1. What role does service play in the current distribution strategy for Ahle?ns and how does the internet change this?
In retail industry the distribution and the supply chain of a company play an essential role in order to keep the stock fresh and the shelves filled with products which are in sync with the requirements and demands of the company. The physical stores are refilled by the stock based on the sale, the manger and the store employees are responsible for the services that are associated with the distribution process. The manager sends stock messages to the distribution centers in order to restock the inventories according to the sale (Laudon & Traver, 2013). The nature of the item play an important role in the supply chain as perishable goods cycle are more frequent than that non-perishable goods. Effective internal communications play a significant role in the distribution strategy. On the other hand, in the online portal the process is automated and the end customer play an important role in the distribution as the process of delivery is also in the distribution strategy. There are various services that are associated with the distribution are: dispatching the order on time and as according to the on-time delivery, monitoring the quality of the product before dispatching etc (Laudon & Traver, 2013).
Channel management is essential for an organisation as it helps the company to manage its marketing and sales. The process helps in developing a program for selling and providing premium services to the customers within a specific channel (Moatti et al., 2014). Thus it is essential for Ahlens to adopt the strategy in the e-business as the venture is new the company will need to focus on the customer needs and developing according to the customer requirements. There are several challenges in the process of e-commerce like return policy, payment issues etc therefore it is important for the company to plan according to the channel, the organsiation has already set up an IT support for the venture but this has to be constantly upgrading as with the help of the customer feedback and with experience the company will have better understanding in the process.
Firstly, for an organisation that has been traditionally operating in the physical format will have internal conflict as the employees are used to working in a particular format there is also internal competition due to the new channel of function. Another conflict that may arise is operational conflict within the business function and distribution and supply is the function that may impact the business at the starting of the venture, time issue and mismanagement is going to be cause of conflict. The internal conflict among the employee of the organisation may arise an issue and make the relationship in between the dealers and the organisation also vulnerable (Fernie & Sparks, 2014).
There is intense competition in the online market and this is the major threat for the company. Most companies that have a physical retail history are moving in to the online platform as the consumer behavior towards shopping is evolving with technology therefore there is intense competition in the market (Fernie & Sparks, 2014).
Ahlens is a large scale organisation and the company has the resource and capabilities to overcome the operational conflict and focuses on the efficiency of the process as well as the quality of the service (Ahlens.se, 2018). The company can use TQM as an approach in the new channel of operation and ensure that the quality in the product as well as in the process is maintained throughout. In order to reduce the internal conflict among the existing employees the Ahlens is companies that can employee new people to join the online team with existing leaders to manage the team.
Ahlens is an organisation that strives to keep up with the dynamics of the external business environment and this is something that is important for the organisation’s growth and development. The online presence will help the company establishes the wide range of products that are available with the company. In a physical store there are more chances for a particular item to be out to stock, but the same product can be easily found in the online store therefore making sure that the customer is not switching the service for other competitors (Fernie & Sparks, 2014). Online stores will help in providing the customers with personalized services which are unavailable in the physical stores. The stores will focus in collecting information from the customers and try to convert them in to loyal customers (Laudon & Traver, 2013). Depending upon the nature of the product, the consumer preference of the mode of buying changes and thus negatively impacting the offline stores sale (Chaffey, 2015).
Ahlens.se (2018). The department store with a smart mix. [online] Ahlens.se. Available at: https://www.ahlens.se/cms/in-english [Accessed 11 May 2018].
Chaffey, D. (2015). Digital business and E-commerce management. Pearson Education Limited.
Fernie, J., & Sparks, L. (2014). Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan page publishers.
Laudon, K. C., & Traver, C. G. (2013). E-commerce. Pearson.
Moatti, V., Ren, C. R., Anand, J., & Dussauge, P. (2015). Disentangling the performance effects of efficiency and bargaining power in horizontal growth strategies: An empirical investigation in the global retail industry. Strategic Management Journal, 36(5), 745-757.
Savrul, M., Incekara, A., & Sener, S. (2014). The potential of e-commerce for SMEs in a globalizing business environment. Procedia-Social and Behavioral Sciences, 150, 35-45.