Retail Value Chain Analysis

857 Words4 Pages
The North American retail ecosystem has changed dramatically over the past decade. As the retail industry has become more dynamic than ever, retailers should implement novel strategies to succeed in the next decade. As the focus of retail has moved from brick-and-mortar stores to online or mobile shopping, some predict that the extinction of brick-and-mortar stores isn’t far off. In this paper, we will evaluate the major trends impacting the retail landscape, and the strategies retailers must adopt to ride the e-commerce wave, instead of being swept away. E-commerce is short for "electronic commerce.”. Fundamentally, e-commerce refers to the purchase or sale of goods or services on electronic channels such as the internet(Rayport, 2001). The…show more content…
An effective tool to analyze the competitive advantage is Porter's Value Chain (Porter, 1985). Porter proposed a generic value chain that companies can use to analyze activities, and see how they're connected. The objective of this analysis is to determine which activities within the value chain create value for customers, which in turn creates value for the organization. By performing a detailed value chain analysis, we can truly differentiate our products in the hyper-competitive e-commerce…show more content…
At this point, it is important to introduce the concept of business-driven Management Information Systems (MIS). Business-driven MIS refers to the information systems that facilitate decision-making abilities in organizational decision making. MIS is used to use data to improve the operational performance of an organization and helps align business goals and performance. Using consumer data that is continually collected on e-commerce platforms, companies can better understand their customers, and price with more precision than brick and mortar stores, creating enormous value in the process. Further, with the advent of machine learning algorithms, companies can track customers buying habits and adjust prices accordingly, thereby uncovering true willingness to pay, and the ability to effectively price discriminate. For example, Baker et al reported that in one study an electronics company reduced four products’ prices by 7%, which increased sales from 5% to 20%

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