IS 501

2021-2022 Spring
Assignment #3

Part-1: Getting Social with customers

1- Considering the examples given in the article, social media technology to engage with customers
can be reflected to three dimensions of information systems as below;

Management: Brand awareness and engagement can be increased, new business models can be
established (especially for social network providers; for example, new offerings of Twitters like
“promoted tweets” or selling of user behavior data in the Facebook case), product messages can be
amplified like Lowe’s performs and even customized/improved services/products can be provided.

Organization: Social media teams can be created within the organization, conversations with the
customers can be performed to react/response immediately or to give advises. Success of the
marketing strategies, product analyzing and brand monitoring can be performed by leveraging social
media.

Technology: Social network sites like Facebook, Twitter, Snapchat, forums, blogs; features like mobile
video, image messaging, FlipSide videos, and online reviews.

2- Social media provides a lot of opportunities for advertising, brand building, market research and
customer service. Although it is not mentioned in the examples given article, local businesses who
does not have enough marketing capabilities in conventional ways, have ability to reach much more
customers and they can build their brand through social media. For the incumbent firms like cases
given in the article, social media can strengthen brand image and enhance the brand building. New
advertisement methods become available like showing usage of a product or promoting product in
social media. Market research become easier by analyzing the user behaviors/posts. Beside these
opportunities, there are also risks related to unstable environment of social media. Normally
understanding people can be crueler due to social psychology or misunderstandings can result in
unexpectedly catasrophic results for brands. Therefore, brand management becomes tougher in
social media.

3- Investigation of a faulty-climate-control part by GM on a product-owner blog yielded a business

decision to release of a technical service bulletin to all dealerships to replace the faulty equipment.

4- It actually depends on many parameters like the organizational goals, business strategy, target
customer and infrastructure -both technological and organizational. For example, businesses who
target customers older than 70 years, can invest in other communication/advertisement channels
(i.e. TV advertisements, printed newspapers…etc.) than social media. There are also some businesses
with inactive social media accounts which negatively effects the brand image. If a company does not
have technological and organizational capabilities to handle social media, it is better not to have
presence in social media due to unstable character of it. I think technology and digital firms are best
suited to use of these platforms, since customers using techs are usually active in social media, and
probability to get feedback or to engage with customer is high for this type of firms. Moreover,
products/services of these firms usually have abilities to engage social media by themselves which
can result in more personalized services.

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Part-2: Walmart and Amazon Duke It Out for E-commerce Supremacy
1- Walmart is incumbent retailer in its industry, value chain of which bases on low-profit margin with
wide range of products. It has strong supplier intimacy by maintaining long-term relationships. It has
also continuous supply replenishment chain with efficient customer response system. Value chain
activities of Walmart mainly focuses on inbound logistics, operations, sales and marketing. Amazon is
a new market entrant using mainly third-party suppliers to ship the goods to the customers directly.
Thus, it has also strong relationships with suppliers. It focuses on market niches for many of its
products and uses product differentiation. It also increases customer intimacy and switching costs
with Amazon Prime services. In addition, it has also its own products which enables product-service
differentiation. Its value chain concentrates on both inbound and outbound logistics, sales and
marketing, and service.

2- Walmart is a conventional retailer with its brick-and-mortar stores. With the rise of Amazon, it has
been forced to enter e-commerce. Amazon has actually innovated the classical retailing business
model with the opportunities of e-commerce and it has an advantage of not having brick-and-mortar
store to operate. Shipping costs of Amazon are lower than Walmart’s since the supply-chain activities
are specifically designed for e-commerce. On the other hand, Walmart has advantage of providing
customer to get goods instantly.

3- Information systems are actively used in the primary activities of value chains of both businesses.
Moreover, they have vital importance for some of the activities like inventory or supply-chain
management…etc. Beside these, Walmart is employing new services; Scan&Go, Pay with Cash, and
Shipping pass, a smartphone app feature for order list. Customers can also order online and pick up
their purchases without waiting in line at stores. Another important system Walmart uses is its
website monitors prices at other retailers and lowers its prices when needed. It is also increasing the
number of third-party retailers. Amazon has developed its own smart products which allows product-
service differentiation. It is also increasing the number of order fulfillment centers to offer same-day
delivery of purchases.

4- I think Amazon has a little more advantage over Walmart since it has already established its e-
commerce business well and can seek for further technological developments which may result in
new business models or value chains. In addition, Amazon have its own smart, digital products and
services which will gain momentum with increasing digital transformation, IoT and Industry 4.0
trends.

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