Company 3

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Company 3

• Rob Rochester

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Company Overview

• Well staffed brick-and-mortar specialty hardware
  distributor.
• 70 years of operation.
• Strategic business unit of a much larger
  corporation.

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Company 3

• The corporation used the General Electric market
  attracting business strengths matrix.
• It had previously excelled by carefully selecting
  the markets it entered with its hardware product
  line.
• Found success introducing new products based on
  customer wants and needs.
• Created customer loyalty through its distribution
  strategy, which made the company feel like
  customer loyalty was unstoppable.

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Distribution channel

• Local outlets
• Managed and staffed by local residents.
• Increased customer loyalty, and helped to retain
  customers.
• Very successful in in years past.

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Competitors

• Shifted sales from brick and mortar business to
  direct telephone and catalog sales.
• Promised ongoing quality of services as well as
  dependable delivery of goods, which they deliver
  on.
• First phase of there electronic storefront
  already in operation.
• Which gave its customers the option to shop at
  their own leisure.
• One company started a very aggressive referral
  program amongst its customers to generate new
  customers from there existing customer base.

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Competitors

• - Competitors battled the superior sales staff
  and personalized services of company 3 by
  starting telephone customer support which allowed
  its customers to access the company via customer
  support crew 24 hours a day 7 days a week.

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Initial problem

• Company 3 was still relying on face-to-face
  selling, which made sales distribution increase
  and impacted profitability.
• As competitors switched sales channels company 3
  invested heavily in existing channels to capture
  new customers, which failed because competitors
  delivered on there promises.
• This caused loss of market share.
• Both its expensive physical distribution system
  and competitors capitalizing on successful new
  business marketing campaign hurt company 3
  severely.

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Corporate management

• Decides that if the company shares digress lower
  that 10 in a fiscal year they will sell.
• Shares had decreased 6 in first 3 quarters.
• Being so close to divestments the president of
  the company attended a meeting in which he
  discussed his plan for remaining a viable SBU of
  the corporation, with the CEO and CFO

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Identifying the problem

• The company first had to identify the gap between
  its future desired market share and its current
  market share, which yields the strategic planning
  gap.
• Closing that gap became the number one priority.
• What hurt the company more was its competitors
  shift to telephone and catalog sales helped
  company 3 in the short term, which only hurt them
  more when they realized that later, the new sales
  channel better suited there business.

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• The intensive growth option was picked as the
  most effective means of closing the gap.
• Focused on selling more products to existing
  customers.
• Increased revenue.
• As well as luring customers back, up selling to
  existing customers, and development of new
  markets for existing products.
• Increase market share and revenue.

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Business Mission

• To leverage its existing products further in
  current markets, planning to be an innovative
  leader in providing high quality hardware and
  exceptional customer service.

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I. S.W.O.T. analysis
Strengths - Brand equity. - Company reputation. - Heavy investment from corporation into brand awareness. Customer satisfaction. Employee dedication. Product quality. Weakness declining market share. Customer attrition. Lack of timely innovation. Financial vulnerability.
Opportunity - Existing physical sales and distribution which no competitor could compete with. Threat - success of its competitors new way of doing business.
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II. Goals

• Goal 1
• Develop and implement sales distribution and and
  customer services that would not solely rely on a
  physical store presence.
• Also develop extensive market research of
  existing customers and potential customers in
  order to determine customer preferences.
• Goal 2
• Improve market share by 12 percent over 18
  months.
• Goal 3
• Develop technological innovations for sales and
  services that exceeded the competition.

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II. Goals continued

• Goal 4
• Leverage the strength of the brand, announce and
  implement these new practices.
• Goal 5
• Develop alliances with the current physical store
  management to facilitate the change.
• Goal 6
• Identify and new markets for existing products.
• Increasing revenue and sales.
• Goal 7
• Increase sales to existing customers through new
  sales services channels.

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• III. Focused on differentiation.
• Not a pioneer or market leader, they will learn
  from them and take full advantage of
  technological innovations just announced.
• IV. Programs were formed to address each of the
  7 goals.
• Contingent upon leveraging technology to increase
  the sales channel.
• V. Followed the McKinsey 7-S framework
• Technological capabilities will be key.
• Employees of local stores were critical to the
  new sales channel.
• Training is required as well as support from the
  corporation.

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• VI. Feed back and control
• Provided a definition of the measure for success
  of company 3.
• Develop a measurement structure so that the
  technology-enabled environment, in combination
  with the companys traditional reporting systems,
  captures data for each goal.

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Overall objective

• Increased market share and recapture its previous
  leadership position.
• Internet enabled environment is key.

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E-Commerce

• Differentiation will be company 3s goal here.
• by being a follower with the transaction-enabled
  site they will differentiate with the use of
  encrypted account numbers to ensure security,
  which will be explained on a highlighted privacy
  and protection statement on the home page.

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Business Intelligence

• Instituted a system that worked as a competitive
  bench marking system to determine best practices
  for its entry into the electronic environment.
• Added a score card of its site and checked it
  against its competitors monthly to keep from
  missing future opportunity.
• Also added in to the site log file analysis,
  click stream behavior, and registration
  information.
• Helps the company define who there online
  customers are.

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CRM

• Most challenging aspect of there online store
  front.
• Differs from competitors by continually
  collecting online behavior and customer feedback.
• This will create and deepen online relationships
  with current and future customers.
• Set up network desktops at all local stores as
  well as trained staff on its website.
• Employees were given incentives to demonstrate
  use of the site to customers.
• Encouraged customers to come to the brick and
  mortar store to place electronic orders.

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SCM

• Developed a specific, proprietary,
  password-protected website for its suppliers.
• Gave access to employees to view stock levels and
  gave them authorization to replace stock when it
  reached cretin levels.
• Improved delivery time for stocked items and
  reduced inventory costs.
• Order fulfillment was reduced by 60 which
  reduced the accounts receivable collection times.

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ERP

• Human resource manuals were placed online with
  appropriate links.
• Online question and answer capabilities with
  human resource staff was established.
• Benefit package levels could be controlled online
  by employees.
• office Supplies were ordered online through
  established relationships with suppliers.

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Primary Stakeholders

• Employees
• The Employees play a crucial roll as stakeholders
  because they are the ones that will help the
  customers transition smoothly, this transition
  would not work with out them.
• Customers
• Create online transactions at the same time
  building or increasing there relationship with
  the company.

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Value Bubble Technologies

• The most sophisticated technologies available on
  the internet were used in the making of the site
• HTML
• Cascading style sheets (CSS)
• JavaScript
• XML
• JavaServer Pages (JSP)
• Servlets were also incorporated into the site.
• All of this works together to give the customer a
  lag free shopping experience after the initial
  login.

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Attraction

• Increase importance due to new sales channel.
• 4 primary communication avenues.
• Working closely with the local stores to get
  in-store merchandising to announce the new site
  and offer that the customers have there first
  online experience in the store.
• Carefully trained employees are crucial for this
  to be successful because they will assist the
  customers in any way so they get the full
  experience from the site on there first use.
• Direct mail was used along with the vast amount
  of customer information to send a visually
  appealing announcement.

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Attraction continued

• Customers would receive a 15 discont on their
  next online purchase by registering on the site
  during the first purchase.
• Trade journals covering company 3s existing
  markets as well as new ones were targeted for
  advertisement.
• Employees
• Employees were given access to there own site
  where special services could be used.

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Attraction Technologies

• Visually appealing single page site.
• Using XML
• Many different types of attractions.
• Random offer link, which offers everything from
  toys to home entertainment equipment.
• Made with a very simple built in java function.
• Hot Deals and Clearance sections added.
• Great comparison shopping available on the site.

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Engaging

• Employees were used for prototype testing and
  also conducted usability analysis for the site.
• Financial incentives were offered for the first
  two visits to build traffic on a short term
  basis but long term success was critical
• Additional offers
• Free design software.
• Online networks of customers.
• Auction software that customers could download
  for free and use.

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Engaging technologies

• Customer registration, which gives the user
  additional options when viewing the site.
• Virtual lighting center. With a virtual reality
  tour of the room you plan to light.
• Gave users a large selection of lights and rooms
  styles to choose from as well as a 360 degree
  tour of the room to give the customers an idea of
  what it will look like once all the lights had
  been installed.
• Very simple and easy to use.

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Retaining

• Customers
• New services were added frequently on the
  website.
• A pop-up survey attached to the site gave them
  feed back from there customers.
• E-mail announcements were sent out to existing
  customers telling them about the newly added
  features.
• Information was gathered on a face to face basis
  and was incorporated to promote return visits to
  the physical store through the employees.
• Information was still being announced via in
  store merchandising about the site and newly
  added features.
• Employees
• Added many new features for the employees to use
  and were encouraged to access the site regularly
  to see the new features.
• Insurance provider information.
• Internal career opportunities.
• Online training.

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Retaining technologies

• Log on phase helped to personalize the site for
  its customers.
• Once logged in the customers gained access to
  there My Catalog as well as My Account
  information.
• Lack of updates caused the My Catalog to crash
  occasionally.
• IGuides were added to ease the use of the site
  even more.
• Credit line application offers.
• Randomized offers.
• Each time a customer accessed the site they were
  giving a different random offer that would pop
  which was generated from clearance products list.

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learning

• Online and demographic information was collected.
• Gathering information in both the online and
  physical world allowed for them to focus in on
  exactly what the customer wanted and the more
  frequent the customer visited the better they
  were able to satisfy them.

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Learning technologies

• Information was collected and stored from the
  customers when they accessed the site.
• Log On
• My Account
• My Catalog
• Data was collected from purchases as well as
  click streams to give the company a better idea
  of what its customers were purchasing rather than
  just what they are viewing.
• a database storage system with a log-in allowed
  them to continually access this information and
  gave them the advantage over cookies because the
  customer would not want to, and could not delete
  this information.
• Gave customers the option to use any computer
  from any location.

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Relating

• Customers
• By intergrading the information that was
  collected both online and offline the company was
  able to become one voice to the customer.
• Allowed for the customer to speak with employees
  as company representatives rather than employees.
• Employees
• Allowing them to access information gives them
  all the tools needed to successfully deal with
  the customer base.
• Gave employees job satisfaction.

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Relating technologies

• My Catalog
• Allows for reorder of any existing products.
• Personalized ordering forms.
• Welcome Help
• Helps with FAQs
• A PDA device was used to allow customers to scan
  items they needed and then used a special docking
  station to upload the information to make
  ordering as simple and easy as possible.
• Forming not only a inventory solution but also
  further ties between the customers and the
  company.

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Questions?