Cis485 Shop Sense Case Study

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Cis485 Shop Sense Case Study

  1. 1. Carissa Colon Nish Patel Candace Reigrod July 19, 2009
  2. 2. Summary  IFA, one of the largest sellers of health and life insurance, wants to work with ShopSense, a Dallas-based national grocery chain, in order to purchase customer information that ShopSense has collected through the information provided by its customers in order to participate in a customer loyalty program.  IFA plans to utilize this information to gain a competitive advantage in the insurance industry by basing its rates on the correlations drawn from a customer’s grocery purchases and his health insurance claims.
  3. 3. Benefits from working together  IFA will be paying ShopSense for their valuable customer data. Therefore, ShopSense will be generating more revenue without any additional overhead cost.  ShopSense will provide IFA with very useful information about their customers. IFA will gain an huge competitive advantage that other companies will not have.  “Exclusive rights to our data will give you information that your competitor won’t be able to match.” (Pg. 38, HBR.org)
  4. 4. Ethical or Unethical?  It is unethical for ShopSense to sell information about their customers  Customers should have the ability to know that their information is being viewed by other people, especially when the information will be used to formulate opinions and rates that will directly affect them  As Katherine Lemon points out: “Most customers would probably be surprised to learn that their personal information could be used by companies…in other ways that aren’t readily foreseeable.”
  5. 5. Impact  Customers may not want to shop at ShopSense due to ShopSense selling information about the customers.  Since IFA is getting information about ShopSense customers, it is possible that these customers could be negatively affected by their information being released to one of the worlds largest health and life insurance company’s.  Insurance rates could be falsely inflated or deflated if the data is interpreted without consideration of other mitigating factors (i.e. customers shopping for someone else, daycare directors shopping for their schools, etc.)
  6. 6. Making it Ethical  W t c uldSho Se ea IFA d to m kethiss tio ha o p ns nd o a itua n e a thic l?  Sho Se es uld d c s the c to e tha the a p ns ho is lo e ir us m rs t y re g ingtos ll the info a n toIFA o a o r kindo o e ir rm tio r ny the f cma o p ny  Sho Se es uld s p ns ho urve c to e re a ingw the o y us m rs g rd he r r no thec to e w uldm if Sho Se ep rtne dw t us m rs o ind p ns a re ith IFA  Thed tac lle te s uld b us d a ag ne c s s y a a o c d ho e e s e ric a e tud s o p s dtoad ta dhe lth ind a r fo s e ificc to e p oe e ile a ic to r p c us m rs
  7. 7. Conclusion  Overall, it is not ethical for ShopSense to sell information to IFA.  They should ask for consent from their customers first.  ShopSense should do everything in their power to make the situation ethical in order to benefit themselves, IFA and to please their customers.

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