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Supervalu

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2. Discuss the specific advantages of decentralized and centralized approaches of an IT architecture at Supervalu

Advantage of decentralized:
Decentralization gives individual store directors autonomy over their own resources without any major considerations over other directors unless it is essential to the overall organization policy. One of SUPERVALU’s turnaround strategies is moving from centralized to store­centric decision making, such as empowering store directors with greater autonomy. After SUPERVALU acquired West Coast grocery chain Albertsons, the company’s revenue model was changed. In 2006, about 77% of the company’s total revenue came from retail (Figure 3). It means SUPERVALU needs to face on running a grocery business. SUPERVALU coined the term “hyperlocal”, which is trying to become America’s Neighborhood Grocer. The main traits of a decentralized approach include flexibility, empowerment of individual business units, and service orientation. Because of decentralization, store directors could decide which merchandise to feature based on their understanding of customer needs and have more leeway in merchandising their stores based on the needs of their community; therefore, the local store can retain old customer, attract new customer, and maximum the profit. SUPERVALU also developed a comprehensive annual performance review (Figure 5); it can keep store directors more effective. Advantage of Centralization:
Centralization refers to the allocation of all IT resources to one particular business unit that provides IT services to the whole organization. A centralized system in general is efficient due to reduced duplication, more centralized control, and better standardization. Base on this case, after a series of attempts, SUPERCALUS strategy decides to move from banner­based to centralized…...

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