Information systems strategy

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PART 1: INTRODUCTION

1.1 Purpose of report:

This report has been requested by Mr Frank Hedge, the CEO of Myer Department Stores- Australia. The reports purpose is to investigate and analyse the strategic role of information technology (IT) to Myer’s business, including an IT infrastructure audit. Cloud computing is evaluated, and recommendations made for its partial adoption.

1.2 Limitations:

This report is limited by the lack of IT infrastructure details provided by Myer. Assumptions were made when required, to enable completion of the report.

1.3 Scope of the report:

This report focuses on Myer and the potential use of cloud computing within its IT infrastructure. Divided into four main sections, the report covers Myer; IT infrastructure challenges; cloud computing costs/ benefits and recommendations for cloud computing adoption. It has been compiled from research literature and phone/email interviews with two Myer store managers.

1.4) Myer and its industry

Homepage URL; https://www.myer.com.au/

Myer is Australia’s largest department store group with 65 stores and approximately 14,000 employees. It is present in 25 of Australia’s top 30 retail centres and attracted 185 million customers in 2009 (Myer 2010). Myer generated net profits of $106.8 million for the first half of the 2011 financial year (AAP 2011). Myer operates across major segments of the Australian non-food retail industry as a department store chain. This industry consists of four segments; household goods, clothing & soft goods, department stores and other (eg newspapers, books) (Myer 2010). Myer competes with other department stores, discount department stores, and single store operators as well as internet retailers and direct retailers. Within the department store segment, David Jones is Myer’s main competition though the former targets a slightly higher income group (Myer 2010). Competition exists with other retailers on price, store location, product range and customer service. Additionally, consumer demand hinges on factors such as disposable income which are sensitive to macroeconomic conditions eg interest rate rise’s (Myer 2010). The industry has struggled recently, due to weak consumer confidence and increased competition from cheaper overseas internet retailers (GST free and strong Australian Dollar) (Brooks 2010).

1.5) Myers products & services:

Myer offers approximately 600 000 product lines from 800 suppliers globally including categories such as; clothing; beauty and cosmetics; electrical and homewares (Myer 2010). Myer provides additional products and services such as;

  • Myer One customer loyalty program, over 3 million members.
  • Gift cards
  • Myer corporate sales- eg corporate gifts, office fit outs, VIP nights
  • Insurance (home, contents, travel, car)
  • Bridal & gift registry
  • Myer Visa Card (Myer 2010).

1.6) Myers corporate mission& corporate structure:

‘At Myer we strive to offer customers a wide and relevant choice of brands, rewards and ideas in a way that makes them feel both welcome and inspired’, (Myer 2010, p.3). Myer’s corporate structure is shown in Figure 1.1.

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