Catatech Industries: The Question of Electronic Commerce - Case Study Example

She faces the dilemma of bringing this to the CEO and if he agrees, taking responsibility for the development of an online retail outlet that can compete with those who have already established their presence. The objectives of the firm are to be an international business with a healthy cash flow that is supported by steady growth. Their sales model was based upon an experienced sales force, often former electricians, who could market their products directly to buyers through their own knowledge of the items they sold.

The company prefers to stay the course because up to this point it has been a successful strategy for the company. The CEO Carlos Fernandez does not see the future of the importance of the internet, but Marisa Rivera, CIO has seen the implications of internet marketing on competition forces. The company is not against progress as it has a thriving IT department that has facilitated integrated systems for inventory and sales. Marisa’s objective is to supply Carlos with enough information to sway him towards deciding to create internet sales opportunities in order to compete with other suppliers who have already entered into that market (Kaull, Anderson, 2003).

What Marissa is trying to accomplish now is to help Carlos to decide to place the company on a new marketing course where the internet acts as a conduit between the supply and the demand. The problem that will be faced in trying to accomplish this goal is that it will diminish the capacity of personalized and direct sales impact to influence the consumer. The financial savings for selling via internet means a difference between the average cost of email contact being $.10 in comparison to the average cost of face-to-face selling being about $250.00. Technology provides a much more economic method of contact to the consumer (Thomas, 2008, p. 89). The traditional sales force is a costly part of the process of sales and this will have an impact on how the decision changes when faced with proof of competition on the internet that likely represents lost sales.

The outcome, however, would not only be measured in terms of the cost difference that comes from internet sales in comparison to direct sales. There are a number of different measures that would be useful in seeing whether or not the decision to create an online presence would be beneficial for the company. The first measure is the obvious measure of the sales opportunity cost per sale. However, the second measure would be in developing a measure for consumer satisfaction based on the difference between ordering a product without personalized attention in comparison to ordering a product that has been demonstrated and explored with the help of a sales professional.

Because the company has a conservative approach to change in relationship to their business processes, this shift from personalized attention to unguided purchases could damage their reputation if that personalized service was no longer a part of their sales process. On the other hand, the threat posed by other companies that have online services that Catatech Industries did not have could devastate their cash flow. The internet has impacted the nature of business, not only by changing the structure of sales, but also by changing the s