Albertson S Case Study
Albertson’s Case Study
1. Summarize of the situation
Albertsons is the third largest retail store in the United States with 2,305 stores in 31 states. Their principal goal is to trounce Wal-Mart by investing in technology to keep their current customers happy and bring in new ones. Wal-Mart incomes annually are about $56 million and Albertsons are about $20 million so we are talking about nearly triple its size in sales.
2. Questions
a. Analyze Albertsons using the value chain and competitive forces models.
CEO and president of Albertsons, Larry Johnston is using IT to be more successful by keeping prices competitive and offering the customer a better shopping experience. One of the technologies Johnston is applying to his stores is self-service checkout stations so you don’t loose time making line at the cashier, but also he is saving approximately $100 million of the payroll salaries. In terms of logistics Johnston consolidated distribution centers that are coordinated using the web to reduce cost and gain efficiency. Also, Albertsons strategy by implementing this technology is to encourage customers to buy more products that they usually do. If Johnston’s strategy works with success he would have a great success but he faces a hard opposition to change by the customers and employees.
b. What role do information systems play in Albertson’s business strategy? How do systems provide value to Albertsons?
Information systems are the most important role in Albertsons business strategy because its value relies there. They aren’t cheaper than Wal-Mart so they need to reduce costs so they can lower the prices and give customers something that the competition doesn’t have. Information systems provide value by reducing costs, more efficient warehouses and giving their customers a new shopping experience by applying technology.
c. Compare Albertsons to Wal-Mart in terms of business strategy, current success, and future success.
Albertsons
Wal-Mart
Business
1. Summarize of the situation
Albertsons is the third largest retail store in the United States with 2,305 stores in 31 states. Their principal goal is to trounce Wal-Mart by investing in technology to keep their current customers happy and bring in new ones. Wal-Mart incomes annually are about $56 million and Albertsons are about $20 million so we are talking about nearly triple its size in sales.
2. Questions
a. Analyze Albertsons using the value chain and competitive forces models.
CEO and president of Albertsons, Larry Johnston is using IT to be more successful by keeping prices competitive and offering the customer a better shopping experience. One of the technologies Johnston is applying to his stores is self-service checkout stations so you don’t loose time making line at the cashier, but also he is saving approximately $100 million of the payroll salaries. In terms of logistics Johnston consolidated distribution centers that are coordinated using the web to reduce cost and gain efficiency. Also, Albertsons strategy by implementing this technology is to encourage customers to buy more products that they usually do. If Johnston’s strategy works with success he would have a great success but he faces a hard opposition to change by the customers and employees.
b. What role do information systems play in Albertson’s business strategy? How do systems provide value to Albertsons?
Information systems are the most important role in Albertsons business strategy because its value relies there. They aren’t cheaper than Wal-Mart so they need to reduce costs so they can lower the prices and give customers something that the competition doesn’t have. Information systems provide value by reducing costs, more efficient warehouses and giving their customers a new shopping experience by applying technology.
c. Compare Albertsons to Wal-Mart in terms of business strategy, current success, and future success.
Albertsons
Wal-Mart
Business