ShopKo Analytical Report

Introduction ShopKo is a purchasing agent that sells certain commercial products such as infant formulas, health supplements and luxury goods on both domestic and overseas suppliers and sellers. ShopKo is increasingly favored by consumers due to differences in national selling prices and restrictions on specific products in certain areas. The advantage of ShopKo is that it has a large number of buyers and enjoy consumer loyalty in different countries. However, due to some potential crisis, ShopKo was forced to explore and adopt a new channel to improve efficiency and a major potential crisis in the micro environment.

The information system of ShopKo and Pamida is very important to manage business well. However, the traditional information system is ineffective and does not help companies achieve business goals. The new information system supports the requirements of the enterprise and enables the company to achieve its overall goal. ShopKo uses the information system to determine the appropriate price reduction for the backlog. The traditional system will decide the price reduction price of the product based on the clearing price used in the past year. In the information system geography and culture of the region can not be incorporated into this formula, so the authorized price of the product is the same in all stores. Traditional information systems are ineffective as ShopKo loses money and its system does not help the company achieve its business goals.

The distribution center integration project is very important for both Pamida and ShopKo. One of the aims of the logistics center is to maintain Pamida stores at high inventory rates. In addition, ShopKo wants to expand the Pamida store to a small town. Logistics center is the key to achieving these management objectives. The administrative challenge is to move the distribution center of Pamida from a distribution facility to a full service facility. Organization elements include suppliers, warehouses, and individual stores. This technology includes the use of older Catalysts, international warehouse management software, and mainframe systems.

The traditional system described in this case is not very effective. ShopKo adopts an expensive, time-consuming and less useful price reduction strategy for its traditional system. Pamida's traditional system puts the company out of stock and lowers the gross profit margin. However, with ShopKo's new information system, companies can more effectively decide the price-reduction pricing strategy for each product in a particular store. This improved system helped improve gross margin, reduce wage costs, reduce the number of unsold items, and reduce wages. In the case scenario, Pamida introduces a new distribution center and ShopKo is confident of the new system. From the case scenario, the value of the system is very obvious