Write A Business Report Based On The Following Case: Sheltex ✓ Solved

Write a business report based on the following case: Sheltex

Write a business report based on the following case: Sheltex is the merging of two very popular petrol service stations in Australia. The merging of these two large chains has created a problem because stations that were previously competitors are now close together. Senior management has decided that service stations within 1 km of each other will be converted under one of two options: Option 1: One station sells certain fuels (e.g., E10 and RON95) and the other sells RON98 and diesel; Option 2: One station continues selling the full fuel range and the other converts to a small supermarket using the former pump area for short-term parking. To prevent customer confusion, only one option will be implemented nationwide (no hybrid solutions). Write a business report outlining this case, state your assumptions, critique the management decisions with reference to literature, distinguish Information Systems (IS) and Information Technology (IT) issues and explain how they will affect customer choice and continued patronage (noting other competitors still exist). Suggest ways to attract new customers from competitors and other new business opportunities arising from this setup (e.g., car maintenance, tyre and battery change, short-term child care, and other small businesses). Substantiate all points with references to IS and IT literature. Optionally, address how to operate stations that are more than 1 km apart.

Paper For Above Instructions

Executive Summary

This report analyses Sheltex’s corporate decision to standardise the treatment of proximate petrol stations (≤1 km) by selecting one of two conversion strategies nationwide: split fuel assortments across adjacent sites (Option 1) or convert one site to a small supermarket while the other maintains full fuel range (Option 2). The report states assumptions, critiques management’s decision using strategy and IS/IT literature, differentiates IS and IT issues, assesses customer choice and patronage impacts, and recommends tactics to attract competitors’ customers and new ancillary businesses.

Assumptions

• “Nearby” is precisely ≤1 km as defined by management and affects only a minority (
• Fuel price parity is largely maintained across Sheltex stations; brand differentiation is service/format based.
• Existing regulatory approvals allow conversion of forecourt space to short-term parking and retail in most jurisdictions, subject to local zoning.
• Competitor stations remain numerous and capable of exploiting any customer confusion or service gaps.
• Enterprise IT/IS budgets can be reallocated to support a national rollout and a centralized data strategy.

Critique of Management Decision

Strategically, the two options represent different value propositions. Option 1 (fuel segmentation) pursues operational efficiency and product differentiation, potentially reducing inventory duplication and capturing niche fuel segments (Porter, 1985). However, it increases customer search costs and risks channel friction: customers used to one-stop fueling may defect if required to visit two sites to access preferred fuel types (Kotler & Keller, 2016). Option 2 (full-fuel + supermarket) leverages convenience retailing and higher-margin convenience sales (Deloitte, 2017), diversifying revenue and aligning with modern forecourt retail trends.

Mandating a single national option removes local flexibility. Literature on contingency and strategic fit suggests that “one-size-fits-all” implementations often underperform because market conditions vary by region (Laudon & Laudon, 2020). Local factors – urban density, competitor mix, and customer trip patterns – should determine the optimal format. Forcing a national uniform approach increases implementation risk and may reduce local market responsiveness (Porter, 1985; Kotler & Keller, 2016).

IS versus IT Issues

Differentiate IS and IT: IT refers to hardware, software, networks and technical infrastructure enabling operations (Turban et al., 2015). IS is the socio-technical system: people, processes, data, and technology integrated to support decision-making and business processes (Laudon & Laudon, 2020).

Key IT needs: integrated point-of-sale (POS) systems, fuel pump controllers, mobile apps, geolocation APIs, secure payment gateways, and cloud analytics. These are necessary to implement flexible pricing, digital coupons, and inventory tracking (Turban et al., 2015).

IS concerns include redesigning processes (e.g., routing customers, loyalty programs, staff roles), data governance, training, customer communication strategies, and omnichannel customer experience design (Venkatesh et al., 2003). For example, selecting Option 1 requires clear IS workflows for signage, digital wayfinding, and CRM messaging to avoid confusion; Option 2 requires inventory and supplier management integrations for grocery retailing (Shankar et al., 2011).

Impact on Customer Choice and Patronage

Customer choice is affected by convenience, perceived usefulness (Davis, 1989), and switching costs. Option 1 may annoy customers seeking one-stop fueling (increasing perceived effort) and thereby reduce loyalty (Berry, 1995). Option 2 tends to enhance convenience value through expanded retail offerings, potentially increasing dwell time and basket size (Deloitte, 2017), but risks alienating fuel-only customers if fuel pricing or service levels change.

IS-driven solutions—clear signage, mobile notifications, route optimization, and loyalty personalization—can mitigate confusion and reduce switching by improving perceived ease of use and usefulness (Venkatesh et al., 2003; Davis, 1989).

Recommendations to Attract Customers and New Business Opportunities

1) Choose Option 2 as the default national strategy, with defined exceptions for low-demand rural areas. Option 2 aligns with higher-margin retailing and broader customer needs while supporting diversification (Deloitte, 2017).

2) Roll out a unified digital platform (IT) and business processes (IS): integrated POS, omnichannel loyalty app, real-time inventory, and geo-fenced promotions. Use targeted push messages when customers enter catchment to announce offers or product locations (Turban et al., 2015; Shankar et al., 2011).

3) Introduce services co-located with supermarkets: express car maintenance bays, tyre and battery kiosks, and parcel pick-up lockers. These increase footfall and cross-sell opportunities—supported by a scheduling and CRM IS to manage appointments and customer history (Laudon & Laudon, 2020).

4) Pilot complementary services such as supervised short-term child play zones in high-traffic family precincts, subject to liability and regulation; manage bookings via mobile app and integrated IS to track dwell time and uptake.

5) Pricing and loyalty: use dynamic offers for fuel discounts based on grocery spend and transactable via mobile wallets. A unified loyalty IS reduces switching and attracts competitor customers (Berry, 1995).

6) Communication and signage: consistent national signage standards, plus in-app map layers showing which services are at each location, reduce confusion (Davis, 1989).

Operating Stations >1 km Apart

For stations farther than 1 km, maintain format flexibility. Use local market analysis to choose format (fuel-focused vs retail-led). Leverage the same IS/IT backbone to provide a seamless brand experience and permit targeted local assortments based on POS analytics and demographic data (Porter, 1985; Shankar et al., 2011).

Implementation Risks and Mitigation

Risks include regulatory constraints, customer backlash, execution complexity, and IT integration failures. Mitigate with phased pilots, local stakeholder engagement, robust change management, and investments in data governance and staff training (Laudon & Laudon, 2020; Venkatesh et al., 2003).

Conclusion

Sheltex faces a strategic choice with trade-offs. Option 2 offers greater revenue diversification and aligns with retail trends; Option 1 is operationally lean but risks customer inconvenience. A national standard combined with local exceptions, supported by a strong IS/IT platform, targeted loyalty programs, omnichannel communications, and new ancillary services, will best protect patronage and attract competitor customers. Continuous measurement and adaptive rollout are essential.

References

• Berry, L. L. (1995). Relationship marketing of services—growing interest, emerging perspectives. Journal of the Academy of Marketing Science, 23(4), 236–245.
• Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3), 319–340.
• Deloitte. (2017). The future of fuel retailing: Convenience and beyond. Deloitte Insights.
• Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.). Pearson.
• Laudon, K. C., & Laudon, J. P. (2020). Management Information Systems: Managing the Digital Firm (16th ed.). Pearson.
• Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press.
• Shankar, V., Smith, A. K., & Rangaswamy, A. (2011). Customer satisfaction and loyalty in retail environments: research and managerial implications. Journal of Retailing, 87(S1), S1–S5.
• Turban, E., Volonino, L., & Wood, G. (2015). Information Technology for Management: Digital Strategies for Insight, Action, and Sustainable Performance. Wiley.
• Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: Toward a unified view. MIS Quarterly, 27(3), 425–478.
• Australian Competition and Consumer Commission (ACCC). (2019). Report on petrol market outcomes and competition dynamics. ACCC Publications.