Chapter 5: B2B Strategies

1.      Become familiar with RFID technology and its potential uses in Harley- Davidson’s supply chain using the information presented in this chapter and information you obtain through the Online Companion links, your favorite search engine, and your library. In about 400 words, evaluate the advantages and disadvantages for Harley- Davidson of replacing its bar codes and scanners technology with RFID.

HARLEY DAVIDSON—RFID Evaluation

Radio Frequency Identification Devices (RFIDs) are small chips used to track inventory through radio transmissions and are powered by radio signals similar to that of a cell phone. This technology is fairly new, but quiet advanced in comparison to bar codes. Unlike bar codes, RFIDs do not have to be visible for scanning. They can be scanned through boxes, over product materials, and from far ranges.

Using RFID technology can greatly benefit Harley Davidson. RFIDs can track inventory much faster and in real-time due to its scanning capabilities. This helps to manage inventory by making sure that items are stocked accordingly. It also improves processing time in terms of ordering needed supplies. Last, since RFIDs have read and write capabilities unlike barcodes, mistakes are less likely and maintaining accuracy is consistent.

However, RFIDs do have its flaws. Since its technology is just beginning to rise in popularity, the cost of implementing RFID in a company like Harley Davidson would be high. Harley Davidson would need to support not only their own massive inventory, but also deal with hundreds of suppliers in providing RFIDs and scanners.  There is also the issue of reliability. Since scanning capabilities rely on radio signals, just as a cellphone could lose signal, so can an RFID. Also, in terms of signals, there is always the possibility of security. Implementing a secure network could be costly.

3.      Develop and present a timetable for the adoption of RFID technology with specific recommendations on where Harley- Davidson should first implement it. For example, RFID tags could be installed in motorcycles as they leave final assembly, in various parts before they are shipped from suppliers, or in subassemblies as they are created at various Harley- Davidson manufacturing operations. Justify the time delays you propose in the adoption of RFID at each stage of the supply chain.

I recommend that Harley Davidson first implement the RFID technology with its Franklin Distribution Center in Wisconsin. This center is responsible for more than 22,000 parts and 36,000 locations. By implementing the technology with this center first, it not only familiarizes Harley Davidson’s main distribution center, but it also allows them to educate the 36,000 locations that they manage.  I would estimate the training to be completed within 1-3 years. Delays could be due to the amount of locations needing training as well as transition time needed from the familiarity of bar codes to RFIDs. During the same time, I recommend that the Harley Davidson Dealer Systems located in Ohio work with the Franklin Distribution Center for training and inventory success. With H-D Dealer Systems responsible for providing technical tools, training, and support to U.S. dealers, expanding the technology within the Harley Davidson chain would be much quicker.  After training and implementing the RFIDs within the two centers, I recommend that the RFIDs be distributed to the five Harley Davidson U.S. Operations facilities. Here, RFIDs can be placed during final assembly.  The transition to the new assembly procedure could pose delays, but I estimate that within 2 years, RFID procedures will be established making the implementation of RFIDs with Harley Davidson total from 3-5 years. 

Source: www.harley-davidson.com

Chapter 4: Marketing

E1. Visit FTD.com to examine how that company implements occasion segmentation. Write a report of approximately 200 words in which you describe two clear examples of occasion segmentation on the site and explain why an online florist would mix occasion segmentation with product segmentation rather than use one or the other separately.

When first entering FTD.com, the first thing I notice is a colorful bouquet of flowers and large text that says, “Make their BIRTHDAY beautiful.” That alone, shows occasion segmentation because it links a “specific time or occasion” to their product. Other than that homepage ad, FTD.com also has a drop down button and sidebar buttons options for specific holidays or occasions. Each occasion have gift suggestions such as flowers, food, and teddy bears, which associate best with that occasion. These examples of occasion segmentation allow viewers to associate their occasion interest to specific products.

However, I believe an online florist would benefit more in mixing occasion segmentation with product segmentation. With florist, the product focus is the flowers. The focus is not a birthday, an anniversary, or a holiday, it’s the product itself. In using occasion segmentation on its own, viewers would only associate flowers to an occasion, thus only making profit when an occasion arises. If product segmentation is implemented as well, a viewer first assumes that the product is a beautiful bouquet of flowers meant for anything and anyone.  

C2. Montana Mountain Biking

1.       Review the five stages of customer loyalty shown in Figure 4- 4 and prepare a report of about 200 words in which you classify MMB’s customers. Estimate the percentage of MMB customers who fall into each of the five categories. Support your classification with logic and evidence from the case narrative.

According to the five stages of customer loyalty, I believe MMB’s customers lye mostly in the commitment category. If I were to estimate their customer percentage in regards to all the stages, I would assume these percentages:

Awareness:         20%

Exploration:        15%

Familiarity:          15%

Commitment:      65%

Separation:           0%

I estimated MMB’s commitment rate at 65% because the narrative stated that out of their current customers 80% were repeat riders. This also meant the other 20% would have to be in the familiarity group because they were now experiencing MMB, making it more likely for them to try MMB again. However, there current customers cannot fill up all the stages so I decreased the percentage in proportionate to what I assumed the other stages rates were. I came up with 20% as their Awareness rate because with the amount of advertising MMB spent in magazine ads, I would assume many people have seen them to associate their name to Mountain Biking. Also, it was stated that the MMB logo was well-known in the upper Mid-West, thus having more awareness rating. I then left the remaining 15% to Exploration because of the new website traffic as well as email inquiries. Last, I did not enter any Separation rates because it seemed as though many customers who chose MMB were determined to stick with MMB.   

2.       In a report of about 200 words, recommend an e- mail marketing strategy for MMB. In your recommendation, consider the results of MMB’s earlier print mail advertising campaign, your answer to the first requirement, and the potential offered by permission marketing.

I would suggest combining content and advertising as far as email marketing for MMB. With the popularity of the MMB photos in mind, I think it would be best to include them in a newsletter. This way, MMB not only shares photos and experiences that interest the recipient, but also allows the recipient to associate them to MMB. Below the newsletter, MMB should provide a mountain biking tour registration link as well as a link to the website. Creating this newsletter with the links would allow more traffic for potential customers.

If MMB were to stick with their print advertising, they would spend more printing the ads then they would in gaining profit from those ads. With email marketing, there would be no cost in printing because everything is done online. This would save advertising cost as well as provide a low-risk of lost in terms of return revenue. However, if MMB opted for just permission marketing where only recipients who were already interested asked for emails, MMB’s efforts to expand their market would be limited. Using the email marketing strategy I suggested would bring in potential customers of a wider interest such as the photos not just mountain biking tours.  

4.       Prepare a report of about 500 words in which you outline an affiliate marketing strategy for MMB. Include a description of the types of Web sites that MMB should attempt to recruit as affiliates, and present at least five examples of specific sites that would be good referral sources.

MMB Affiliate Marketing Strategy

An affiliate is a web site, which promotes another company’s product(s) in order to get click-through sale revenue. Since MMB mainly sells one product, which is Mountain Biking Expeditions, MMB could serve as an affiliate site to related products. Products which relate to MMB would be Mountain Bike Gear, Apparel, and Accessories. 

The best way to set up an affiliate is to join their program then add the linked product images to MMB’s website. MMB should also provide products with good reviews in order to have higher click-through sales. I would also suggest having monthly MMB product picks that can be added to an MMB newsletter. This way, MMB can market directly to interested customers as well as the usual website traffic.

                Five affiliates I would suggest are REI, Sports Authority, Dick’s Sporting Goods, JensonUSA and Great Outdoors. All of these companies sell related products and most of them also promote outdoor activities where there products can be used. This is beneficial for MMB because not only can MMB gain revenue from affiliate sales, but also create a partnered advertising format.

                From all the affiliate suggestions, I highly recommend that MMB affiliate with REI or Great Outdoors. REI is a popular outdoor products chain and I believe associating with such a well-known company would help boost MMB’s popularity as well. Plus, REI has a large inventory of cycling products, which would allow more options for customers.  

Although the Great Outdoors is neither as popular nor have as large an inventory as REI, they do have the benefit of promoting MMB towards their viewers. Great Outdoors not only sells Outdoor Gear, but they are also an Outdoor Resources and News Website. They link information such as tour events, pictures of tours, and tips when taking a bike tour. MMB associating with Great Outdoors would help establish them on their website and perhaps link future tour photos and news to MMB.      

Chapter 3: Revenue Models & Web Presence

E2. Evaluate the usability of two Web sites that sell large- screen LCD high- definition televisions. A list of links to companies that sell this type of product is included in the Online Companion for this exercise, but you may use other sites if you wish. In your evaluation, compare the sites on how easy it is to learn about the product and purchase the product. Your report should include a section of about 200 words in which you describe the criteria you used in your evaluation, a section of about 300 words that summarizes your findings, and a section of about 100 words in which you present your conclusion.

LCD HDTV Website Evaluation: BestBuy.com vs. hhgreg.com

In evaluating these two websites, I used Dr. Nielson’s five components in testing usability. The five components are the following:

1.       Learnability—learning the design to easily accomplish basic tasks for the first time

2.       Efficiency—quickly perform tasks

3.       Memorability—easy to remember tasks when returning to the site

4.       Errors—amount of errors a made and whether it is easy to fix those errors

5.       Satisfaction—pleased with the use of the design

When first entering BestBuy.com, navigating was very easy to learn because it’s right at the header in big, distinguishing text. The main buttons have a drop-down menu, which helps to narrow the user’s options. Although, it took me about (3) clicks before I could even get to the TV listings with the amount of narrowing options. Once I got the listing though, it was fairly easy to find the best options with all the search tools they provide. They have a “sort by” drop-down that list the user’s options by Price, Brand, Best Sellers, and New Arrivals. To the left, there are also narrowing selections such as Size, Features, Resolution, and several other specifications. The list itself is very well organized as well. Each product contains an image, the price (red sale price distinction), and a brief description of the item.

When I returned to the site the next day, it was just as easy to start my TV search as the first time around. I did not personally encounter any errors, but judging from the application they use in order show graphics and video, some users may face accessibility options if the so not have a flash application installed to their browser. However, it can easily be fixed by approving a free flash installation.

Overall, I would say that my experience with BestBuy.com was satisfactory. The website design was consistent, attractive, and well-organized. Searching for an LCD HDTV was as easy as typing it into the search bar, clicking through the menu options, or even using their very own TV Finder application. If I did purchase a TV from them, I would feel safe as well because the site is trusted by (2) certified companies, cybertrust and TRUSTe. In the end, the site succeeds in selling to the customer.

When first entering hhgreg.com, navigating was a lot easier than BestBuy.com, but that was mostly due to the fact that they had less of an inventory. Their navigation was also located at the header and each product type had a button. Each button also had drop-down menus to narrow the search. It was a lot faster to get to a TV listing with hhgreg.com with only (2) click options. However, the listing was not nearly as organized as BestBuy.com. They did not provide a sort option and only had (3) narrowing options, which was by Category, Brand, and Price. Also, while the listing had the same format with picture, price, and description, the option of availability and shipping was not as advanced as BestBuy.com. BestBuy.com gave real-time location and delivery date estimates while hhgreg.com only had a check mark of whether Pickup and Shipping were possible for the product. The user would then have to directly call the store located near them to get specific inventory info and shipping costs.

Overall, although hhgreg.com has a simpler design with an easily memorable navigation and minimal possibility for error, the website did not compare to BestBuy.com. The overall layout was aligned to the left so that there was a lot of white space to the right, which made it look unattractive and unprofessional. The colors were consistent, but it was an amateur design for a company promoting technology. However, it was secured by McAfee, which is a well-known company, but certified by a lesser known Network Solutions. I wouldn’t feel as uncomfortable purchasing a TV on their site as I would with BestBuy.com. Although, searching for an LCD HDTV was just as easy as BestBuy.com. In the end, I would have to say my experience with hhgreg.com was less satisfying than using BestBuy.com.

C2. Prepare a comprehensive report for Mario in which you outline and analyze the possible revenue models that ASIB might use for its Web site. You should address the two journals as separate issues. Your report should provide the basis for a presentation to the ASIB executive board and should include specific recommendations where possible.

ASIB Revenue Model Analysis

Attention: Mario

I understand that EBSCO has approached ASIB and proposed to manage the distribution of ASIB’s Annals of International  Business Journal. I believe taking this opportunity would be beneficial to ASIB. In terms of Revenue Models, this would be considered a digital content revenue model. ASIB would essentially be selling their Journal issues to EBSCO’s library, which academic and business institutions can subscribe to.  In doing so, ASIB would not only increase subscription traffic because of the popularity of EBSCO’s database, but also cut back on publication costs.

Looking at the numbers, printing alone would save $24,800. The cost to print yearly issues for all 600 subscribers of the Annals of International Business Journal cost $28,800. If ASIB were to take EBSCO’s offer, ASIB would only spend $4,000 a year ($1,000 * 4 issues) to produce PDF files of their journal. Managing these online journals would be just as cost-effective. Rather than have $35,000 a year worth of managing and maintenance cost, ASIB would decrease that cost down to $6,000 ($500 per month) saving ASIB $29,000 a year.

Choosing the digital content revenue would increase ASIB’s net profit four times more than what ASIB currently makes a year. With EBSCO proposing to pay ASIB $10,000 per year for access to their journal as well as $50 per subscriber, ASIB would be making an extra $40,000 a year ($10,000 + ($50 * 600 subscribers)).  If we add that cost to the $260,000 ASIB usually makes within a year in revenue. ASIB would have a total of $300,000 in revenue. However, since publishing cost is less with EBSCO, ASIB would only have to deduct $15,000 ($4,000 printing + 6,000 maintenance, + $5,000 publication editing) as oppose to their usual $204,800 publication cost. With the $15,000 deduction, ASIB would make a profit of $285,000. In comparison to the print publication profit of $55,200, ASIB would make an extra $229,800 in profit choosing the digital content revenue.  Taking all this into consideration, I highly recommend that ASIB accept EBSCO’s proposal.

As far as increasing revenue for ASIB’s International Business Today, I would propose for ASIB to take on the advertising-subscription mixed revenue model. With companies already expressing interest in establishing ads on ASIB’s website, ASIB could potentially increase advertising revenue by almost double. ASIB’s current advertising revenue is at $20,000 per year, but as estimated, at least $3,000 per month of revenue can come from web site advertising. This would increase ASIB’s total revenue by $16,000 ($20,000 + ($3,000 * 12)).

However, I understand that ASIB is concerned about losing subscribers using this model. My suggestion is that ASIB lower their online subscription rate in comparison to their print subscription. This way, people are more drawn to subscribe online than with print. If ASIB continues to post their best articles with the ads, the profit from the ads would make up for the lower subscription cost. Also, in using this technique, ASIB should advertise that when subscribing, less or no ads would be shown. This would definitely gain more subscribers. If successful, the total revenue along with the Annals of International Business Journal taking on the digital content revenue model would be $316,000. 

Chapter 2: Infrastructure

Review Questions:


RQ2. Describe in two paragraphs the origins of HTML. Explain how markup tags work in HTML, and describe the role of at least one person involved with HTML’s development. 


Hypertext was first introduced by Ted Nelson in the 1960's to describe a page-linking system. The concept of his system would allow one page to link text to other pages. In doing this, pages of information could connect from different storage locations. However, it was not until Tim Berners-Lee that Hypertext Markup Language (HTML) was actually developed. 
Berners-Lee created a set of codes that could connect to the hypertext server, which stored written HTML files. These set of codes, also known as tags defined the relationship between text and elements, allowing the creation of web pages. For example, one set of tags can designate text for a header element while another can designate text for a footer element, thus, allowing the server to extract those text into the header and footer of the visible web page.


RQ3. In about 200 words, compare the POP e- mail protocol to the IMAP e- mail protocol. Describe situations in which you would prefer to use one protocol over the other and explain the reasons for your preference. 


Both POP and IMAP e-mail protocols allow clients to send and receive e-mail as well as support Multipurpose Internet Mail Extensions (MIME), which are attachments such as documents, photos, and music. The Post Office Protocol (POP) runs on an email program, which connects to a server, while the Interactive Mail Access Protocol (IMAP) runs directly on the server.

With POP, the email program such as Outlook or Entourage acts as a post office where mail is delivered and sent out, while the server acts as the postman. However, without the postman (server), mail cannot be sent or received. Also, a client can only access and edit email by downloading it through the program as oppose to IMAP, which can be visible and worked on from any computer by accessing the online server.
For me, I prefer POP email when it comes to work because the only place I really need to view my email would be at work, therefore having it accessible to one computer is not an issue. Also, with the amount and importance of my correspondence, POP allows me to control storage space and location. However, I prefer IMAP email when it comes to school because it’s something I would want access to anywhere without having to download it to a program. 


RQ4. In about 400 words, describe the similarities and differences between XML and HTML. Provide examples of at least two situations in which you would use XML and two situations in which you would use HTML.


Like HTML, Extensible Markup Language (XML) derived from the original Standard Generalized Markup (SGML).  Both languages are currently managed by W3C and can be written in any general text editor or word processor. However, while HTML is a markup language with defined tags, XML is a framework with custom tags making it a meta language.

This custom markup was designed primarily for companies needing to share information online.  With ecommerce growing among companies, data such as inventory and price lists needed more support than HTML. Issues with HTML unable to handle large amounts of data lead to the creation of XML. With XML, data lists are visibly more organized and data management capabilities can easily maintain product information.

XML uses a database format by pairing start and stop tags to record data, but unlike HTML, XML tags are visible when seen on a browser.  However, while HTML files can directly display on a browser through a server, XML files must be converted by passing through another file, such as embedding it to an HTML file or other program in order to become visible.

Another big difference between XML and HTML is that while HTML defines the format and style of text, XML does not. Instead, XML provides the semantics or meaning of the text.  An example of this is best shown when designing a list such as a contact list:

<Contacts>

<Name = “Al”>

<Address>123 A Street</Address>

<Phone>123-456-7890</Phone>

</Contacts>

The root element of XML is “Contacts.” This describes the purpose of the contained tags. The contained tags are child elements, which relate to the root element. The child elements to “Contacts” are “Name,” “Address”, and “Phone.”  In using this example, we see that XML defines relationships between elements rather than manipulate it. Also, the tags used are custom and not regular HTML specified tags such as header tags. However, to avoid similar XML tags, companies have created tag standards such as DTD (data-type definitions), XML schemas, ebXML, XBRL, LegalXML, MathML, RosettaNet.

For me, I would prefer using XML if I were to post up my business card online or create an event. I could format the business card just like the contact list example. When creating an event, I could specify child elements such as Date, Place, and Time. With HTML, I prefer it when it comes to blogs or online newsletters because there is more formatting and styling required for article-style text. 

Exercise:

E3. Bridgewater Engineering Company ( BECO), a privately held machine shop, makes industrial- quality, heavy- duty machinery for assembly lines in other factories. It sells its presses, grinders, and milling equipment using a few inside salespeople and telephones. This traditional approach worked well during the company’s start- up years in the early 1990s, but BECO is getting a lot of competition from abroad. Because you worked for the company during the summers of your college years, BECO’s president, Tom Dalton, knows you and realizes that you are Web savvy. He wants to form close relationships with the steel companies and small- parts manufacturers that are BECO’s suppliers so that he can tap into their ordering systems and request supplies when he needs them. Tom wants you to investi-gate how he can use the Internet to set up such electronic relationships. Use the Web and the links in the Online Companion to locate information about extranets and VPNs. Write a report that briefly describes how companies use extranets to link their systems with those of their suppliers, then write an evaluation of at least two companies ( using information you have gathered in your Web searches) that could help develop an extranet that would work for Tom. Close the report with an overview of how BECO could use VPN technologies in this type of extranet. The three parts of your report should total about 500 words.

BECO Extranet Analysis

Objective: Establish extranet system in order to enhance business relations

Analysis

In understanding an extranet, we must first understand an intranet. An intranet is an internally connected network limited to one organization. Meaning, only the organization establishing the intranet can use that system in that location. However, an extranet is a network that can connect with other organizations beyond the established location.

Two extranet options to consider is a private network or virtual private network (VPN). A private network is established by a leased line, which connects two organizations by a telephone connection. In short, it physically connects one intranet to the other. While this makes for a more secure system because access to the connection is limited to the leased parties, it can be costly. Since BECO expects to connect with multiple businesses, a leased line would have to be established between each business. In considering BECO's growing factor, I would not suggest a private network because of the high expense, which will eventually be faced.

BECO's best option would be to use a VPN. A VPN uses a public network such as the internet to share data through a system called IP tunneling or encapsulation. It has the same capabilities as a private network except that rather than have physical connections between two companies, a virtual connection can be made between multiple companies. This connection runs through a secure passageway (IP tunneling) that allows companies to send and receive encrypted data in packets (encapsulation). However, in order to access a VPN, VPN software must be setup on BECO’s computers and any business’ computers BECO wishes to network with.

Although the software can be set up by any individual, I suggest that the software be set up by a specialist to ensure security and proper installation. In doing this, BECO should also consider creating a user list of every individual who will have access to the VPN. With this list, BECO can manage user login information as well as maintain control of who can access the VPN.   

I believe a VPN extranet system would be beneficial in BECO's goal because of the ability to share information directly with its partners in an instant. BECO can process orders, receive supplies, and update client information much quicker. This capability can maximize profits due to faster processing, thus being able to take on more projects at once. It can also decrease production time because of less wait for supplies. Finally, BECO can easily manage client information making it easier to consistently market towards those clients. However, those are just a few of the benefits of an extranet system. The benefits increase as we build more and more business relationships.

Suggested Vendors:

Verizon is a popular network service who offers three (3) VPN options: Dedicated, Broadband, and Remote. Dedicated option allows VPN access worldwide to more than 34 countries and can support a large network. Broadband option is more cost-effective because it is not on a global network, but can still support large networks on T-1 speeds. Last, Remote option is a basic VPN connection with IP-sec or SSL security. The benefit of Verizon is that they provide on-site installation as well as give options, which relates to our progression. BECO can start with the basic Remote option, but as it grows and perhaps become global, BECO can upgrade to a Dedicated option.

OverPlay is specifically a VPN provider, who have high reviews in www.vpnreviews.com. OverPlay provides access to worldwide VPN servers at a low cost and can connect to many different platforms such as Windows, Mac, Linux, and even mobile platforms such as iPhone and Android. Installation is easy with step-by-step procedures, which unfortunately is not installed by them. Instead, BECO would have to handle the installation. The benefits of using this service is the low-cost, compatibility, and knowing that OverPlay's main expertise is on VPNs.