Sheng Siong like the rest of the supermarkets in Singapore is in a very highly competitive environment where they are competing with the likes of homegrown retailers like NTUC Fairprice and the others such as Shop N Save and Cold Storage. One of their strengths is Brand recognition of Sheng Siong which has spread through marketing mediums such as weekly promotions and prizes which can be won when consumers spend at Sheng Siong. Other than that strategic locating of Sheng Siong outlet is a plus point. (Thomas, 2006) However Sheng Siong has become the smallest but yet the most efficient competitor than the rest. Sheng Siong's revenue per sqm is 40% higher than NTUC (Books, 2010)Sheng Siong is leading the pack and in no time will grow beyond the likes of NTUC and the rest with their current system.
Sheng Siong has managed to obtain such an advantage due to the way their operations is done in terms of psf sales. Basically space is used as much as possible to the convenience of the store space. Space is used efficiently and in order for that to happen, operations also have a hand in it. (Xiabo, 2006) The other advantage of Sheng Siong is its pricing of its items which is relatively low and competitive prices against the rest of the competitors which are mentioned. Sheng Siong is currently using a low cost strategy in order to compete as a market leader in providing low cost and best cost to consumers. Sheng Siong is a lower cost and high value per cost is their advantage. Their strength lies in their operations which contribute to the efficient use of space churning out sales. However whether this strategy is sustainable is another question which only time will tell. In time to come this strategy may not be as welcomed as of now due to the growth of the rest of the competitors. Of course other competitors would already have realized this and maybe working on new strategies to outsmart Sheng Siong in any way. In order to sustain growth and overcome rivals Sheng Siong has to build on their current system. This can be enhanced and Sheng Siong can stand a better chance at growth than the rest with the use of Information systems.
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1.3 Technology Utilized in Wal-Mart
Walmart is a leading retail value chain in the world. Large retail stores and supermarkets such as Wal- Mart use sales data captured at the checkout or cashier counter to ascertain which items have been purchased and needs to be reordered. Wal-Mart's spontaneous replenishment system sends orders to restock directly to its suppliers. The system enables Wal-Mart to keep costs low while fine-tuning its merchandise to meet customer demands. Such system can be referred to as inter organizational information system as well. Sheng Siong can learn and implement such a system which will enhance its sales and operations capabilities to greater heights. (Don, 2005)This system was the core of Wal Marts's success which can be replicated in Sheng Siong which is not implemented by its competitors as yet. Adding onto Sheng Siong's brilliant use of space efficiently according to sales, this system will provide the cutting edge to the current system. In this way Sheng Siong which is a low cost leader will reach heights which competitors cannot reach as this system further save costs and in turn products will be cheaper. Warehouse space and usage (inventory) will be minimized due to the system and costs will be kept at bay. Responding to customer's needs becomes more efficient.
1.4 Technology Utilized in Dell
Dell is a company which dwells in computers. However Dell differentiates itself from the rest by using information systems to let consumers customize what they offer according to their needs. Consumers just needs to input the desired needs into the system which Dell will process for the consumer making them favorable to the rest of its competitors. (Steven, 2006) The same can be implemented with Sheng Siong whereby consumers can make use of the system in which they can make pre orders of the items they need. Subsequently Sheng Siong will use the data which can save time on both ends. The items needed can be prepared before customers reach the store. At the same time such a system frees up customers from roaming or browsing through the shelves of Sheng Siong. When such a system becomes popular and widely used, Sheng Siong can operate directly from its warehouses instead of having store in different locations. This saves the rental costs and other miscellaneous costs needed to operate stores. Currently only Sheng Siong has the best revenue per psf. This will further stamp out Sheng Siong's strategy in using space efficiently. The system will also enable Sheng Siong to note down buying patterns of customers which items can be stored more in order to serve customers. The system allows a customer to use the same template for their subsequent purchases making it easier for customers to make orders. Changes can be according to customers' preferences in the templates.
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1.5 Technology Utilized in 7-Eleven Store
7-Eleven Store operator introduced the retail informations systems in 2004 to all of its stores. 7-Eleven is not as big as Sheng Siong in terms of store size but they are one of the biggest franchise in the world. The introduction of information systems enables their franchises to operate efficiently and as close as possible to customers' needs. The information system was integrated with the point of sales terminals just like Wal Mart. But as 7-Eleven is a small time franchiser when compared to Wal Mart, they did not need further information comparable to those of Wal Mart. Thus a system was created just know demands of customer. The system will collate data on customers' needs. The system has pre-entered prices for the products which make it easier for the staff to handle customers more efficiently. At the same time, the system gives information on the interest of customers in new products launched through point of sales. The geographic needs of customers are also revealed via the system. The most profitable products can be established via the system as well. The system can tell what kind of goods is required by the people in that particular area and thus items can be ordered according to the demand. (Akira and Tai, 1998) Sheng Siong is currently practicing of stocking up their products and goods. But with such a system in place, again use of space can be done more wisely. Geographic needs of customers can be well served. Sheng Siong's staff can reduce human error when it comes down right to point of sales.
1.6 Technology Utilized in Marks and Spencers
Marks and Spencers are using a system which extracts information via customers credit card which will be stored in their database. Subsequently this information is retrieved by the marketing executive who studies the patterns of its customers through the credit cards utilized at the point of sales transaction. This information is used and aids the marketing staff to tailor their marketing campaigns targeted at the desired target audience according to the patterns revealed.(David 2006) Sheng Siong can replicate the same system which will further enhance the way it market its products and their brand to the desired audience.
Sheng Siong will be able to further reach out to more customers and improve their profit capability if the above mentioned systems are implemented. Sheng Siong's popularity will grow and competitors will be on their toes as Sheng Siong will lead the retail industry in Singapore. Sheng Siong's competition will be beyond local competitors and can stage themselves against international retailers but at the same time keeping their core strategy of being a low cost provider for consumers. The proposed ideas will make Sheng Siong the leader in the industry locally.
1.8 Suggestions for Sheng Siong
Sheng Siong can adapt the system practiced at Dell which is of customers customizing their own orders from home and subsequently collecting the order form the warehouse directly. This may be a breakthrough for Sheng Siong as it can operate from a single location such as its own warehouse where point of sales takes place over the net only. Customers do not have to queue for any billings and save time in getting their daily goods. On the other hand, Sheng Siong can save cost on its outlets which can be closed down. Miscellaneous payments such as utilities charges can be drastically decreased due to this. Manpower needs can be reduced as well.
2.1 Human Elements
Information systems are in place to make life easy. And as for retail industry it goes without saying. Indirectly making profit out of these systems is the main criterion which encourages companies in investing is such systems looking at the long term. Such systems give valuable information on deciding important decisions in a firm and on how the strategy can be tweaked in order to boost profit. However such systems decrease the job opportunities which are available for those in such industry. Humans can be easily replaced and one man can take on jobs of 2 to 3 people's responsibilities at the same time. This of course seems and portrays the use of information systems efficiently but intangible qualities are lost during such process. Staff manning such systems needs to be technically equipped as such systems do not remain as it is and will undergo changes in time. Training courses will shoot up and repeated training needs to be conducted if anyone new to the system steps in. Employees lose trust in the management as jobs are decreased and current employees are left jobless due to new information systems implementation. In the worst case scenarios, employers can face major protest or strikes from the workers unions who support those who are affected.
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An information system collates personal as well as general details of customers. Such information is considered as confidential but it is used by companies for more of selfish reasons such as marketing and improving the service standards. However a customer is not bothered how a company makes money but prefers to be provided with utmost service whenever he or she visits the place. Trust is built and a customer makes repeated trips to the same place. So data of customers is expected to be kept secret. But nowadays such information may not be bought over by rival companies but companies from other industries such as banking or insurance needs such quality information in obtaining new customers. Selling loans is finance industry's forte and selling insurance for insurance companies. Details of customers gets spilled out in this manner and customers nowadays refuse to furnish such personal details of themselves fearing for harassment from such industries. Thus data protection legislation is passed out to protect the interests of people.
1.3 Costs and Recovery
Information systems just like other systems are indeed vulnerable to viruses. Imagine if tons and tons of data being lost due to such attacks will lead major overhaul which is time taking and expensive. Even though a backup can be done, the cost of storing data will be costly. So this cycle can go on and on as fears of such attack will lead to companies having multiple storage for their data. But remember this data are ever growing and will continue growing requiring more space. In the extreme cases, such attacks can be fueled by competition from rival companies. In order to hinder the progress of the companies with up to date system, rivals may tend to sabotage the systems by creating virus which can destroy an entire database. Adding onto such woes will be due to disgruntled employees who feel he or she being unfairly treated by the company so plans to sabotage the company by deleting or corrupting the information leading to present information becoming redundant for any operations or survey. Other top executives of such company may want to 'steal' such information and use it for their next job which may also fall under privacy of such data.
1.4 Lack of Training
Information system do at times fail due to some technical error which cannot be rectified on the spot by the staff who is operating it. This could be due to lack of training or it needs a specialist to handle such situations. This may look like a problem which may not have major effect but consider the customers who gets delayed due to the inconvenience. Customers become unhappy and may consider from not visiting such stores with computer errors which may even over price an item picked up by a customer.
Information systems have its advantages and disadvantages. Being mentally and readily equipped for any disaster going to be caused by such systems will be wise even though its easier said than done. As for Sheng Siong , indulging themselves into sudden information systems might be too hasty as they have not used or trained themselves to be familiar with such systems. Thus ignoring such systems will proof that Sheng Siong lacks in this area so Sheng Siong can implement such systems provided they are technically prepared for the disadvantages listed above.
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