When Dell came into the market it was a high threat of substitute products or service for Sun Microsystems. Dell on the other hand had a low threat because not many other companies came out with customizable personal computers. It was easy for Dell to enter the market because it was one of the first companies to provide those products. So there was a high threat of new entrants, but now that many companies are providing customizable computers it will be more difficult for new companies to enter the market. There is a high rivalry among existing competitors in the computer market because you can only sell so many computers. Each company is after the same customer and they need to compete to get the customer’s attention.
I think that Dell had a similar impact on other computer vendors in the same server market because Dell was on of the first to come up with customizable computers so all the other vendors were hit just as hard as Sun Microsystems. Sun’s supply chain now very closely mirror’s that of Dell Computers. Both are shorter. I think it is wise to mimic a competitor relatively closely, at least in the computer field. If both companies have a shorter supply chain and can lower costs than in the eyes of the consumer quality and price are the elements being compared. This makes the competitiveness and playing field fairer. Blockbuster is now doing the same with Netflix. A customer is able to get a movie sent to the house and keep if for as long as they want with no late fees. The convenience appeals to people. Customers feel less rushed and are not throwing away hard earned money on late fees. Sun’s collection of software can be an integrated interface. The collection integrates information, provides one suite of applications, and cuts the supply chain shorter. Organizations have to be very organized in the process of getting different vendors to talk to each other. By knowing which vendors do the best work they can order from specific vendors and keep the chain running smoothly.
Sun now does customizable personal computers. They have increased efficiency in the supply chain so that the product is delivered to customers within the promised time 95 percent of the time. This greatly helps with competitive advantage because it is very difficult for companies to guarantee a delivery time. The manufacturers tap into Sun’s order-processing system and generate a customer invoice and shipping order for the customer. They also assemble, configure, and test your system before sending it directly to you. The delivery time has made the company become much more efficient. This created an information partnership with its supplier manufacturers.
Customer relationship management uses information about customers to gain insights into their needs, wants, and behaviors in order to serve them better. The Principal’s efforts are a great example because it gathers information such as age, marital status and family status, salary, and benefits about their customers. This information helps the company to advice customers on how to control their money. Information technology within Principal is both top and bottom line. The IT support fast turnaround times for transactions and is used to find information about customers. So for top line to reach new customers and offer new products that will relate those customers, and bottom like to optimize manufacturing processes and successfully process almost 1 million online transactions per day. Principal’s focus is to grow and increase market reach, product and service offerings, and expand market share. Principal’s strategy would be focus because it does so much research on its customers to offer products and services to a particular market segment. Principal focuses on customers in need of financial advice mostly for retirement and the specific advice to fit those customers.
Principal could use an ERP system just for software to organize and make their award wining information technology more efficient. I think as service offerings become more and more popular, there might be a need for a service version of ERP so the companies that do not have physical products can still gain from resource planning. If I was considering the financial services needs of a customer, I would want to know job history, real estate, education after college, driver history, and general interests.
Source: Ezine Articles – Gillian Smyth