Case Situation: Existing Retailer Deciding to add e-Commerce Channel

Decision to Outsource Development of e-Channel

Current status

Strengths:

Primary strengths and comparative advantages:

Buying, merchandising, logistics, finance

Excellent in-store and buying/logistics IS capabilities

Excellent balance sheet and income statement

Industry leader in their category

Weaknesses:

Limited customer information

Limited amount of individual customer relationship management

Limited use of Internet

Limited use of external e-mail

e-Commerce Objectives:

Maintain profitability at current levels

Maintain retail store as primary sales point

Add e-commerce channel primarily for customer relationships

Buying, merchandising, logistics, finance to lead the project

Have new channel operable in 6 months

a. to fend off dot.com retailers (defensive) and

b. to show industry analysts the company will be “new economy” (stock valuation)

IS Capabilities:

Strong on in-store, POS and logistics

Formal planning and project management methodologies

Primary experience with in-house development

Limited use of software packages

Minimal experience with Internet, Intranet

Decision:

Outsource the project to develop the new e-commerce channel

Action plan and next steps:

a. IS

b. Project team of buyers, merchandisers, logistics, finance

c. Corporate executives

d. Outsource vendor proposals