School of Business
Department of Management Information Systems
Interactive Session: Organizations
How Much Do Credit Card Companies Know About You?
1- The competitive strategy that the credit card companies are pursuing is product differentiation and customer and supplier intimacy. Product differentiation; make use of IS in order to create new product and services at the lower cost. According to the case, the credit card companies are making use of the data to track down various buying habits and create new services in terms of promotions. For example, the credit card company can create new promotions on air tickets when they target individuals who have frequent habits of travelling via airplanes for personal and other business trips. The use of IS makes the credit card company track down these habits more accurately. Customer and supplier intimacy; by using IS, the credit card companies create enhanced and accurate customer’s portfolio and profile which help them to improve their relationship with the customers. These companies can also identify their credit-worthy cardholders and establish better connections with the clients. With good relationship and good customer loyalty, the chances that the customer will pay their debt on time is quite high.
2- The company can store the information about the customers that are involved in credit card purchases, payments on time, and their buying habits. Once the company knows that information, they can help to build better decision making. Also, from this information, companies can know what promotion they would offer so companies will retain loyal customers and increase profit. In addition, these companies are developing more fine-grained profiles to help them get inside the heads of their customers. It provides certain types of purchases for customer’s ability or inability to pay off credit card balances.
3- These practices are...