EBAGS: Managing Growth - Case Study Example

Case Study – eBAGS: Managing Growth Answer to Question No The brand products that are dropped-shipped from the manufacturers are confined with the primary business operation of eBags. These various branded products are all brought under one store location through effectively utilizing the internet. eBags, over the years, have grown successful due to this innovative business operation. Private label products, on the other hand, were introduced by the firm for satisfying the lower end of the market who demands reliable products at low costs.

The former products i.e. drop-shipped products are sold by the firm through online retailing and the latter i.e. private label products through the traditional business of retailing. The pros and cons of one form of the products are the cons and pros of the other. For example, in the case of online retailing or name-brand drop shipping products, eBags can reduce the cost of inventory holding through direct product shipping process from the vendors to the customers which is a disadvantage in the case of private label products where inventory is mandatory to hold.

Similarly, in the case of private label products, high profit can be earned along with building up of long-term trusted relationship with the customer due to its physical presence whish is not possible in the case of online relating. By sourcing globally, the manufactured products from the Asian manufacturers, eBags was being able to perform successfully with the private label products but problem aroused when it had to maintain inventory and the cost increased. While, on the other hand, in the case of name brand drop-shipped products, efficient performance of the firm in terms of logistics management is the most essential requirement.

Logistics should ensure order fulfillment through internet, inability of which can lead to business failures (Pearson Education, 2003). Fulfillment of orders in terms of timely payment from the customers, information holding regarding availability of products and building interactive relationship with the customers are easier in private label products. Possibilities of bullwhip effect are high in online retailing as information can get distorted while moving from one end of the supply chain to the other (Lee, Padmanabhan, & Whang, 1997).

A noticeable disadvantage of the private line for eBags is that it holds strong possibility for creating business inefficiencies. This is because in this case, orders are always shipped in large volumes to the customers. If the products get defected during shipment or few of the products deteriorate, then the entire order process can get cancelled by the customer. While, in case of online trading this disadvantage is modest as small volumes of products are shipped at one time. Another advantage of online shipping for eBags, which is a disadvantage for private lines, is that in the former case, customer reach is enormously higher than the latter.

Higher reach provides opportunity for high sales if logistics can be efficiently managed. Answer to Question No: 4 The European market of online retailing has been continuously expanding and report suggests that the expansion is expected to remain robust through to the year 2014. Sales through online retailing have been estimated to increase from 68 billion Pounds in the year 2009 to 114 billion Pounds in 2014, thus depicting a compound annual growth rate of 11% (Evans & Camuns, 2010). The greatest strength of eBags in terms of online retailing is that it is well acquainted with the functionalities of this industry and holds good grip upon this industry in terms of both knowledge as well as experience.

This strength of the firm can be effectively utilized for generating effective customer relationship management. However, generation of strong customer relation would demand incessant up-gradation of technology for finding out innovative ways of online business. For satisfying this demand in the sphere of creating customer relationship, profits that the firm is enjoying from its present growth of e-commerce can be utilized. Apart from looking after technological effective moves, Jon Nordmark is required to identify target market for its footwear products on the basis of the fact as to which segment of the customers have more access to the internet in the market in which they are operating.

Comprehensive market survey would generate figures related to men’s and women’s access to the internet. Value with respect to price and quality of products and convenience provision to the customers of online retail business would help eBags in positively driving the behaviors of the consumers while deciding about purchasing. More emphasis on the marketing aspects of online products with high-tech photography and complete demonstration will even add efficiency in leveraging the firm’s strengths.

The firm is also required to improve efficiency in its supply chain management as this aspect will add value to the enhancement of level of satisfaction from the customers and in turn will accumulate growth for the firm as a whole. Greater customer involvement in the online trading process, better executions of channel’s performance with cost effective inventory and means of shopping online through social networking sites are a few of the drives that Jon Nordmark can implement for expanding into the European and the footwear market.

References Evans, P. F., & Camuns, L. (2010). Western European online retail forecast, 2009 to 2014. Retrieved from http://www.forrester.com/rb/Research/western_european_online_retail_forecast%2C_2009_to/q/id/56543/t/2 Lee, H. L., Padmanabhan, V. & Whang, S. (1997). The bullwhip effect in supply chains. Retrieved from http://profit-chain.com/images/The_Bullwhip_Effect_in_Supply_Chains.pdf Pearson Education. (2003). Order fulfillment and logistics—an overview. Retrieved from http://wps.prenhall.

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