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MBA 5908 Applied Business Informatics Exam pack
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- University Of South Africa (Unisa)
MBA 5908 Applied Business Informatics Exam pack
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NOVEMEBER 2020 PaperQuestion 1 [25 marks]
Evaluate the “Offline, Online, and Back: The Evolution of the UK Grocery
Market” case study in Laudon and Laudon (2020), 16th edition, on pp. 148–150
OR consider the “Walmart and Amazon Duke It Out for E-Commerce
Supremacy” case study in Laudon and Laudon (2018), 15th edition, on pp.
439–441. Analyse the e-business (digital business) strategy of each company,
using the Porter’s Five Forces model and the cost leadership strategy model.
What are the strengths and weaknesses of each strategy?
Question 1
Porter's Five Forces Framework is a method for analyzing competition of a business.
It draws from industrial organization (IO) economics to derive five forces that
determine the competitive intensity and, therefore, the attractiveness (or lack thereof)
of an industry in terms of its profitability. An "unattractive" industry is one in which the
effect of these five forces reduces overall profitability. The most unattractive industry
would be one approaching "pure competition", in which available profits for all firms
are driven to normal profit levels. These five forces are shown below
In business strategy, cost leadership is establishing a competitive advantage by
having the lowest cost of operation in the industry. Cost leadership is often driven by
,company efficiency, size, scale, scope and cumulative experience (learning curve). A
cost leadership strategy aims to exploit scale of production, well-defined scope and
other economies (e.g., a good purchasing approach), producing highly standardized
products, using advanced technology.
Based on Porter’s five forces model, both companies are operating in a highly
competitive environment which has many players and very low switching costs. The
threats of new entrant are low due to the economies of scale being enjoyed by both
companies. Also the high capital requirements makes increases the barriers to entry.
Suppliers have low power because there are a lot of suppliers giving Walmart and
Amazon high bargaining power. The buyers however have more bargaining power
as they have more options. The threats of substitute products are high because
technology has enabled many retailers to join the industry
Walmart’s advantage is that it is not a pure-play e-commerce retailer and that
customers want some real interaction with physical stores as well as digital. Walmart
will sell vigorously through the web and also in its physical stores, retaining its
hallmark everyday low prices and wide product assortment in both channels and
using its large network of stores as distribution points. Walmart will closely integrate
online shopping and fulfillment with its physical stores so that customers can shop
however they want, whether it’s ordering on their mobile phones for home delivery,
through in-store pickup, or by wandering down the aisles of a Walmart superstore.
Walmart is aiming to be the world’s biggest omnichannel retailer.
Amazon also on the other hand has some clear-cut advantages. Amazon has
created a recognizable and highly successful brand in online retailing. The company
has developed extensive warehousing facilities and an extremely efficient distribution
network specifically designed for web shopping. Its premium shipping service,
Amazon Prime, provides fast “free” two-day shipping at an affordable fixed annual
subscription price ($99 per year), often considered to be a weak point for online
retailers.
Interms of cost leadership, both companies have made efforts to reduce their costs
so they can charge considerably low prices. According to the Wall Street Journal ,
Amazon’s shipping costs are lower than Walmart’s, ranging from $3 to $4 per
package, while Walmart’s online shipping can run $5 to $7 per parcel. Walmart’s
, massive supply chain needs to support more than 11,000 physical stores worldwide,
which Amazon doesn’t have to worry about. Shipping costs can make a big
difference for a store like Walmart where popular purchases tend to be lowcost items
like $10 packs of underwear. It makes no sense for Walmart to create a duplicate
supply chain for e-commerce. Consumers also associate Walmart with the lowest
price, which Walmart has the flexibility to offer on any given item because of its size.
Question 2 [25 marks]
Consider the “Roche: Managing Diabetes with Big Data and Mobile Apps” case
study, pp. 451–452 in Laudon and Laudon (2020), 16th edition, OR consider the
“Roche: Managing Diabetes with Big Data and Mobile Apps” case study, pp.
481–482 in Laudon and Laudon (2018), 15th edition. How are Business Intelligence
and Business Analytics (including Big Data Analytics) being used to address the
business challenges and solve the business problems?
QUESTION 2
Business intelligence (BI) leverages software and services to transform data into
actionable insights which inform an entity’s strategic and tactical business decisions.
Big data analytics is defined as the often-complex process of analyzing big data to
uncover information that can include patterns, correlations, market trends as well as
customer behaviours which can aid entities in making informed business decisions.
This means that on a wide scale, data analytics technologies and tools avail a way
for the analysis of data sets and take away new information that could assist
companies in making informed business decisions while BI queries answer the basic
questions regarding business operations as well as performance.
The BI tools are important in accessing and analyzing data sets and presents
analytical findings in in reports, summaries, dashboards, charts as well as maps to
provide users with detailed intelligence about the state of business. This term can
also relate to a wide array of tools which provide quick and easy to digest access to
insights about an entity’s current state basing on the available data.
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