Group 84

Link video: https://youtu.be/7l6jPIQfGBE

This project is about the Field Sales Retail (FSR) department of Unilever. FSR gathers data from 150 sales representatives on a daily basis. However, the department is facing some difficulties with data integration and data collection. Therefore, we decided to take a closer look at FSR’s current information systems and to come up with an innovative IT-enabled service that will transform their business.

The main value proposition of FSR is generated by realizing an optimal store floor execution. Their short term goal is to generalize more revenue by focusing on maximizing Unilever’s share of shelf space. The added-value comes from extra selling to customers, promotional activities and service in the stores. In order to know which promotional campaigns work well and which don’t, FSR needs data. FSR makes use of four main kinds of information systems to gather this data: Box App, Box.net, Planorama and Prime. The focus of this business case is Prime: a global application that keeps track of all in store activities of sales representative. The instability of the system results in mistakes in the financial household of the company, which then results in incorrect data and conclusions.

We interviewed several stakeholders to identify and further explore the issues which FSR is facing. Among them were the manager of the department, a former employee and sales representatives. The following problems regarding to Prime were identified: (1) synchronization often fails, (2) data can’t be processed when one or more variables are missing, (3) the system crashes often, (4) the team doesn’t get a notification when new data is available, (4) data can’t be changed after synchronization, (5) the system is owned by a third party, (6) the system is globally implemented and can’t be adapted to country-specific needs and (7) making a change to the system is very expensive and takes long to implement. These problems lead to data loss, inaccurate data, inappropriate data, employee frustration, slow decision making and communication flaws.

We recommend that Unilever will invest in a new system for FSR with the following features: (1) all four information systems are integrated, (2) the system is flexible and agile, (3) GPS, (4), automatic backups, (5) notifications in case of data updates and (6) a user friendly system. Although developing a system is very costly, we do expect that the annual increase in revenue will compensate. To make sure the development- and implementation process goes right we provide the following recommendations: (1) acquire a generous budget, (2) continuously communicate with higher management layers, (3) involve employees during the requirement specification, (4) start with a pilot before global implementation, (5) implement a valid security system, (6) specify compulsory data fields for global statistics, (7) provide user-trainings for all employees and (8) don’t work together with third parties, but keep the development process in-house. We believe that the mentioned features, combined with the managerial recommendations will lead to a huge improvement for Unilever.

Electronic markets and auctions – Group 84

Link video: https://www.youtube.com/watch?v=ZcPFT7M_5lQ

Everybody knows eBay and Amazon. However, what most people don’t realize is that these online marketplaces are affecting and transforming the entire retail sector. Namely, e-commerce technologies (i.e. online marketplaces) reduce consumer search costs, making it easier to compare different producers’ products and prices. On the supply side, e-commerce enables new distribution technologies that can reduce supply chain costs and improve service. Also, e-commerce is characterized by the electronic brokerage effect: by electronically connecting many different buyers and suppliers through a central database the need for both parties to contact a large number of alternative parties individually is deleted. This increases the number and quality of alternatives that can be considered and decreases the cost of the entire product selection process. However, compared to offline markets, online markets have more information asymmetry.

The electronic commerce movement continues to grow as more consumers embrace the convenience of shopping from the comfort of their homes through online platforms. Both eBay and Amazon stand out as major players in this marketplace. Amazon is the world’s largest online retailer. It became the most dominant player in the world due to their ability to offer the lowest prices, their strategically dotted delivery network, their progressive deals with postal services and their completely robot-operated warehouses. However, Amazon does not have free shipping costs and their immense amount of product categories might confuse consumers. Another successful e-commerce company is eBay. Ebay is the world’s largest marketplace due to its auction-based business model, global reach and economies of scale. However, eBay charges high fees and lacks a future growth strategy. Whereas Amazon is more focused on selling new goods for fixed prices, eBay’s products are mainly second-hand and sold by means of an auction. Also, Amazon is more buyer-oriented whereas eBay is more seller-oriented.

The amount of people connected to the internet has been steadily growing since the internet was created. We believe that this growth will continue, providing an advantage for the e-commerce industry. However, due to high fees and no clear strategy for the future, continuing success is not necessarily guaranteed for companies like Amazon and eBay. Their business models are relatively easy to duplicate and once established retail companies with physical stores have settled both online and offline, pure e-commerce companies might be in danger. After all, many customers still feel the need to see and touch (especially complex) products in real-life before purchasing them online to reduce product uncertainty. On top of that, it is less expensive and time-consuming to expand your business to online retailing than the other way around providing an advantage for currently offline but successful companies. These threats should be an incentive for Amazon and eBay to critically examine their business models and strategies in order to stay competitive in the future.

We all know the feeling. You just enjoyed a great dinner at a fancy restaurant with your friends when the worst part of the evening arrives: the bill. Should you all pay individually? No, the waiter won’t like it when all ten of you want to pay your own part by card. Should one person pay €400 by himself and wait for the others to pay? No, this is also inconvenient. There is always that one friend who ‘forgets’ to pay or ‘does not have money right now’ causing you to be broke before the end of the month. Luckily, the Dutch bank ING has the solution: Twyp.

Twyp is a new application by ING which allows you to split the bill and send a payment request to your friends on the spot by means of your mobile phone contact list. Your friends can immediately accept your request and pay the correct amount by confirming their identity through a pin code. It’s easy and quick! And this is only the first step towards future banking.

Due to the competition of FinTechs traditional banks feel the pressure to innovate at a rapid speed and offer their customers services which are not necessarily part of banking, but related to it and especially a luxury attribute. An example of this is the possibility of external apps to integrate the regular ING application or customer banking details in their application in order to improve customer experience. Nobody likes payments, so the easier it gets, the better. The same theory applies to entrepreneurs which will have the possibility in the near future to pay their bills within one click by ‘sending’ them to their bank.

It is clear that the above examples make life easier. However, they are also related to providing sensitive banking details to external parties. What effect does this have on security and peoples trust in their bank? On top of that, will it be enough to stay ahead of the FinTechs?

For decades the blockbuster strategy has been a popular approach in the media- and entertainment industry. According to this principle producers should focus their marketing resources on a small number of likely best sellers in order to maximize returns. Although this strategy is kind of risky ( what if your chosen ‘likely best seller’ doesn’t turn out to be a best seller?) the enormous profits you gain from a successful best seller should make up for the occasional losses from misjudgements. However, society has changed during the years and the problems which were tackled by the blockbuster strategy seem to be no longer relevant. Nowadays, due to the internet shelf space is endless and consumers seem to be no longer pleased by main stream products. These developments lead to the question: Is the traditional blockbuster strategy still relevant?

According to the paper ‘Should you invest in de Long Tail?’ by Anita Elberse (2008)
the answer to this question is yes. One would assume that successful companies are no longer the ones which focus on quantity, but the ones which pursue diversity. However, Elberse states otherwise. According to her the tail of the Long Tail (theory which states that our economy is shifting away from a focus on a relatively small number of “hits” towards a huge number of niches in the tail) is less profitable than one would expect. Her research points out that customers often still highly value top 10 suggestions and actual blockbusters. Therefore, Elberse expects that the blockbusters will remain the most profitable segment in the future.

On the other hand, there are many other papers and researches which state the opposite. They believe niche markets are the future and predict that future companies cannot survive without differentiation. According to them getting to know your customer and fulfilling their specific need is crucial which makes the blockbuster strategy outdated. To me personally this seems more plausible, but what do I know? Only time can tell.

Based on ‘Should you invest in de Long Tail?’ by Anita Elberse (2008)

References:
https://hbr.org/2008/07/should-you-invest-in-the-long-tail#
http://www.mt.nl/332/87173/business/anita-elberse-waarom-de-blockbuster-strategie-lonend-is.html
http://www.longtail.com/about.html