This report is mainly aimed to explore the issues or challenges related to the use of management information system that are faced by the business organisations while dealing in the international market. To study this subject, the report has undertaken Nestle Corporation as a case study organisation to explore the information management system related issues or opportunities that are face by the company in Australian market. The report in this context has provided brief background information of the Nestle and its business practices in Australia and use of information system/technology management practices by Nestle. In order to conduct the organised audit of the company’s business in Australia, the report has use a strategic analysis model named Porter’s Competitive Forces model that has provided a clear picture of Nestle’s competitive position in Australia in its related industry. Further, the report has explored the ways in which management information system can help the company to gain competitive advantage. In the end of the report, the major findings of the discussion are summarised in the form of conclusions. This report is a significant piece of information to help management of Nestle to exploit new business opportunities in Australia to win competitive position in the longer run.
Nestle is a multinational company which deals in food and beverage industry. Nestle has been performing very well in the international market in attracting consumers (Nestle, 2014). Nestle has gained greater financial capability through improving its market share and retaining improved degree of financial power. In its manufacturing process, the company uses the latest information technology systems in order to gain sustainable competitive advantage. With the help of new information system based technology, the company has gained successful position in the dynamic business environment. The business of Nestle in Australia is also very flourishing since many decades. In Australia the company serves customers through a network of sales agents. The company does follow advanced technology means in order to adapt newer technology in its research and development process. In this context, the following research mainly aims to explore existing status of information system/technology implications in Australian business environment. In this report, Porter Competitive Forces Model has been used as a strategic model in order to audit the information management system of Nestle in Australia. The report has also provided some ways through which the company can gain improved competitive advantage in Australian business environment in long run.
Exploration of Nestle Australia Business and Use of Information System/Technology Management
Nestle took decision to set up its business in Australia in the year 1908, when it became the second largest export market of Nestle in the year 1906. In this way Nestle initiated its local production in Australian market (Nestle Australia and UK, 2014). In order to understand the business conditions of Australian market, Nestle operates its business in Australia through having collaboration with nutrition department of the Australian Institute of Sports.
Audit of Management Information System
Management information system pursued by a business organisation can be considered as one of the major measure of achieving some intensive amount of success in the long term perspective. In the context of Nestle Australia also, the role and significance of the system can be justified. For the purpose of revelling viability of existing Management Information system employed by the company, Porter’s five competitive force model can be taken into consideration. In regard to this model, the viability of existing system can be revealed with the help of five different crucial competitive forces. For Nestle Australia the auditing of the existing Management Information system can be presented in terms of Porter’s five forces Model.
Bargaining power of customers
Bargaining Power of Suppliers
High bargaining power of suppliers of raw material can also be regarded as one of the most critical features of the market of Australia for Nestle. The country operates in the global market with more than 555000 suppliers. In the Australian market also, the company is having a large pool of suppliers. Earlier, the prime issue faced by the company is related with the integration of different suppliers across the globes. In this regard, the existing database of the company was not quite effective. About 9 million records of vendors and suppliers of the company were become corrupted and obsolete (Gooderham and Grøogaard 2013). However, in existing period of time, the company has started to manage its supplier base with the help of newly installed SAP software (Knolmayer et al 2009).
Threat of New Entrants
From the perspective new entrants also, the market of Australia can be considered quite challenging for Nestle. In the country, the entry barriers for the industry are not quite high which provides a significant amount of threats for the company. In regard to this threat, the IT system of the company requires more improvement. Frequent entry of new entrants can be considered quite problematic for the company as new companies bring new technologies with them. For the purpose of countering new technological system of new entrant, business organization requires frequent updation and advancement of the system. In this regard, the existing system of the company is not effective enough that can be able to update itself automatically (Gooderham and Grøogaard 2013). Owing to this reason, the company requires to undertake some modification in its existing system.
Threat of substitutes
High availability of substitute products of Nestle can also be recognised as one of the crucial competitive force for the company that can affect the viability and profitability of the product in the Australian market. In order to counter this threat, it is essential for the management to have comprehensive information related to the entire marketplace. In context to this requirement, there is a need of highly responsive and integrated Management Information system that can be regarded as means of collecting information other industries and its products also so that information regarding substitute can be revealed. In direction to this, existing MIS of the company also requires some integrity with other related products and industry so that comprehensive views to the management can be delivered (Knolmayer et al 2009).
The last but not the least competitive force for the company in the Australian market as per Porter’s competitive force model is competitive rivalry. In the Australian market, high degree of competition can also be considered as the prime feature of the country for the company. There are different crucial competitors operating in the market of Australia, which are making business activities tough for the company. In this regard, the existing Management Information System pursued by the company should be effective enough to trance activities of competitive firms in the market and suggest the most suitable action and strategy for the company. Recently the company has added SAP software in existing IT framework, which helps the company to maintain effective records of its close competitors (Knolmayer et al 2009). This can be regarded as one of the most crucial opportunities for the company with its new MIS.
In this way, it can be understood that there are some positive and negative aspects of MIS installed by the company for the purpose of operating in Australian marketplace.
Use of MIS System for Nestle to Gain Strategic/Competitive Advantage
With the application of the new means of management information system, the firms like Nestle can gain strategic as well as competitive advantage in long run. With the application of the management information system the company can collect updated information related to its customers as well as competitors (Oz, 2008). This information can be used by the company to make significant changes in its business strategies and strategic decisions and with such an initiative it can gain competitive advantage over rivalry firms. With the inclusion of new information system means the company can improve its operational functions and even can save billions of amounts on annual basis (Papp, 2001). The information technology means can provide the company a strong information base by using which the company can integrate its business information. In addition to this, the new information management system can be used by the company to improvise its advertising and sales promotion activities in a significant manner.
On the basis of the discussion made in the paper, it can be concluded that management information system can be considered as an important requirements for the long term success of the organisation. Effective MIS helps the company to collect some crucial information from the marketplace and use them in the most effective manner. Adequate, timely and effective information about internal and external business environment helps the company to take some effective and impactful decisions in the favour of the company. This competence serves as an intensive competitive advantage for the company. In this regard to this, presented paper has audited existing MIS installed by Nestle Australia for taking decisions and undertaking planning in the market place. As per the results of this auditing done in terms of Porter’s competitive forces, it can be reflected that in the context of managing complex relationship with suppliers and countering competitive rivalry, the existing position of MIS of Nestle can be considered quite effective and potential. In contrast to this, the existing system will require facing issues in the reference to rest of the forces, i.e. high degree of bargaining power of customers, threat of substitute and threat of new entrants.