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CASE: PETRIE ELECTRONICS

The Sources of Software

Jim Watanabe looked around his new office. He couldnt believe that he was the assistant director of information technology at Petries Electronics, his favorite consumer electronics retail store. He always bought his new DVDs and video games for his Xbox 360 at Petries. In fact, he had bought his Blu-ray player and his Xbox 360 at Petries, along with his surround sound system and his forty-inch flat-screen HD LED TV. And now he worked here, too. The employee discount was a nice perk1 of his new job, but he was also glad that his technical and people skills were finally recognized by the people at Petries. He had worked for five years at Broadway Entertainment Company as a senior systems analyst, and it was clear that he was not going to be promoted there. He was really glad he had put his rsum up on Monster.com and that now he had a bigger salary and a great job with more responsibility at Petries. Petries Electronics had started as a single electronics store in 1984 in San Diego, California. The store was started by Jacob Rosenstein in a strip mall. It was named after Rob Petrie, the TV writer played by Van in the TV show named after him. Rosenstein always liked that show. When he had grown the store to a chain of thirteen stores in the Southern California area, it was too much for Rosenstein to handle. He sold out in 1992, for a handsome profit, to the Matsutoya Corporation, a huge Japanese conglomerate that saw the chain of stores as a place to sell its many consumer electronics goods in the United States. Matsutoya aggressively expanded the chain to 218 stores nationwide by the time it sold the chain in 2002, for a handsome profit, to Sam and Harrys, a maker and seller of ice cream. Sam and Harrys was looking for a way to diversify and invest the considerable cash it had made creating and selling ice cream, with flavors named after actors and actresses, like the companys bestselling Lime Neeson and Jim Carrey-mel. Sam and Harrys brought in professional management to run the chain, and since Sam and Harrys bought it, the company added fifteen more stores, including one in Mexico and three in Canada. Even though they originally wanted to move the headquarters to their home state of Delaware, Sam and Harry decided to keep Petries headquartered in San Diego. The company had made some smart moves and had done well, Jim knew, but he also knew that competition was fierce. Petries competitors included big electronics retail chains like Best Buy. In California, Frys was a ferocious competitor. Other major players in the arena included the electronics departments of huge chains like Walmart and Target and online vendors like Amazon.com. Jim knew that part of his job in IT was to help the company grow and prosper and beat the competitionor at least survive. Just then, as Jim was trying to decide if he needed a bigger TV, Ella Whinston, the chief operations officer at Petries, walked into his office. Hows it going, Jim? Joe keeping you busy? Joe was Joe Swanson, Jims boss, the director of IT. Joe was away for the week, at a meeting in Pullman, Washington. Jim quickly pulled his feet off his desk. Hi, Ella. Oh, yeah, Joe keeps me busy. Ive got to get through the entire corporate strategic IT plan before he gets backhes going to quiz meand then theres the new help-desk training we are going to start next week. I didnt know we had a strategic IT plan, Ella teased. Anyway, what I came in here for is to give you some good news. I have decided to make you the project manager for a project that is crucial to our corporate survival. Me? Jim said. But I just got here. Who better than you? You have a different perspective, new ideas. You arent chained down by the past and by the Petries way of doing things, like the rest of us. Not that it matters, since you dont have a choice. Joe and I both agree that you are the best person for the job. So, Jim asked, whats the project about? Well, Ella began, the executive team has decided that the number one priority we have right now is to not only survive but to thrive and to prosper, and the way to do that is to develop closer relationships with our customers. The other person on the executive team, who is even more excited about this than me, is John [John Smith, the head of marketing]. We want to attract new customers, like all of our competitors. But also like our competitors, we want to keep our customers for life, kind of like a frequent flier program, but better. Better for us and for our loyal customers. And we want to reward most the customers who spend the most. We are calling the project No Customer Escapes. I hope thats only an internal name, Jim joked. Seriously, I can see how something like this would be good for Petries, and I can see how IT would play an important, no, crucial role in making something like this happen. OK, then, lets get started.

Case Questions # How do information systems projects get started in organizations?

# How are organizational information systems related to company strategy? How does strategy affect the information systems a company develops and uses?

# Research customer loyalty programs in retail firms. How common are they? What are their primary features?

# What do you think Jims next step would be? Why?

# Why would a systems analyst new to a company be a good choice to lead an important systems development effort?