GSLC I For BI Class (LC11) - Application Case I

My dear students (BI Class - LC11),
As the application case in your slides has been written in Bahasa Indonesia, then I post the application case with questions in English at this site: http://sisbinus.blogspot.com/2015/03/gslc-i-for-bi-class-lc11-application.html

And I also modified a little bit on the questions. Please make sure you read and answer the questions. You may answer in the comment field at the site above or you may also answer in this forum.
The deadline for posting the answers will be 23rd of march. Best answer will be awarded 10 points for mid-exams.

Thank you.

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Application Case I:

Cabela's, "the world's foremost outfitter," (Sidney, Nebraska) is the world's largest mail order distributor of products for outdoor enthusiasts. Cabela's has 6,000 employees. Every year Cabela's mails more than 60 million catalogs in 60 editions to customers across the entire United States and in 135 other countries. Cabela's also owns eight stores, an e-commerce Web site, and four telemarketing centers in the United States.

In the mid-1990s, executives needed to develop a greater understanding of their customers' behaviors, individual tastes, and purchase preferences. They needed to characterize the different segments of the company's customer base. Essentially they needed a way to cluster or group their customers to understand them, and to target market specific products to the members of each cluster (segment).

At the time, Cabela's relied on outsourced business intelligence and in-house packaged solutions to build separate mailing lists for every single catalog and promotion. This process was costly and slow. In addition, the data's integrity was called into question.

Cabela's adopted IBM's DB2 Universal Data Enterprise Edition and IBM DB2 Warehouse Manager as

its platform. Query response times are now 80 percent faster than before; maintenance time and costs have

been cut in half. The knowledge gleaned from the data warehouse has enabled the firm's marketing team to

improve catalog hit rates and has led to far-reaching improvements to printed catalogs and the e-commerce

Web site, enhancing the customer experience and boosting customer loyalty.

About 30 users (including four full-time statisticians and their staff, and senior managers) access the data warehouse with BRIO Explorer as the front-end querying and reporting tool, and SAS as the statistical analysis tool (both are OLAP tools). The warehouse contains 11 years of information stored in about 700 gigabytes.

Within a few months of deployment, sales in most market segments rose significantly. Since it has succeeded,

improvements are already underway on the OLAP side to help better understand the crucial relationships among customers, markets, products, prices, and geography—the key factors that drive the business.

By leveraging data assets with additional data management and business intelligence technologies, Cabela's

will achieve deeper and more powerful insights that will bring added value to its customers; and to the bottom line.

Questions: 

1. Describe the competitive nature of the system.
2. Describe how OLAP tools could help Cabela's do even better than it is doing with the system described.
3. Why is it important for a firm like Cabela's to segment its customers? What benefits can the firm obtain? Are there any disadvantages? Explain.

Note: You may answer the questions in the comment field and make sure you write your name & id or you may answer in binusmaya forum. Thank you