1) What was AlphaCo's issue(s)? 2) How did AlphaCo address their issues? 3) After reviewing this case study, what lessons did you learn from AlphaCo? How can you apply those lessons learned to your small business? AlphaCo is a successful apparel retailer that has developed from a catalogue-based background. The majority of the company's turnover is generated from its original mail based catalogue sales market, although the company now has four physical stores, indicating a stronger move into the physical retailing area. AlphaCo started with a conservative approach to the Internet, their strategy being to develop a basic Web site for the purposes of testing the market and raising brand awareness. Old Paradigm In the 1990s, the company identified that interaction with both suppliers and customers using Internet technologies was a critical area of development if the company was to grow on both a local and global scale while keeping costs down. Customer interaction through an Internet retail channel offered a valuable opportunity to develop into the electronic commerce area while generating revenue. The company felt it was well placed to take advantage of the Internet through leveraging the existing supply and distribution infrastructure established for its traditional sales channels. An initial review found that the company's information technology infrastructure was unable to support a comprehensive move into electronic commerce. Initially, a simple Web site presence was developed to investigate this emerging area and to raise existing customers' awareness of the Internet and the possibility of a new sales channel. The company viewed a lack of computer literacy among its core customer base as a limiting factor that could affect growth. Rather than educate its core customers, the company has chosen to allow the natural development of skills to take place in the market. New Paradigm By 2001, the focus shifted towards infrastructure development to support the Internet development. The company initiated a major investment project that involved the replacement of the existing internal systems with re-engineered information systems and business processes that would allow the company to operate as an integrated channel retailer. The company's Web site is being developed into a complete online sales channel, integrated with the company's retail presence and call centre in the overall business strategy. Approximately ten percent of the total turnover is now generated through the Internet sales channel. Capturing additional customers and shifting existing customers from the catalogue to Internet also proved to be benefits of this approach.
1) What was AlphaCo's issue(s)?
2) How did AlphaCo address their issues?
3) After reviewing this case study, what lessons did you learn from AlphaCo? How can you apply those lessons learned to your small business?
AlphaCo is a successful apparel retailer that has developed from a catalogue-based background. The majority of the company's turnover is generated from its original mail based catalogue sales market, although the company now has four physical stores, indicating a stronger move into the physical retailing area. AlphaCo started with a conservative approach to the Internet, their strategy being to develop a basic Web site for the purposes of testing the market and raising brand awareness.
Old Paradigm
In the 1990s, the company identified that interaction with both suppliers and customers using Internet technologies was a critical area of development if the company was to grow on both a local and global scale while keeping costs down. Customer interaction through an Internet retail channel offered a valuable opportunity to develop into the electronic commerce area while generating revenue. The company felt it was well placed to take advantage of the Internet through leveraging the existing supply and distribution infrastructure established for its traditional sales channels.
An initial review found that the company's information technology infrastructure was unable to support a comprehensive move into electronic commerce. Initially, a simple Web site presence was developed to investigate this emerging area and to raise existing customers' awareness of the Internet and the possibility of a new sales channel. The company viewed a lack of computer literacy among its core customer base as a limiting factor that could affect growth. Rather than educate its core customers, the company has chosen to allow the natural development of skills to take place in the market.
New Paradigm
By 2001, the focus shifted towards infrastructure development to support the Internet development. The company initiated a major investment project that involved the replacement of the existing internal systems with re-engineered information systems and business processes that would allow the company to operate as an integrated channel retailer. The company's Web site is being developed into a complete online sales channel, integrated with the company's retail presence and call centre in the overall business strategy. Approximately ten percent of the total turnover is now generated through the Internet sales channel. Capturing additional customers and shifting existing customers from the catalogue to Internet also proved to be benefits of this approach.
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