Table of Contents
|Content | |Page | |Executive Summery | |3 | |Situation Analysis | |3 | |Problems Found in Situation Analysis | |4 | |Strategic Alternatives for Solving Problems | |7 | |Selection of Strategic Alternative & Implementation Plan | |8 | |Appendices | |9 | Executive Summary:
A&D has decided that, to remain competitive, they must create an online shopping site that allows their customers to order their products over the internet. Their decision to have the site up and running in time for the Christmas shopping season has only given them 150 days, including the weekends, to achieve the task, which has been calculated out at 555 days based on the tasks involved. Due to the severe price restrictions that will be realized if they attempt to complete the site using extra assets and overtime, the Build decision is the wrong one for the short term. Since the Buy option does not fulfill their overall needs, and the Build option will take too long, A&D should pursue a Buy and Build plan, with the Buy being the option that best fits their needs in the short term until they are able to Build their own custom site. Situation Analysis:
• Sells computer products, accessories, and services to consumers and businesses • Started by Ted Walter in Nebraska in 1988
• In 2000, they had revenues approaching $400 Million
• Sales are primarily through their retail outlets and over the phone • Orders handled by call center
• Before 1999, sales orders written on paper and passed to order-entry clerks o Added time to order, delayed shipment
o Poor accuracy- 30% orders required customer callbacks as compared to 5% at competitor • Implemented ERP in 1999 using software from JD Edwards o Could be customized to handle different parts used for production o Customer callbacks reduced to < 1% of the orders
o Concerns about maintenance as outside consultants were employed to design and build the system • In 2001, A&D further invested to improve its systems in handling supply chain, payment process, CRM and order management o Reduced costs
o Significant ROI on its supply chain and warehousing projects • Faced with tough competition and decreasing margins, company decided to explore new segments for growth • Products approaching commodity status – product cost largely the determining factor • Project to create online store
• Chris Johnson, Technology Project manager, tasked with creating the online store. • Store had to be up and running before the Christmas shopping season. o Timeline therefore set from early May to October, giving only 5 months
Various problems faced A&D in their initial decision as to how the online store should be set up. Build vs. Buy – There were some options where the company could purchase an online store utility rather than build one form the ground up themselves. The decision as to which was better included various factors that led to their final decsion.
• The purchased version was cheaper in the intial stages due to there being no need to spend the money on development and programming. • The purchased version would have most of the required functionality already developed. • New versions created by the developer could be purchased without the need to develop in house. Con Buy:
• Expensive to buy.
• Some functions...