A Decision Model for E-commerce-enabled Partial Market Exit

Struggling retail chains often try to recover profitability by closing some of their stores. The challenge in this strategy lies in determining how many stores to close, as store exit has implications for both the customers and the supply chain. After a store closes, its customers are lost forever to the competition, unless there is a surviving open store nearby or an electronic alternative such as an e-store. From the supply chain perspective, after a store closes, its supporting regional distribution center is left with less business, and thus reduced viability. This paper develops a decision support model to study the profitability of alternative retail network structures by varying the proportion of stores that are closed, the average price sensitivity of demand, the price difference between the online store and the traditional retailers, and customer retention rates

E-Business and Distribution Channel Strategies in Agribusiness Industries

The explosion of e-business activity presents many challenges to manufacturers, distributors, and dealers as they select a distribution channel for the delivery of products, services, and information. The expected growth in Internet sales by agribusiness firms is analyzed to provide insight into the selection of an e-business distribution channel. Agribusiness firm managers were surveyed regarding the application and perceived impacts of e-business activity on their firm's operations. Firm characteristics and manager perceptions regarding the impact of e-business activity were analyzed descriptively and in regression analysis to understand the drivers of expected Internet sales growth. Expected Internet sales growth was found to vary by the firm's position in the distribution channel. Yet, firms with greater levels of existing e-communication with either customers or suppliers and with managers perceiving greater ability of e-business activity to improve inventory management and logistics issues have higher levels of expected Internet sales.Agribusiness,

Inefficiencies in Digital Advertising Markets

Digital advertising markets are growing and attracting increased scrutiny. This article explores four market inefficiencies that remain poorly understood: ad effect measurement, frictions between and within advertising channel members, ad blocking, and ad fraud. Although these topics are not unique to digital advertising, each manifests in unique ways in markets for digital ads. The authors identify relevant findings in the academic literature, recent developments in practice, and promising topics for future research

Influence of Physical Distribution Strategies on the Performance of Service Firms in Kenya: A Survey Study of Print Media Distribution in South Nyanza Region, Kenya

Digital media introduced to the market the quickest form of print content distribution man has ever seen; since its inception the print media industry is under several challenges. The current physical distribution efforts and sales results are not satisfying in the print media industry. Stiff competition exists among the media service providers and players where the print media is under a threat by the digital media as its market share is shrinking at a margin of 27% daily.  The purpose of this study was to assess the influence of the distribution strategies on the performance of service firms in Kenya with particular interest on Print Media Industry. The study adopted a survey design. The target population was 53 respondents selected using Census sampling technique. A structured questionnaire was used. Data was analyzed using descriptive statistics which involved the use of percentages and frequency tables.  Simple regression analysis was used to assess the degree of association between the variables under investigation and ANOVA for the level of significance between physical distribution strategies and performance of print media in the region. The findings were: customer service strategy and transport logistics strategy were the major physical distribution strategies adopted  and  had a mean weight of 4.5094 in a 5 point loaded scale; this result showed that their use in the industry was of high significance in contributing towards performance of the print media industry; a strong and positive correlation  existed between  physical distribution strategies and performance of the print media industry (R= 0.971a;  and  R2 = 0.943);   the ANOVA results indicated a significant relationship between the predictors (independent variables) and the dependent variable ( F= 271.918; p<0.05); customer service strategy has a positive contribution to the performance of the print media industry; the adopted regression model showed that Performance   = -1.230 – 0.011 TLS + 0.784 CSS + 0.074 RLS; hence increase in use of customer service strategy as physical distribution strategy causes a positive increase in performance of the print media industry in the area under study. Keywords: Distribution Strategies, Transport Logistics, Print Media, Performanc

Emerging Perspectives on Self Service Technologies in Retail Banking

This paper attempts to critically examine the available literature on the subject, discuss a model that provides a managerial framework for analyzing the variables associated with customer value, and to identify potential research areas. The discussion draws conceptual impetus from new technologies in banking services through self service technologies in banking as a tool for optimizing profit. The discussion in the paper also analyzes the main criteria for successful internet-banking strategy and brings out benefits of e-banking from the point of view of banks, their technology and customer values and tentatively concludes that there is increasing returns to scale in the bank services in relation to the banking products, new technology and customer value.Self service technology, retail banking, customer value, profit optimization

The Internet and the Future of Financial Services: Transparency, Differential Pricing and Disintermediation

The Internet has had a profound effect on the financial service sector, dramatically changing the cost and capabilities for marketing, distributing and servicing financial products and enabling new types of products and services to be developed. This is especially true for retail financial services where widespread adoption of the Internet, the standardization provided by the world-wide web, and the low cost of Internet communications and transactions have made it possible to reach customers electronically in ways that were prohibitively costly even 5 years ago; indeed, pre-Internet attempts at the online distribution of retail financial services were outright failures in the mid-1980s. The concurrent growth and de-facto standardization of Internet-enabled personal financial management software (e.g., Quicken and Microsoft Money) have also contributed to an increasing array of low cost and potentially richer ways to provide information and transaction services to customers. The growth in Internet-enabled products and service has been rapid in some sectors and slower in others. Retail brokerage has seen a dramatic change with more than 15% (Salomon Smith Barney, 2000) of brokerage assets now managed in on-line trading counts, and substantially more if "traditional" brokerage accounts and mutual funds with on-line access are included. Similarly, approximately 10 million US customers currently use on-line banking (O'Brien, 2000) and 39 of the top 100 banks offer fully functional internet banking (ePayNews, 2000). Many banks and brokerages are on their second or third release of their on-line delivery platform. Credit cards, while not radically transformed in operational aspects of the business, have begun to have some volume of new origination on-line. In addition, leading credit card companies such as Capital One Financial have been some of the largest "traditional" companies in the use of Internet advertising (see www.adrelevance.com, 1999). More regulated and complex financial products such as mortgages and insurance have had some origination volume on the Internet (an estimated $17Bn of mortgages will be originated and ~$400mm in insurance premiums will be sold online in 2000). For these sectors, the adoption of on-line origination has been much slower and concentrated in entrants, rather than incumbent firms. However, despite the small level of originations, the Internet has become a significant and growing source of product information - it is estimated that about 10% of insurance customers and 15% of mortgage customers have used the internet to shop for these products (Forrester, 1998; McVey, 2000). This may ultimately affect product purchase and pricing structure, irrespective of the delivery channel. Internet companies have also played a role in many other segments of the industry such as financial information and news, rating and comparison services, and even some areas where one might think the Internet would have a less significant role, such as financial planning and investment banking. While the continued growth rates are uncertain and the penetration for the more complex products has not yet been shown to be widespread, it is safe to conclude that the Internet will play a significant role in consumer financial services for a large subset of customers, and that this role will be significantly different across different sub-sectors of the financial industry. In discussions of the Internet impact on the financial services sector, the emphasis has often been placed on the direct cost-saving effects of using the Internet to provide transaction services. These potential cost savings are indeed significant and in the long term may lead to significant creation of value. However, there also substantial barriers to realizing much of this value. In some industries, such as the credit card industry, many of the potential gains from automation have already been realized, and in others, the gains may be concentrated in only a few areas of the value chain. For products which are sold through branches or agents (banking, mortgage and insurance), realization of cost savings will require a difficult and time consuming redesign of the retail delivery system. Finally, many of these efficiencies are accompanied by improved customer convenience. To the extent that consumers respond by consuming more services, particularly those that generate costs but not revenue, overall costs may not be substantially reduced. This has been the experience of previous innovations in retail financial service delivery such as automated teller machines (ATMs). Computers, and more recently the Internet, are best described as "general purpose technologies" (Brynjolfsson and Hitt, 2000), like the electric motor or the telegraph (Bresnehan and Trajtenberg, 1995). For general purpose technologies, most of the economic value they create is associated with their ability to enable complementary innovations in organization, market structure, and products and services. However, at the same time, these complementary changes are often disruptive to the existing structure of an industry (Tushman and Anderson, 1986; Bower and Christensen, 1995), leading to significant redistribution of value among industry participants and between producers and consumers. To understand the true impact of the Internet on the financial service industry, it is therefore necessary to identify how the Internet affects the critical drivers of industry structure, and how it enables or necessitates changes in products and services. This will necessarily be difficult, as it is hard to isolate the contribution of the Internet separately from the effects of other complementary innovations, and to distinguish Internet effects from other of long-term industry trends and exogenous factors. While obtaining precise numerical estimates of the productivity effects will be hard, in many cases the direction and general magnitude of the impact on productivity, profitability and consumer surplus (consumer value) will be clear. We see three principal issues that will determine the transformation of retail financial services: Transparency, or the ability of all market participants to determine the available range of prices for financial instruments and financial services; Differential pricing, in which finer and finer distinctions must be made among groups of customers, setting their prices based upon the revenue streams they generate, the costs to serve them, and their resulting profitability; Disintermediation or bypass, in which net-based direct interaction eliminates the role previously enjoyed by financial advisors, retail stock brokers, and insurance agents. Each of these will affect the roles to be played by financial service providers, the sources of profits available to them, and the strategies they may choose to pursue in order to earn those profits. However, different financial products will be affected differently by each of these issues in both the nature and the magnitude of the effect. In addition, these factors are often interdependent - for example, differential pricing is often a necessary response to increasing price transparency to prevent erosion of margins, and the ability to deliver sophisticated (although typically not complex) pricing strategies to customers may be affected by the incentives and structure of the distribution system. For these reasons, we will organize the remainder of the paper around the discussion of these effects as they apply within different sectors in financial services. The emphasis of our analysis will be on the primary sectors in retail financial services: credit cards, deposit banking, mortgages, brokerage, and insurance. Our focus is the retail segment because it has been the most radically transformed by the Internet to date, primarily because the retail business has the most to benefit from the reduction in customer interaction costs, the ability to reach mass markets, and the reduction in the role of geography in determining the strategies of financial services providers. Much of the computing- and communications-enabled transformation in the relationships among financial institutions or between financial institutions and consumers of wholesale financial services (for example, brokerage houses and exchanges, or large firms and their commercial lenders) have already occurred or were well underway before the Internet was commercialized. For these markets, the economics of computing and networking were still favorable under previous generations of technology. Many of the commercial financial services that are likely to be transformed by the Internet, at least in the medium term (3-5 years), are those that closely resemble retail services (such as commercial mortgage, short term lending, leasing, cash management, and the like). That is not to say that business to business (B2B) e-commerce opportunities do not exist in the financial sector - only that many of the medium term opportunities that are directly a result of the Internet are closely analogous to changes in the retail sector, and the others are probably more closely related to organizational and market innovation rather than a result of ubiquitous and low-cost communications technology.

Social media: the new tool in firms’ marketing strategies

In this work project we discuss the advantages and disadvantages of social media as a marketing tool. Four international cases were analyzed to provide anecdotal evidence of how social and viral marketing have been used by four firms in very different industries. We reviewed empirical evidence on the topic to discuss the main components of viral marketing. We concluded that positive (electronic) word of mouth, short response time and seeding through high network value customers are the main drivers of the success of a viral marketing campaign. We also conducted a study of the Portuguese telecommunications industry, in particular, the mobile segment. We found that the three main players operating in this market have been using social media successfully as a marketing tool in a strategic approach to the 14-25 years old segment.NSBE - UN

Exploring sources of competitive advantage in e-business applications: A cross-industries case study in mainland China

A review of existing literature revealed that little theoretical framework exists to capture e-business-enabled value creation through an integrated approach that includes the environmental view and resource-based view (RBV). Furthermore, little empirical research has been conducted to test these theoretical frameworks, in particular in the Chinese business context. The aim of this research is to extend the theoretical and practical understanding of e-business-enabled sources of competitive advantage (SCA) in China. The value chain (VC) concept, virtual value chain (VVC) framework and RBV were identified from the literature as the key constructs to underpin the theoretical basis. The research design used a qualitative research methodology consisting of indepth case studies of nine leading Chinese companies in three industries - housing development, manufacturing, and B2C. The principle finding is the formulation of a theoretical framework for investigating ebusiness value creations which integrates the key constructs of the VVC, online information capabilities (OIC), value system and RVB. This research also proposes a typology of five generic types of key e-business applications which states clearly the relationships between key e-business applications and SCA. Finally, this research demonstrates that e-business value creation features differently between two groups: Internet pragmatist and Internet pioneers. The research offers a number of contributions to the field of e-business value creation. Firstly, it introduces the concepts of OIC and value system to the VVC. It also provides empirical test of the analytical framework. In addition, this research provides an indepth understanding of the relationships between types of e-business applications and key SCA. Finally, this research identifies and explains the key differences and similarities between the three industries, within each industry, and between the two key groups

Pricing decision for new and remanufactured product in a closed-loop supply chain with separate sales-channel

Remanufacturing is a recovery process that transforms a used product into a “like-new” product, which usually comes with a warranty similar to that of the new product. Many manufacturers are concerned that remanufacturing might cannibalize the new products sales. Recent development shows an increasing trend in selling products through non-traditional channels, such as a manufacturers direct channel or an e-channel. A pricing decision model is developed for short life-cycle products in a closed-loop supply chain that consists of the manufacturer, retailer, and collector. The new product is sold via traditional retail stores and the remanufactured product is sold via the manufacturers direct channel. There are two scaling factors introduced in the model: (1) customer acceptance of buying a remanufactured product (reman-acceptance); (2) customer preference for buying a remanufactured product via a direct channel (direct-channel-preference). The results show that implementing a separate channel can improve the total supply chains profit compared to the single-channel approach. It is also found that the two scaling factors influence both the pricing decisions and profits of supply-chain members

Optimization of a Dual-Channel Retailing System with Customer Returns

A plethora of retailers have begun to embrace a dual-channel retailing strategy wherein items are provided to consumers through both an online store and a physical store. As a result of standards and competitive measures, many retailers provide buyers who are unhappy with their purchases with the ability to achieve a full refund. In a dualchannel retailing system, full reimbursements can be done through what is called a crosschannel return, when a buyer purchases a product from an online store and returns it to a physical store. They can also be done through what is called a same-channel return, when a buyer purchases a product from a physical store and returns it back to the physical store, or purchases a product from an online store and returns it back to the online store. No existing research has examined all common types of customer returns in the context of a dual-channel retailing system. Be notified that the practice of cross-returning an item purchased from the physical store back to the online store is not common. Thus, it is not considered in this dissertation. We first study the optimal pricing policies for a centralized and decentralized dual-channel retailer (DCR) with same- and cross-channel returns. We consider two factors: the dual-channel retailer’s performance under centralization with unified and differential pricing schemes, and the dual-channel retailer’s performance under decentralization with the Stackelberg and Nash games. How dual-channel pricing behaviour is impacted by customer preference and rates of customer returns is discussed. In this study, a channel’s sales requests is a linear function of a channel’s own pricing strategy and a cross-channel’s pricing strategy. The second problem is an extension of the first problem. The optimal pricing policies and online channel’s responsiveness level for a centralized and decentralized dual-channel retailer with same- and cross-channel returns are studied. Indeed, the online store is normally the distribution centre of the enterprise and is not limited to the customers in its neighbourhood. Also, the online store experiences a much higher return rate compared to the physical store. Thus, it has the capability and the need to optimize its responsiveness to customer returns along with its pricing strategy. A channel’s sales requests, in the second problem, is a linear function of a channel’s own price, a crosschannel’s price, and the online store’s responsiveness level. The third problem studies the dilemma of whether or not to allow unsatisfactory online purchases to be cross-returned to the physical store. If not properly considered, those returns may create havoc to the system and a retailer might overestimate or underestimate a channel’s order quantity. Therefore, we study and compare between four vi different strategies, and propose models to determine optimal order quantities for each strategy when a dual-channel retailer offers both same and cross-channel returns. Several decision making insights on choosing between the different cross-channel return strategies and some properties of the optimal solutions are presented. From the retailer’s perspective of outsourcing the e-channel’s management to a third party logistics and service provider, we finally study three different inventory strategies, namely transaction-based fee, flat-based fee, and gain sharing. For each strategy, we find both channels’ optimal inventory policies and expected profits. The performances of the different strategies are compared and the managerial insights are given using analytical and numerical analysis. Methodologies, insights, comparative analysis, and computational results are delivered in this dissertation for the above aforementioned problems