Expert answer:Need management help with a case on the Kimberly-C

Answer & Explanation:Case:
Kimberly-Clark Corp: Shopping for Virtual Products in Virtual Stores.
Case Summary
1. Summarize the top three points in the case in your own
words.
Case Analysis
2. Are the concepts presented in the case revolutionary for
this company? Why or why not?
Case Application
3. Identify at least three companies that could learn
lessons from the case. What are they and why did you list them as important?
*NOTE: Please answer each question with a minimum of 250
word count. Place answers underneath each question when writing the paper. The
case review is on page 71-72 on the attached file. Use APA format to include
in-text citations and a reference page. Use a minimum of 2 references. Thanks
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Management
Challenges
CHAPTER 9
Business
Applications
Module
III
Development
Processes
Information
Technologies
Foundation
Concepts
e-COMMERCE SYSTEMSW
Ch apt er Highligh t s
Section I
e-Commerce Fundamentals
Introduction to e-Commerce
The Scope of e-Commerce
Real World Case: Sony, 1-800-Flowers, Starbucks, and
Others: Social Networks, Mobile Phones, and the Future of
Shopping
Essential e-Commerce Processes
Electronic Payment Processes
Section II
e-Commerce Applications and Issues
Business-to-Consumer e-Commerce
Real World Case: LinkedIn, Umbria, Mattel, and Others:
Driving the “Buzz” on the Web
Web Store Requirements
Business-to-Business e-Commerce
e-Commerce Marketplaces
Clicks and Bricks in e-Commerce
Real World Case: Entellium, Digg, Peerflix, Zappos, and
Jigsaw: Success for Second Movers in e-Commerce
Real World Case: KitchenAid and the Royal Bank of
Canada: Do You Let Your Brand Go Online All by Itself?
R
I L ea r n i n g O bj ect i v e s
G
1. Identify the major categories and trends of
H
e-commerce applications.
T 2. Identify the essential processes of an e-commerce
system, and give examples of how it is imple,
S
H
E
R
R
Y
mented in e-commerce applications.
3. Identify and give examples of several key factors
and Web store requirements needed to succeed in
e-commerce.
4. Identify and explain the business value of several
types of e-commerce marketplaces.
5. Discuss the benefits and trade-offs of several
e-commerce clicks-and-bricks alternatives.
2
7
9
3
B
U
349
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Module III / Business Applications
SECTION I
Introduction to
e-Commerce
e-Commerce Fundamentals
E-commerce is changing the shape of competition, the speed of action, and the streamlining
of interactions, products, and payments from customers to companies and from companies
to suppliers.
For most companies today, electronic commerce is more than just buying and selling products online. Instead, it encompasses the entire online process of developing,
marketing, selling, delivering, servicing, and paying for products and services transacted on inter-networked, global marketplaces of customers, with the support of a
worldwide network of business partners. In fact, many consider the term “e-commerce”
to be somewhat antiquated. Given that many young businesspeople have grown up
W
in a world in which online commerce
has always been available, it may soon be time
to eliminate the distinction between
e-commerce
and e-business and accept that it is
R
all just “business as usual.” Until then, we will retain the term “e-commerce” because it
allows for a clearer picture ofI the differences between online and more traditional
business transactions.
G
As we will see in this chapter, e-commerce systems rely on the resources of the
H technologies to support every step of this process.
Internet and many other information
We will also see that most companies,
large and small, are engaged in some form of
T
e-commerce activities. Therefore, developing an e-commerce capability has become a
,
competitive necessity for most businesses in today’s marketplace.
Read the Real World Case on the next page. We can learn a lot about new ways to
reach customers using technology from this case. See Figure 9.1.
The Scope of
e-Commerce
S
Figure 9.2 illustrates the rangeH
of business processes involved in the marketing, buying,
selling, and servicing of products
E and services in companies that engage in e-commerce.
Companies involved in e-commerce as either buyers or sellers rely on Internet-based
R
technologies and e-commerce applications and services to accomplish marketing, disR product and customer service processes. For example,
covery, transaction processing, and
e-commerce can include interactive marketing, ordering, payment, and customer
Y
support processes at e-commerce catalog and auction sites on the World Wide Web.
However, e-commerce also includes e-business processes such as extranet access of
inventory databases by customers
2 and suppliers (transaction processing), intranet access
of customer relationship management systems by sales and customer service reps
7 collaboration in product development via e-mail
(service and support), and customer
exchanges and Internet newsgroups
9 (marketing/discovery).
The advantages of e-commerce allow a business of virtually any size that is located
3 to conduct business with just about anyone, anyvirtually anywhere on the planet
where. Imagine a small olive B
oil manufacturer in a remote village in Italy selling its
wares to major department stores and specialty food shops in New York, London,
U markets. The power of e-commerce allows geoTokyo, and other large metropolitan
physical barriers to disappear, making all consumers and businesses on earth potential
customers and suppliers.
e-Commerce
Technologies
Which technologies are necessary for e-commerce? The short answer is that most
information technologies and Internet technologies that we discuss in this text are, in
some form, involved in e-commerce systems. A more specific answer is illustrated
in Figure 9.3, which gives an example of the technology resources required by many
e-commerce systems. The figure illustrates some of the hardware, software, data, and
network components used by FreeMarkets Inc. to provide business-to-business (B2B)
online auction e-commerce services.
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Chapter 9 / e-Commerce Systems ●
REAL WORLD
CASE
A
1
Sony, 1-800-Flowers, Starbucks, and
Others: Social Networks, Mobile
Phones, and the Future of Shopping
number of major retailers have been driven into
bankruptcy protection during this recession, including RedEnvelope and Eddie Bauer, or gone out of
business altogether, like Circuit City. Blockbuster, Virgin
Megastores, and many more have closed stores. Survivors, suffering deflated profits and slow sales, warn of a bleak future.
But smart retailers are going where it’s warm: the hot little
hands of cellphone- and laptop-toting consumers who want to
shop right now, wherever they happen to be sipping their lattes
or watching their kids’ soccer games. Technology-backed
projects to increase revenue include mobile e-commerce,
coupons by text message, and even storefronts on social networks. As enablers of these projects, CIOs are moving ever
closer to the customer.
“Out of recession develops one picture—finally—of
what true business-IT alignment looks like,” says Drew Martin,
CIO of Sony Electronics. “IT is becoming part of the product
offerings.” Whether that’s hotel kiosks, mobile banking,
hospital patient portals, or retail, CIOs are getting their IT
groups to the front line in the competition for consumer
dollars. When a customer logs on to his new Sony e-book
reader, for example, the device automatically connects him to
his existing customer profile, from which he can start buying
e-books. This feature is available thanks to Martin’s efforts to
connect product development with Sony’s internal customer
relationship management system.
As exciting as it is to live on the progressive edge of the
CIO profession, though, it’s a new world to navigate at a time
when wrong moves can severely hurt a company. “The challenge is that now you’re entering into the revenue space,”
W
R
I
G
H
T
,
S
H
E
R
R
Y
F IGUR E 9.1
2
7
9
3
B
U
Companies are expanding from Web sites and
email into new ways of reaching consumers
through innovative uses of technology.
Source: © Alex Segre/Alamy.
351
Martin says. “You need to commit to delivering your part of
what needs to be delivered.”
“Web sites and e-mail—that’s just too many steps now,”
says Brett Michalak, CIO with Tickets.com, which sells tickets to games, concerts, and other events, as well as having its
own ticketing technology.
Social media such as Twitter, Facebook, and YouTube
take e-mail out of the equation, putting offers in front of customers on sites they already visit. Dell, JetBlue, Whole Foods,
and other big brands have pounced on Twitter as a marketing
and promotion tool, tweeting special deals to followers. Dell,
for example, attributes more than $2 million in sales to its 14
Twitter accounts that promote offers to 1.4 million followers.
(“15 percent off any Dell Outlet Inspiron laptop. Enter code
at checkout . . .”)
Sony is using Twitter, among other social networking
sites, to hype the SonyReader. A recent tweet included a link
to a page at Sony’s site comparing the product favorably to
Amazon’s Kindle. “You can’t build a site and expect people to
come. We are on YouTube, Facebook, and Twitter to go out
and get them,” Martin says.
1-800-Flowers intends to find out whether social networkers are also social shoppers. In July 2009, the $714-million
flower delivery company launched the first Facebook storefront. Collectively, Facebook’s 300 million active members
spend eight billion minutes per day on the site, according to
the company. An Experian survey found that dwell time for an
adult visiting a social network is 19 minutes and 32 seconds.
Meanwhile, 35 percent of adults who had been on a social network in the past month had also bought something online in
that time period, the survey found—a ripe demographic.
“Still, there’s a lot to do on Facebook, so any shopping
has to be fast,” says Vibhav Prasad, vice president of Web
marketing and merchandising at 1-800-Flowers.
The company’s Facebook store, therefore, offers only
10 percent to 15 percent of the several hundred bouquets
available from the main 1-800-Flowers Web site, and the checkout process has been pared down. No suggestions to buy related
products pop up, for example, and four special-occasion tabs
span the top of the page, instead of the eight on the main site.
“It’s a fairly impulsive purchase in this channel,” Prasad
says. “As simple and as quick as we can make it, the more
effective we’ll be.” Impulsiveness is key. Every time Facebook members log in, they see updates about who among
their friends is having a birthday. Prasad wants those regular
reminders to spark flower buys. Going social was “a logical
extension” for 1-800-Flowers, which was one of the first retailers to put up an e-commerce site in the early 1990s, notes
Kevin Ranford, director of Web marketing. “It comes from
listening to customers and responding to the channels in
which they’re interacting,” Ranford says.
Facebook users spend most of their time looking at their
own home pages. They read their news feed—a display of
their friends’ status updates, quizzes taken, notes posted, and
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Module III / Business Applications
games played. So, 1-800-Flowers is planning a way into the
news feed. When a fan fills out a wish list to indicate which
flowers she’d like to receive, notification goes into the feeds
of her friends. Carol logs on to Facebook, sees that Alice has
a birthday on Thursday and wishes for the “Pleasantly Pink”
bouquet. Ding! Carol clicks over to the 1-800-Flowers store
and $29.99-plus-shipping later, takes care of that gift without ever leaving Facebook. “We think people will do it because social networking is all about you expressing your
interests and your friends responding,” says Wade Gerten,
CEO of Alvenda, the Minneapolis software developer that
built the Facebook store for 1-800-Flowers. “Shopping online can be social again, as it was in person.”
People lose their credit cards and forget their wallets. But
cell phones? There is perhaps no combination of vices so bursting with commercial promise than that of cell phone-pluscaffeine. Starbucks is there. In September 2009, the $9.8 billion
coffee chain began testing a system to let customers pay using
their iPhones or iTouch devices. They download the Starbucks
Card Mobile App and type in the number of their Starbucks
loyalty card, preloaded with spending money. A 2-D bar code
appears that cashiers can scan.
Royal Oak Music Theatre, a Michigan music and comedy venue that has featured such acts as Train and Bob Saget,
started mobile ticketing three years ago and has adjusted its
marketing to cover for finicky technology.
Anyone who’s done self-checkout at the supermarket
knows that scanning takes a special, knowing touch. Still,
scanning bar codes on the screens of mobile devices often
requires extra wiggling of the phone and slanting it at different
angles. It’s slower than scanning paper tickets. To avoid ticking off patrons lined up to run in and grab general-admission
floor spots, Royal Oak created a separate VIP entrance for the
mobile customers. There, staff use the newer model scanners
required for reading mobile bar codes, and it’s not so apparent that the scanning takes longer, says Diana Williams, box
office manager.
Mobile customers are also allowed to get into the theater
a few minutes before traditional customers, which encourages more people to buy their tickets by cell phone, she says.
That’s cheaper for the theater than handling paper tickets;
CASE STUDY QUESTIONS
1. How do the companies involved benefit from the innovations discussed in the case? Is it about more efficient
transaction processing, better reaching out to customers, or both?
2. Use examples from the case to illustrate your answer.
3. “Shopping online can be social again, as it was in person,” says Wade Gerten, CEO of Alvenda. Do you
think this is a stretch, or are we in the midst of a turning point in online shopping? Explain your answer.
4. Many of the applications discussed in the case are mostly
used by the younger demographic, who grew up around
technology. How do online behavior patterns change as
they become older, with more responsibilities, and more
challenging jobs? Do applications like those discussed in
the case become less important? More important?
saving money and hassle time is Williams’ goal. But it also
positions the theater well for collecting future revenue.
“Mobile ticketing skews young,” Williams observes. The
theater does shows for all ages, and for a typical adult event,
16 percent of tickets sold are through the mobile channel.
But for a recent show by the boy-band Hansen, popular with
tween girls, mobile accounted for nearly 40 percent of tickets.
“There’s an age—around 22 or younger—where it would
never occur to patrons that you couldn’t buy a ticket from
your phone,” Williams says.
Mobile and social commerce projects will change the
business of any company that invests in it, says Russ Stanley,
managing vice president of ticket services and client relations for the San Francisco Giants. For example, instead of
being a long-planned activity, a Major League Baseball game
can become an impulse buy, Stanley says, bringing in more
W
sales for the organization.
R Every game day, the Giants have 40,000 seats to sell. If
they’ve sold only 30,000, 10,000 spoil every bit as badly as old
I pears. Last year, the team changed prices daily on about 2,000
Stanley imagines the day when he’ll have a database of
Gseats.
fans who, say, live within a mile of the ballpark to whom he can
Htext last-minute offers. “Hey, the Giants have $5 tickets left for
tonight. For $5, I’ll walk down there,” he says. “As they’re
Twalking up to the entrance, they’re buying on the mobile.”
, The Giants started to offer mobile tickets midway
through the 2008 season, when they sold about 100 tickets
that way per game. In 2009, it was about 200 and Stanley
to do about 400 per game in the coming years. “Fans
Sexpects
who use it love it. It’s getting the people to use it,” he says.
H Like hot dogs and cold beer, holding a ticket is part of the
rite of baseball, he says. Plus, there’s the souvenir value.
EWhen pitcher Jonathan Sanchez threw a no-hitter against
Rthe San Diego Padres in July 2009, about 50 mobile fans, as
well as people who had bought tickets online and printed
Rthem on plain paper at home, later requested the team print
tickets for them to commemorate the event. “We did
Y“real”
that for them. It’s good relations,” says Stanley. And, he adds,
it could turn into a money-making service in the future.
Adapted from Kim S. Nash, “Facebook, Mobile Phones, and the
2Source:
Future of Shopping,” CIO.com, November 24, 2009.
7
9
REAL WORLD ACTIVITIES
3
the examples discussed in the case. Go online
B1. Consider
and research what other companies or industries are
U doing in terms of the use of social networking sites and
mobile commerce. What other examples can you find?
Prepare a report that compares those in your research
with the ones described here, highlighting similarities
and differences. Can you spot any new trends?
2. How often, if ever, do you shop with your mobile phone?
What do you think are some of the roadblocks that prevent the widespread adoption of mobile shopping?
3. What would you suggest companies do to overcome
those? Break into small groups with your classmates to
develop a few recommendations.
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Chapter 9 / e-Commerce Systems ●
353
FIGURE 9.2
E-commerce involves accomplishing a range of business processes to support the electronic buying
and selling of goods and services.
Marketing/Discovery
Market/
Product
Research
Transaction Processing
Market
Stimulation/
Education
Terms
Negotiation
Order
Receipt
Order
Selection
and Priority
Product
Evaluation
Terms
Negotiation
Order
Placement
Order
Tracking
Service and Support
Order
Billing/
Payment
Mgmt
Order
Scheduling/
Fulfillment
Delivery
Customer
Service and
Support
Product
Receipt
Product
Service and
Support
Selling Process
Product
Discovery
Order
Payment
W
R
I
G
QuickSource user submits
1 a request for quote
H(RFQ)
for publication viaTInternet.
,
Buying Process
F IGUR E 9.3
The hardware, software,
network, and database
components and IT
architecture of B2B online
auctions provider
FreeMarkets Inc. are
illustrated in this example
of its Internet-based
QuickSource auction
service.
Browser
Firewall
2
Web server parses
HTTP request,
validates user
identity and
authorization, and
processes request.
Database
Servers
6
S
H
E
R
R
Y
Web server sends
confirmation to browser.
Web Server Farm
2 Windows
Advanced Server
7 Internet
Windows
Information
9 Server
Datacenter
Server
3
SQL Server
B
server
3 Database
U RFQ status
updates
5
Application
servers notify
suppliers of the
new RFQ via
e-mail.
as “published.”
Back-Office
Application
Servers
Storage-Area Network
Databases
4
Transactions and user
activity logged for billing
and marketing purposes.
Windows
Advanced Server
cluster
J.D. Edwards
OneWorld ERP
software
Siebel Systems
CRM software
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Forrester: Web 2.0
Has a Bright Future
As a standard enterprise tool, Web 2.0 has a bright future, one for which companies
are expected to spend $4.6 billion by 2013 to integrate into their corporate computing environments, according to a Forrester Research report. Though still considered
an upstart technology, Forrester believes that conventional Web 2.0 elements—social
networking, RSS, blogs, wikis, mashups, podcasting, and widgets—are fast becoming
the norm for communicating with employees and customers. The report highlights
megacompani …
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