Strategic Information System for Big W: Analysis and Recommendations

This report analyzes the external and internal environment of Big W, a discount department store chain in Australia, and recommends a suitable strategic information system to overcome challenges and increase profitability. The report includes a PESTLE analysis, Porter 5 Force analysis, and analysis of core competencies. It recommends the use of an ERP system to fulfill customer needs and gain competitive benefits in the international market.

Running head: STRATEGIC INFORMATION SYSTEM
Big w
Strategic Information System
9/21/2018

STRATEGIC INFORMATION SYSTEM 1
Table of Contents
Introduction................................................................................................................................2
Part 1..........................................................................................................................................2
External Environment............................................................................................................2
Background of Big W........................................................................................................2
Overview of Industry.........................................................................................................3
PESTLE Analysis of Big W...............................................................................................3
Porter 5 Force Analysis of Big W......................................................................................5
Competitive Environment..................................................................................................6
Opportunities and Threats..................................................................................................7
Part 2..........................................................................................................................................7
Internal Analysis....................................................................................................................7
Resources of Big W...........................................................................................................7
Capability Identification.....................................................................................................8
Core Competencies............................................................................................................8
Analysis of Core competencies..........................................................................................9
Suitable Information System............................................................................................10
Evaluation and Recommendation....................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................12

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Introduction
Strategic information systems are a set of procedures that support businesses in planning and
arranging its strategies as per the prevailing norms. The key goal of integrating strategic
information system is that allows businesspersons to evaluate the changed in the environment
and use it in a useful manner (Grant, Hackney, and Edgar, 2010). Having an efficient
strategic information system helps in defining whether the business will deal with the failure
of success. Besides this, it helps in recognizing the opportunities to utilize information
systems for strategic goals (Xu and Quaddus, 2013). In order to identify how a strategic
information system supports the business to survive for a longer duration, this report is being
prepared. For this, it is important to recognize different aspects of the market such as the
influence of the external environment and the internal environment of the business. The
report will highlight all these aspects and will suggest one of the suitable strategic
information systems support business in overcoming these issues.
Part 1
External Environment
Background of Big W
Big W is the discount department stores chain of Australia, established in 1964, at local New
South Wales. The business is the part of Woolworths Limited. As of 2015, it operated 186
stores, with approx. 22,000 workers all around Asia and Australia (Woolworths Group,
2018). Big W was developed by Woolworths Limited to offer the shoppers of Australia a
wide variety of common merchandise products in a devoted one-stop-shop. The chain of Big
W rose out of the original Variety stores of Woolworths, which supported a small variety of
common merchandise products (Big W, 2018).

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Overview of Industry
Big W belongs to the discount department store industry of Australia that has performed well
in a stimulating environment of retailing in the last five years. Operators of the industry have
attained a superior market share of the overall retail dollar at the cost of their up-market and
mid-tier competitors. Weak customer assurance has encouraged various households to reduce
their expenditure on optional purchases. Customers that are conscious of the value have
progressively chosen to buy inexpensive substitute products provided by discount department
stores. The revenue of the industry is predicted to increase annually by 2.2% over the five
years 2017-18, in order to attain $10.7 billion (IBIS World, 2018).
PESTLE Analysis of Big W
PESTLE Analysis is a tool used by the business to evaluate and monitor the macro-
environmental factors that have an influence on the business (Perera, 2017).
Political Factors
The political factors talk about the level of government interference in the economy. This can
comprise instability in the market, policies of the government, or political stability, tax
policy, environmental lax, foreign trade policy, and labor law. Political factors perform an
essential part in the long-term profitability of Big W in the market. The government of
Australia frames different policies for preventing the profitability of small retailers in the
market (Fern Fort University, 2018).
Economic Factors
Economic factors have a major influence on how the company operates its business and how
cost-effective they are in the market. The factors of Macro-environment like interest rate,
inflation rate, foreign exchange rate, savings rate, and economic cycle regulate the aggregate

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investment and demand in an economy (Fern Fort University, 2018). The decline of the
Australian market economic situations has affected the profitability of the Big W.
Social factors
Social Factors are also called socio-cultural factors that comprise the attitude and shared
belief of the population (Fern Fort University, 2018). These factors comprise age distribution,
career attitudes, population growth, and health consciousness, etc. The discount retail
industry is being influenced by the social factors in the Australian market as Big W is
performing its functions at around 186 locations, which imposes it to gain greater community
and communal development.
Technological Factors
In today’s scenario, the landscape of the technology is changing at a fast pace due to which it
influences the performance of the business in the market. The technological factors are
significantly affecting the retail industry of Australia (Fern Fort University, 2018). Therefore,
it is very essential for Big W to work on its technology updating in the market such as it lacks
in major online presence due to which its competitor like Kmart is gaining the market share.
Legal Factors
Legal factors comprise equal opportunities, consumer rights, health and safety, product
safety, and product labeling (Fern Fort University, 2018). It is very essential for a business to
comply with all the rules and regulations framed by the government in the retail sector.
Woolworths Limited the parent company of Big W is famous for obeying the legal
regulations such as implementation of carbon tax, different employment policies.
Environmental Factors
Diverse market possesses diverse regulations or standards of environment, which could
influence the organization profitability in those markets. These factors are also affecting the

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performance of Big W in the retail segment. The parent company of Big W i.e. Woolworths
is being affected by these factors because the petrol and winemaking business is increasing
adverse effects on the environment.
Porter 5 Force Analysis of Big W
Porter 5 force framework helps in recognizing and evaluating five different competitive
forces that create every industry, and support in defining the strengths and weaknesses of the
industry (Omsa, Abdullah and Jamali, 2017).
The degree of rivalry
The major players in the market like Kmart are raising high challenges in front of Big W to
increase its market share. Kmart is one of the strong players that offer its services through
retail stores and online websites, which is the weak point of Big W because it does not have
its strong presence in the online market (Lambert, 2017).
Supplier’s bargaining power
The Australia market comprises the bargaining power of suppliers from moderate to high
because there are different suppliers present in the market that offer a similar type of services
to their clients (Fern Fort University, 2018).
Customer’s bargaining power
The discount retail market of Australia includes different discount retail stores and
supermarkets that provide common products to the customers, which significantly enhance
the power of bargaining of the customers. As consumers have a wide variety, options that
eventually increase their bargaining power (Fern Fort University, 2018).

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Threat of Substitute
The daily consumption products are very important in the market, however, they do not have
any alternative that could provide the similar kind of satisfaction to the consumers, which
eventually diminish the substitute threat (Fern Fort University, 2018).
New Entrants Threat
In regards to the new entrants, it is considered to possess low threat because the large
businesses have created barriers for new players to offer their services.
Competitive Environment
The retail sector of Australia is going through interesting time, with some businesses
vigorously changing to cope up with the challenges of new entrants in the market or altering
spending habits of the customer. While the stakeholders might be observing the altering
competitive environment with the purpose that yet there are opportunities in this segment of
the market.
Strategic Group is said to be the concept utilized in strategic management that groups
business in the industry that possesses the same type of business models or same type of
strategies (MBA Skool, 2018). The Australian retail industry is comprised of different players
in the market that offer a similar type of services such as David Jones, Myer, JB-HI-FI,
Kmart, Big W, Target, etc. The top players in the industry i.e. David Jones, Mayer, and JB-
HI-FI create a strategic group in the industry. The competition among this strategic group is
high because all of them deal with the same kind of products with somewhat similar
strategies to gain the maximum market share.
David Jones is one of the top players in the retail industry of Australia offering high-quality
products to the customers. The branding of Myer offers a strategic competitive advantage to
the company over its competitors. It makes use of modern presentation, advertising strategies,

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and modern layouts to promote its services steadily to its target customers (Robertson, 2016).
JB-HI-FI another player in the strategic group offers attractive home appliances in the
market, which makes its core capability of the company. All these companies raise huge
threats in the market for Big W because they possess strong processes and capabilities that
affect the profitability and market share of the company.
Opportunities and Threats
Opportunities of Big W
There are huge opportunities present in the market for Big W to increase its revenue such as
enhancing the online store system because its competitors in the market have a strong online
presence. Besides this, it could introduce a new product or service in the market to increase
the customer base. Big W can start its small stores in the rural area to target local
communities (S&P, 2017).
Threats of Big W
As it is known that the Australia retail segment is dealing with the economic downturn, which
is negatively influencing the performance of the company due to this, its sales are also getting
down. Moreover, lack of online presence it raising another threat in form of Big W that must
be considered by the management of the company (S&P, 2017).
Part 2
Internal Analysis
Resources of Big W
Woolworths is the parent company of Big W, which possesses experienced as well as skilled
staff members. Moreover, Big W has 22,000 employees across Asia and Australia with 186
stores (Big W, 2018). This could be seen that both tangible and intangible resources of the

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company are very strong. The company offers a variety of services or products with
organized logistic management and brand image in the market.
Capability Identification
Capabilities are the skills of the business in managing its resources and allocating them to the
appropriate place to enhance productivity. The successful survival of Big W in this
competitive market reflects that it is capable enough to place its resources and human
resource at the correct place and have a thorough knowledge of the market.
Core Competencies
Brand Reputation – The reputation of the brand i.e. Big W as the discounted department
store has been created over several years. This was attained by the operative experience of the
consumers by providing products (Woolworths Group, 2018).
Top Management – Regardless of increasing pressures and increasing inflation rates, Big W
is still the competence to achieve growth at a higher rate. This is being said because the
company has skilled and experienced top management that could support in changing the
look of the business.
Supply chain – The effective distribution network of Big W is competent and an asset of the
inbound logistics. The tangible and intangible assets such as supplier relationship are highly
valuable.
Innovation – Big W also offers different and innovative products to the customers in the
market such as private labeled products.

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Analysis of Core competencies
Core Competencies Model
The core competency model focuses on the combination of precise applied knowledge,
attitude, skills, and collaborative skills. According to Hamel and Prahalad, the strategic
purposes should not be framed to fight with the competitors but on creating a new
competitive space (Hefley and Loesche, 2010).
Source [https://www.toolshero.com/strategy/core-competence-model/]
Fill in the blanks – This test talks about what competencies can be used in the existing
market. Big W can make use of its strong supply chain so that all the products can be
delivered on time to the end user.
White Spaces – Here, the company should remain close to its major offering otherwise with
the aim of offering diversified products business could lose its market share. Here, the skills
of top management are required such that they can make clear targets for the business.
Premier Plus ten – The aim of the policy is to organize fresh capabilities in the current
market in ten years. Big W could innovate something to offer something different from the
competitors that could be offered in the market for a longer duration.

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Mega Opportunities – This phase of the model talks about having high potential because the
company is moving towards new territory that is unfamiliar. Therefore, Big W could make
use of its brand reputation to establish its brand in a different country and market.
Suitable Information System
Big W is an Australian retail store that provides innovative retail and consumer products and
services to the customers. It has been analyzed from the various studies that Big W can use
ERP system to fulfill needs and requirements of the customers across the world. ERP is an
effective and unique process which helps in gaining competitive benefits in the international
market (Ifinedo, 2011). By using ERP system, Big W eliminates the repetitive processes and
minimizes the need to manually enter facts and information. Furthermore, the top
management and managers can maintain a unique and strong relationship with customers
across the world. Aside from this, ERP is easier and significant to provide excellent quality
customer service in the competitive market. It is stated that ERP system can also use to
reduce the extra cost of the products and services, which are being provided by Big W. In this
way, it is noted that ERP system can be suitable for overcoming the competitors in the global
market (Whitehouse, 2018).
Evaluation and Recommendation
ERP system can be evaluated by providing training and development coaching to the workers
at the workplace. Aside from this, the company needs to evaluate the various option that is
available within the organization before implementing the ERP system (Schiff, 2014). For
evaluating the ERP system, the company needs to provide ample resources and time for
training and development. The top management should read the ERP software reviews and
feedbacks before implementing it in the company. It is recommended that the firm should
appoint expert or professionals who have good knowledge about ERP system. These experts
will help to provide right and suitable information related to the products and services for the

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customers. Effective and dynamic HRM needs to be considered for expanding the business
widely. Leadership styles shall be used for guiding the followers towards the attainment of
objectives and goals within the organization. Apart from this, top management and managers
must keep an eye on the performance, plans, and approaches of the rivalries to stand out
against them internationally. They should invest huge amount on the promotional and
advertisement strategies to promote the products in the global market. Effective and unique
system for handling the customer grievances and complaints shall be implemented by the
company at the workplace. This system will also help to increase and enhance the level of
satisfaction of the customers.
Conclusion
From the above analysis, it could be said the Big W is dealing with huge competition in the
market that is affecting its performance as well as market share in the industry. Therefore, it
could be recommended that the company needs to increase its online presence to effectively
compete with its competitor i.e. Kmart. Besides this, it needs to adopt an information system
that is Enterprise Resource planning to reduce the time and cost comprised of planning and
offering products in the store. Moreover, an ERP system will support business in managing
all the departments of the business.

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References
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September 2018]
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eSCM-CL 1st ed. Van Haren.
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Available from https://www.news.com.au/finance/business/retail/big-w-deemed-work-in-
progress-by-woolworths-group-ceo/news-story/e9483197291eb970b7f6a30e4074ab9e
[accessed 21 September 2018]
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Available from https://www.ibisworld.com.au/industry-trends/specialised-market-research-
reports/consumer-goods-services/discount-department-stores.html [accessed 21 September
2018]

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Ifinedo, P., 2011. Examining the influences of external expertise and in-house computer/IT
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September 2018].

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Woolworths Group (2018) About Big W [online]. Available from
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