated with implantation of any technology. This company is family owned and that all the family friends are employed. Already there are extended branches in other regions that require new employees. (Rae-Dupree 2004)
Culture; by involving employees in developing the organizations software programs, the company is matching the users requirements with the software. This promotes the culture of understandability. The soft ware developed will be compatible with the culture of employees and therefore there will be no confusion. (Brendan 2002)
Customer satisfaction, 99 Cents values it clients and already has developed a web for tracking the ware bouts of customers perceived to be loyal to the firm. The firm also gives discounts to its clients. (Supply Chain Advantage 2004)
Courses of action
Appropriate use of Information management that may improve performance in 99 Cents Only stores
Owing to the current global economic crisis pressure is mounting on businesses to cut cost and increase their margins. 99 Cents is not doing bad as last year it recorded the highest profit figure in the industry. How ever the question is whether it will be able to maintain its industry performance or depreciate. In its bid to increase its profit and continue being the industry leader the following is important for it future industry positioning: (Rae-Dupree 2004)
Electronic commerce: this refers to electronic exchange of data between organizations and consumers. Electronic commerce can be business to business, business to consumers and business to government. The current use of information technology has turned the world into a global village. Electronic business will provide the following benefits to 99 cents only store: (Rae-Dupree 2004)
Marketing
Online systems of businesses will increase personalized marketing to clients and the public at large. While going online the business stands to gains heavily in terms of cost. The expenditure that would have been spent as administrative costs for marketing mangers is reduced. (Supply Chain Advantage 2004)
Intermediaries
In electronic business the cost of intermediaries in the chain is eliminated since we dont need them. Online provides a channel where one can be able to communicate to clients directly. With the current economic crisis businesses are forced to downsize and customize their scales of operations in order to reduce the operational costs. (Rae-Dupree 2004)
99 Cents should adopt electronic payments methods where customers can buy and make payments through electronic systems i.e. should encourage the use of credit cards for electronic payments. This will ensure that even clients on the Diaspora buy and pay for the products of the company and hence increases market share. (Halkias 2009)
Executive summary
99 Cents has distinguished itself well in the industry by uniquely adopting the use information technology. Some of the management scholars like Peter F Drucker put forward certain theories about market positioning. He argued that a firm can adopt three strategies i.e. cost leadership, differentiation, or market focus. In this case study one clearly notes that 99 cents has adopted cost leadership and differentiation. By using big discount centers to reach its customers 99 Cents is becoming price sensitive and its therefore said to be incorporating cost leadership approach strategy in the industry.
Secondly analytical study of this company provides an insight of how the firm has positioned itself well in the industry by adopting innovative and strategic use of information technology in all levels of its critical business units. This has made it to appear totally different in terms of services and structures from its core business rivals. It is therefore apparent that the firm is using differentiation strategy.
In a competitive environment firms should adopt new ways of survival; this can explain why 99 Cents has managed to resist pressure from the industry. There are big firms with financial influences that are dealing in the same products but still 99 Cents is a head. A company may be able to exhibit tremendous financial repercussions in industry situation, but if it does not devise innovative mechanisms of presenting itself then the future can still spell doom. This is why it is significantly important that firms constantly study the environment from where they operate and then understand the needs of market both domestic and international. This will provide a basis for effective performance.
Recommendation
The way that 99 cents can continue being the industry leader is to adopt a culture of professionalism, where recruitment procedures are reviewed on a timely basis to determine whether they are meeting the company standard and where there is a deviation necessary step are taken to correct. This will ensure that different individuals joining the firm are multi-skilled, and innovative enough to make the firm continue being creative and unique in the industry.
Conclusion
Competitive strategy defines the industry position of a firm, whether the firm can be able to survive pressures from its rivals in the industry. 99 Cents Only Store has differentiated itself from other firms and established a strong strategy that is unbreakable. This has been achieved through strategic information management. Firms should be able to consider whatever options available for them to maximize the returns especially in the current credit crunch.
List of references
99 only stores a 2006, 99¢ Only Stores® Announces Preliminary Financial Results for the Quarter Ended September 30, 2006 and Delay of Form 10-Q, . Web.
99 only stores b 2006, 99¢ Only Stores® Announces an Organizational Realignment and Appoints Jim Parros Senior Vice President of Logistics, . Web.
99 only stores c 2006, 99 Cents Only Stores (NDN) Profile, . Web.
99 cents only stores d, About Us and Annual Report, Financial Summary, . Web.
Brendan, C 2002, Every penny counts. Web.
Cianciolo, M 2004, 99 Cents? That May Be Too Much, Motley Fool via Yahoo! Finance. Web.
Case Study: 99 Cents Only Stores Efficient IT Infrastructure, CIO Insight. Web.
Big Problems at 99 Cents Only, 2004; TheStreet. Web.
Douglas, M 2003 Flex Time: Finding Adaptable Software, . Web.
Halkias, M 2009, 99 cents only stores to stay open in Texas after all. Web.
Rae-Dupree, J 2004, Thinking Out Loud: Robert Adams, CIO Insight. Web.
Supply Chain Advantage: 99 Cents Only Stores Drives Expansion with Solutions from High Jump Software, a 3M Company, 2004, High Jump Software. Web.
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