Analyze J&R Electronics using competitive forces and value chain models. What is its business model and business strategy? How does it provide value? •
J&R’s use of Loyalty’s Labs’ Blue Martini software is a classic example of Michael Porter’s approach to using the internet as an “enabling strategy” and as a “complement to and not a cannibal of traditional ways of competing”. Unique visitors are customers that go directly to the J&R site versus arriving through another site. Once there, J&R offers these customers loyalty purchase discounts and a chance to see what differentiates J&R from other sites. Since online consumer electronics retailers essentially sell the same products, J&R is working hard to differentiate itself in any way it can and avoid getting caught in a price war, even though they are competitive on price. J&R would like to sell to, and retain customers by showing them how knowledgeable their sales staff is, how rewarding their loyalty program is, and how cutting edge they are in receiving new technology earlier than other electronics retailers. These are the values that made J&R great before e-commerce was important, and these are the business benefits that are realized by using such a flexible and powerful CRM platform such as Blue Martini.
What is the role of the Internet in J&R’s business strategy? Is it providing a solution to J&R’s problems? Why or why not? •
The role of the internet in J&R’s business strategy is very important. The two specific problems were that J&R needed to differentiate themselves on the web by maximizing the values that had always made them a great “brick-and-mortar” business. Second, the company needed to find a new CRM solution to replace their existing system that was no longer being supported as the manufacturer had gone out of business. J&R needed to find a way to keep loyal customers coming back and to attract new customers to their site through a loyalty program. They got into a more professional...
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