Assignment: Health club membership

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Assignment: Health club membership

Assignment: Health club membership

6. Cisco Systems has a network of component suppliers, distributors, and contract manufacturers that are linked through Cisco ’ s extranet. When a customer orders a Cisco product at its Web site, the order triggers contracts to manufacturers of printed circuit board assemblies when appropriate and alerts distributors and component suppliers. Cisco ’ s contract manu- facturers are aware of the order because they can log on to its extranet and link with Cisco ’ s own manufacturing execution systems. What are the advantages of Cisco ’ s strategic alliances? What are the risks to Cisco? To the suppliers?

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Groupon, Inc. raised $700 million at its IPO in the fall of 2011, instantly providing a valuation of almost $13 billion for a company that was only three years old at the time. Some question the value, claiming Groupon has no sustainable compet- itive advantage. Others see Groupon as an innovative company with high potential.

Groupon sells Internet coupons for events, services, and other popular items that customers might want to buy. Customers sign up for daily e‐mails targeted to their local market. The daily deal, offered for one‐day only and only if a predetermined minimum number of customers buy it, gives customers 50% off the “retail” price. For example, a $100 three‐month health club membership would sell for $50 on Groupon . The customer pays $50 to Groupon and prints a certifi cate to redeem at the health club. Groupon keeps 50% of the revenue, or $25 in this case, and gives the rest to the health club. Effectively, retailers are offering 75% off with the customer saving 50% and Groupon taking the rest.

. Some claim that the only sustainable competitive advantage for an organization is its relationships with its customers. All other advantages eventually erode. Do you agree or disagree? How can information systems play a role in maintaining the organization ’ s relationship with its customers? Defend your position.


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