ABC Supermarket is a major player in the UK supermarket sector. Until recently it had enjoyed a cosy relationship with its rivals in a settled market in the UK. However a new foreign rival has entered the market and is putting pressure on the established players by buying up smaller rivals and winning market share by being aggressive and dynamic in its approach to customers.
The Management of ABC Supermarket is concerned by these events and is looking at ways to protect its market share from this new threat.
Your task is to analyze the business and come up with ways of improving business performance and driving down costs, with the objective of protecting and where possible winning market share
Look at how outsourcing the IT department could provide benefits to the customers.
Create a table with Pros and Cons for outsourcing.
ABC Supermarket plays an important role in the supermarket of UK sector. Competition always exists in the business. It is the responsibility of the management of supermarket to develop efficient plan to save itself from the existing competition. Management of the ABC supermarket performing its role in an efficient manner which makes them face the existing competition easily. ABC supermarket should conduct an external analysis which is missing. With the help of external analysis, it is able to measure the potential threats existing in the environment. This enables the organization to make planning in advance so that it can easily tackle with the threat factors.
Market share is the percentage which an organization holds in the total market for its products and services. ABC supermarket can improve its business performance by focusing on innovation, smart recruitment practices, and strengthening customer relationships (Lampe, 2016). If the organization focus more on innovation, it can differentiate its products with the products of a foreign rival. Innovation enhances the quality of the existing product with which one can easily establish itself in the market and can survive for a long time. If innovation is there in the product of ABC supermarket, it can create its brand image in the mind of existing customers, and they become brand loyal. In the same way, customers are the base of any business. If they are not satisfied, one cannot survive for a long time. So, the first priority for the organization should be its customers. ABC supermarket should take various initiatives to build a long-term relationship with its customers this will enhance the popularity of the organization. If customers are happy, it can earn huge profit and able to expand itself in the growing markets.
Profit level can be enhanced through cutting down the manufacturing cost. It can be cut though minimize the wastage of products. This helps the ABC supermarket in utilizing the available product in an efficient manner. This is ultimately cut down the cost of products through which it can efficiently introduce itself in the competitive market. The effective cost of the product enables the supermarket to be the leader of the market and can easily earn a high share of the market. The supermarket can protect its market share by cutting its costs and improving its performance. The high quality of products enables the supermarket to be the leader which facilitate the high amount of market shares.
Outsourcing is known as an efficient practice through which the organizations able to bring down its cost (Willcocks, 2013) . Outsourcing IT department brings following benefits and losses for the ABC supermarket:
1. Outsourcing IT department brings specialized services for ABC supermarket through which it can gain a competitive advantage in the market (Hirschheim, 2013). 1. Outsourcing IT minimize removes direct communication between the ABC supermarket and client.
2. Reduce work burden and ABC market can focus more on penetrating another market. 2. Limited communication rises problem in developing relationship with potential customers which ultimately brings dissatisfaction between the customer and the ABC supermarket.
3. The efficient mean of enhancing cost effectiveness. 3. The limited technological capability of the ABC supermarket through which it can efficiently position itself in the market.
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Willcocks, L., & Cullen, S. (2013). Intelligent IT outsourcing. Routledge.
Hirschheim, R., Heinzl, A., & Dibbern, J. (Eds.). (2013). Information Systems Outsourcing: enduring themes, emergent patterns and future directions. Springer Science & Business Media.
Lampe, R., & Moser, P. (2016). Patent Pools, Competition, and Innovation—Evidence from 20 US Industries under the New Deal. Journal of Law, Economics, and Organization, 32(1), 1-36.