Executive Summary
This paper is a business report analyzing how the New Balance company uses its information systems to be more efficient. The report utilizes previous research on the subject, analyzes a New Balance case study, and applies various theoretical concepts to explain how information systems help the company operate. The paper contains historical background on the company’s development, an overview of the utilized information systems, and the data on its interrelation with its customers. The overall findings suggest that New Balance efficiently uses its customer-oriented business model and many information systems to maintain a solid position in the market. However, the company may need to reconsider its information management to avoid ethical issues. Additionally, New Balance might be giving its potential customers the wrong impression about their goods, which is why the company may need to reconsider its advertising policy.
Introduction
Almost every production company seeks to improve its commercial benefits and raise profits, though the company may have other essential goals which may even be more significant than raising money. People within marketing organizations constantly attempt to create value for their customers – the value they would be willing to pay for because of its uniqueness, utility, and other great qualities. As it is known, the creation of the most demandable goods is always correlated with technology as it allows the market to provide new products which can replace the old ones and be more helpful. Therefore, information systems are essential in the business management process since they can help commercial firms to predict technological progress, get ahead of that, and outrun their competitors (Kronke & Boyle, 2019). The importance of information systems has increased over the years, attracting many specialists to the field which did not exist before, such as business analysts, data architects, mobile application developers, and many more. New Balance is one of the major companies implementing information systems to be more efficient in the market using a customer-oriented business model.
The History of New Balance
The company under discussion originated more than a hundred years ago by an Irish immigrant called William J. Riley. In 1906, he founded the New Balance Arch Support Company, Inc., which focused on orthopedic footwear and arch support to give its customers maximum comfort and a “new balance.” The organization further expanded its production by making sports shoes for tennis, baseball, and basketball, but the primary specialization was still orthopedic footwear. However, New Balance remained a small company of six full-time employees who made approximately 20-30 shoes per day until 1972, when Jim Davis purchased the company and decided to begin its major expansion. New Balance’s popularity started increasing, and the style of the shoes received significant societal support, which promoted the company’s development. In 2009, the company broke its hundred-year-old tradition, moving from making orthopedic footwear and concentrating more on sports shoes. Nowadays, New Balance is one of the most popular footwear manufacturers on the world market, competing with such companies as Adidas and Nike.
Information Systems within the Company
Information Systems
There are many different information systems utilized in New Balance. Firstly, the company uses an enterprise resource planning (ERP) system to divide products into various categories (Dimensional Insight, 2018). New Balance uses warehouse management and retail systems to keep track of its massive productions. Using those information systems allows the firm to organize its activity and achieve its goals by improving the two dimensions of process quality: efficiency and effectiveness (Kronke & Boyle, 2019). Improving those processes requires changing their structure and resources, which is almost impossible without proper information management.
Information Impacting Sales
The significance of information systems was illustrated in New Balance when the company lacked an effective ERP reporting system. According to Elaine Ritchie, the Information Systems Director, people always need “reports for specific accounts, products, divisions, sales reps” (Dimensional Insight, 2018, p. 2). Thus, the company now uses Diver Platform and different information systems to “monitor and manage business performance, analyze, and compare key metrics, budgets, sales goals, store traffic, and other significant elements” (Dimensional Insight, 2018).
Sales Models and Dimensions
Diver Platform is a tool for information management that helps New Balance navigate various data models and analyze the company’s areas of interest with self-sufficient data access. In other words, Diver is a database management system (DBMS) associated with creating, processing, and administering databases for the company (Kronke & Boyle, 2019). The sales department of New Balance works with different sales models and dimensions using the company’s information systems. Sales models include open orders, net sales to date, sales and returns, monthly order activity, and other indicators (Dimensional Insight, 2018). Then, sales dimensions include customer number and division, accounting period, product category and sub-category, type of account and territory, and many others (Dimensional Insight, 2018). Processing that much information involves much data, and its proper analysis may often be the key to the successful business activity of the company. Therefore, New Balance requires an efficient database management system and effective information systems to achieve organizational goals.
Using Information Systems to Satisfy Customers
Customer Relationship Management
New Balance values information much since the company has a complicated customer relationship management system (CRM), utilizing much data to satisfy their customers. According to Kronke and Boyle (2019), CRM “is a suite of applications, a database, and a set of inherent processes for managing all the interactions with the customer, from lead generation to customer service” (p. 306). New Balance’s customer base is concrete as the company aims to aid athletes in pursuing their goals while looking fashionably. The company has many different tools to advertise its goods and collect information about its customers and their preferences.
Ethical Considerations Related to Information
However, the tools for collecting information mentioned above are correlated with significant ethical issues. New Balance tracks much of its customers’ personal information through the Internet, including their IP address, the type of browser used, the domain name of the internet services provider, and other data. Although such a strategy may be effective in marketing in terms, it is, in many respects, unethical and makes New Balance’s customers feel unprotected when using the company’s website and purchasing its goods. Ethics of data and information is an essential element of professional responsibility that always comes along when someone is doing business (Kronke & Boyle, 2019). Once someone acquires another’s personal information, they become responsible for that, independent of the context. Managing that much information has to be challenging, which is why New Balance confronts an ethical issue related to its information system.
Findings and Future Direction
According to the case study analyzed and previous research on the subject, New Balance appears as a company that effectively utilizes its information systems to maintain a solid position in the market. The organization analyzes and processes data related to its business activity on many levels, implementing various tools. New Balance’s success can be explained by the company’s customer-oriented business model, which is established through a complex customer relationship management system. However, the firm confronts an ethical issue since it collects much of its customers’ personal information to achieve its goals, and many people may consider that marketing strategy unethical. New Balance’s most promising future direction appears to involve a new way of connecting with customers without violating any ethical borders.
Conclusion
Overall, New Balance effectively utilizes the acquired data since it remains one of the leading footwear manufacturers in the world market. The company has a complex management information system (MIS) which allows the organization to analyze the information on its business activity and outcomes on multiple levels. New Balance has a solid customer-oriented business model that helps the firm maintain a positive relationship with its customers, receive much feedback, and evolve to be better and attract more clients. However, the company uses much of its customers’ personal information to achieve its goals, which creates a significant ethical issue. New Balance might need to find new ways to acquire the necessary information that would not endanger their customers’ personal data, making them feel vulnerable and unprotected.
Furthermore, New Balance shows efficient internal work with information, but the organization might provide insufficient information about its activity, giving them a wrong impression. The company’s advertisements suggest its footwear is primarily for athletes, and that information may push many potential clients away. Dealing with ethical issues and changing the ways of providing information to customers may help New Balance get ahead of its competitors.
References
Dimensional Insight. (2018). Case study: New balance. Web.
Kronke, D., & Boyle, R. (2019). Using MIS (11th ed.). Pearson Education.