1. What competitive strategy are the credit card companies pursuing? How do information systems support that strategy? The competitive strategy that the credit card companies are pursuing is product differentiation and customer and supplier intimacy. Product differentiation – we make use of IS in order to create new product and services at the lower cost. According to the case, the credit card companies are making use of the data to track down various buying habits and create new services in terms of promotions. For example, the credit card company can create new promotions on air tickets when they target individuals who have frequent habits of travelling via airplanes for personal and other business trips.The use of IS makes the credit card company track down these habits more accurately. Customer and supplier intimacy- By using IS, the credit card companies create enhanced and accurate customer’s portfolio and profile which help them to improve their relationship with the customers. These companies can also identify their credit-worthy cardholders and establish better connections with the clients. With good relationship and good customer loyalty, the chances that the customer will pay their debt on time is quite high. 2. What are the business benefits of analyzing customer purchase data and constructing behavioral profiles? The following are the business benefits of analyzing customer purchase data are the following: 1. The company stores the customer’s information in the repository and with the use of data mining and other business intelligence, the company can find the hidden patterns such as what are the buying habits of the customers, what is the payment habit of the customer, does the customer pay the debt on time or is there any freudism involved. Once the company have all these information from analysing, the company can perform better decision making. The company can decide what promotion to
1. What competitive strategy are the credit card companies pursuing? How do information systems support that strategy? The competitive strategy that the credit card companies are pursuing is product differentiation and customer and supplier intimacy. Product differentiation – we make use of IS in order to create new product and services at the lower cost. According to the case, the credit card companies are making use of the data to track down various buying habits and create new services in terms of promotions. For example, the credit card company can create new promotions on air tickets when they target individuals who have frequent habits of travelling via airplanes for personal and other business trips.The use of IS makes the credit card company track down these habits more accurately. Customer and supplier intimacy- By using IS, the credit card companies create enhanced and accurate customer’s portfolio and profile which help them to improve their relationship with the customers. These companies can also identify their credit-worthy cardholders and establish better connections with the clients. With good relationship and good customer loyalty, the chances that the customer will pay their debt on time is quite high. 2. What are the business benefits of analyzing customer purchase data and constructing behavioral profiles? The following are the business benefits of analyzing customer purchase data are the following: 1. The company stores the customer’s information in the repository and with the use of data mining and other business intelligence, the company can find the hidden patterns such as what are the buying habits of the customers, what is the payment habit of the customer, does the customer pay the debt on time or is there any freudism involved. Once the company have all these information from analysing, the company can perform better decision making. The company can decide what promotion to