This week there are two questions about the TAL case study. Please answer one of the questions. Aim to bring in angles/points/evidence that others haven't yet considered.
2. If you were managing TAL's IS strategy, what would you see as the main risks moving forward? (What would you do about this?)
The main risks moving forward deal with the company needing to move away from the commodity manufacturing business and migrate up the product hierarchy.
ReplyDeleteThe risks that come with this are:
1.Cost pressures from the retail customers will be more severe than ever. There are also conflicting pressures to provide quick response time, shorter production cycle, on time performance and reduced inventory level.
2.Would the system that had provided TAL with significant differentiation in the commodity manufacturing industry be easily replicated by organisations in the apparel industry? And could this innovation be turned into a sustainable competitive advantage in the long run?
3.Would TAL choose the right strategy to move in the future with? Should they move into the wholesale business or the logistics business?
What would I do about this?
I would focus TAL on becoming a third-party logistics provider. This would take advantage of their relationship with J.C Penny. They could develop new systems in combination with J.C. Penny to provide them with a competitive advantage in this field instead of trying to compete in an industry with an information system that could potentially be easily replicated. They could also use their relationship with J.C. Penny to move towards a joint venture to manage the supply chain of the retailer’s other product lines. This would create a new sustainable revenue stream. Working with a partner that TAL has worked with before would reduce the risk of entering into the new market and it would provide support moving forward. It would also mean that with double the resources and double the manpower TAL could compete to the time, cost and performance pressures of the new industry.
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ReplyDelete