Company 3

1. Company 3 Rob Rochester

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

3. 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.

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

5. 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.

6. 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.

7. 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.

8. 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

9. 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.

10. 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.

11. 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.

12. I. S.W.O.T. analysis

13. 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.

14. 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.

15. 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.

16. 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 company’s traditional reporting systems, captures data for each goal.

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

18. E-Commerce • Differentiation will be company 3’s 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.

19. 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.

20. 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.

21. 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.

22. 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.

23. 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.

24. 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.

25. 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.

26. 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 3’s 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.

27. 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.

28. 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.

29. 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.

30. 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.

31. 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.

32. 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.

33. 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.

34. 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.

35. Relating technologies • My Catalog • Allows for reorder of any existing products. • Personalized ordering forms. • Welcome Help • Helps with FAQ’s • 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.

36. Questions?