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1. Recommendations

1.Implement ERP system that allows for proper bidding, adequate estimate shipping costs, and a secure payment method that inspires trust.

2.Establish CRM system to protect Sotheby's reputation. The brand should be taken care of accordingly to Sotheby's standards of service and quality. Prevent customer confusion and protect brand name. Operate a toll free number to adequately service customers. Promote a feeling of intimacy at the click of the mouse through the use of "space planner", "personal stylist" and "gift selector".

3.Use separate strategies for the different business units making "in-store-auction services" available online. Provide customers with incentives to do business online. Establish profit centers for the different e-businesses.

4.List auctions and set prices adequately.

2. Rationales

2.1. Technically suitable website

ERP implementation has top priority in preventing loss of brand reputation.

To ensure high quality of customer service and transaction clarity it is necessary to integrate departments and functions across and onto a single computer system that can serve the different departments' particular needs. External consultants and freelance web developers may be used for specific parts of the project but the project team will conduct the majority of the work. This will ensure that the site can be extended and maintained by Sotheby's own staff, and the copyright for the new technologies will rest with Sotheby's.

Adequate estimation of shipping costs important to prevent "surprise factor".

Once a product or a lot has been registered for sale online, dimensions and weight will be considered prior to the bidding process in order to provide customers with an accurate estimate of its shipping cost "anywhere in the USA". Customers in other countries will have the option to click on the "S&H" icon, feed it with the dimensions and weight of the object, and the country of destination to get an immediate estimate that will reflect the actual S&H cost to 90% accuracy. To achieve this objective, management at Sotheby's will outsource a shipping service company that will take care of this process prior to auctioning the product.

Secure payment method is a key factor for successful online operation.

Sotheby's customers are in the "high-end segment", and therefore Sotheby's website is subject to hackers and other e-thieves. To encourage customers to bid online without concerns about fraud and privacy issues a number of security technologies will be used: encryption of important network data, firewall system to prevent hackers and virus, automatic backup system routine, secure electronic transaction system (SET). The use of SET is for the secure transmission of credit authorization and payment method over the Internet and other electronic networks, which can protect and secure customer credit card details. In order to prevent any unexpected damage to the system or attacks by hackers, the design of the server will establish an automatic backup routine. The backup data will be saved at another backup database.

2.2. Establishment of a CRM system to Sotheby's standards.

Create clear business model

The e-auction operation at Sotheby's will be developed as an in-house division. Sotheby's will follow a pure e-tailing business model. This model will ensure the management team focuses on the core activities that will achieve the business objective -auctioning goods to customers. The e-auction operation will function as a new channel for the existing business operation. As a consequence, the e-auction venture will require close integration between offline and online divisions.

Attach brand reputation to e-auctions by providing personal service.

Leveraging the existing brand reputation will be a crucial success factor and serve as a significant barrier to entry for new competition once Christy's decides to compete in online...
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