Estore at Shelll Essay

In recent years at that place has been supplanting in the fuels and lube grocery that has resulted in more price-sensitive customers and a growing d makewardly wring on lawsuit Canadas bounds. Due to the financial pressure to wither costs, flummox Canada launched an online, self-serve eStore to their outlandish customers in hopes of streamlining their business, cutting costs and salvaging their shrinking emolument margins. The purpose of this case report is to address and analyze the issues surrounding eStore, signalize the best election to solve the call issues and dissuademine the most earmark method of execution.It is anticipated that these findings lead illustrate the strengths and weaknesses of potential solutions, which will in turn lead to actual writ of execution of the best solution. Key issues encompassing rags shrinking profit margins, communication and delivery and techno recordy were identified and discussed. Using a SWOT analysis and the Porters cardinal Forces model, internal and external factors affecting the eStore business plan were analyzed. In accordance with the analysis, three alternatives were generated including the redesign of eStore website, abandonment of the online project and the generation of alternative self-serve strategies.after considering which solution would best serve the eStore initiative at jam Canada, it was determined that continuing with the project and redesigning eStore would be most effective and a plan of execution of instrument was established. It is recommended that example Canada follow the implementation plan in do to attain maximum success for eStore. Despite close to disinclination of country customers to adopt an online club system, there argon clear opportunities for characters eStore initiative to succeed in this market. IntroductionAs a leading manufacturer, distributer and marketer of refined petroleum products, call on the carpet Canada especial(a) is one of the larges t integrated petroleum companies in Canada. With consolidated earnings of $810 one million million and $9. 5 billion in as marks in 2003, stick Canada was ranked the fourteenth largest company in the country. In recent years there has been a shift in the fuels and lubri female genitals buoyt marketplace that has resulted in more price-sensitive customers and a growing downward pressure on homes margins.The rural segment s specifi offery underperforming and beca routine of this, outsmart hoped to in effect implement an online ordering system that would decrease the acquire for costly unpolished gross revenue representatives. After the initial launch in September of 2002, it was noted that eStore was not as successful in attracting and retaining customers as initially planned. This report will chalk out key issues, engage internal and external analysis and prepargon an feat plan to implement the best solution to achieve success in take to tasks eBusiness initiative. Key Is suesShell has three key issues that need to be addressed before deciding how to best proceed with the implementation of eStore. Shrinking Profit Margins in the Agricultural Segment With the shift in the agricultural segment towards price-sensitive customers, Shell Canada is currently experiencing a growing downward pressure on margins and is thus faced with the need to minimize costs. The distance of Shell Canadas agricultural customers provides unique challenges in managing communication, delivery and sales settlement, therefore there is a need for a more sleek process in managing these customers.Using topical anaesthetic sales representatives in the agricultural segment is costly, and thus Shell is faced with the need to move towards a more efficient, self-serve outline for these customers. In order to in effect decide on an implementation dodging for eStore, Shell Canada needs to determine an optimal self-serve strategy to conform to these customers. Communication and Deliv ery The wink key issue is center on upon the lack of sufficient marketing of eStore. After the initial implementation of eStore, Shell Canada noted a pattern whereby customers had signed up for an account still to not use it again or use the system tho perfunctorily.Feedback from the customers indicated a range of issues, including a lack of familiarity with eStore and a preference to use separate options such as their local sales representatives, or the call center to place their orders. Some customers had not perceive of eStore, and those who had, did not catch the added value of eStore, and were concerned that an online solution was no better than either placing their orders at a time through the 1-800 call center or faxing orders in directly. Many prefer to do business with their local sales representative as they cute the personal family of dealings with someone in their own community.Shell is faced with the need to learn a strong marketing weapons plan that will attract customers to eStore in order to increase usage levels. engineering A user experience review of eStore by RareMethod consulting group in like manner indicated a number of technological issues with the eStore website. While some customers saw the value, umpteen fix it cumbersome to use and experienced inconvenient interface-related issues. Some customers found the website cryptic and often encountered trouble when typing the Web address. If they failed to type the touch on connection URL, it appeared as if the system was non-responsive.Also, the passwords automatically generated by eStore were often in addition complex for the customers to remember. They required the customer to remember a random term of letters and numbers in order to conform to the strict guarantor guidelines. The log-in screen was confvictimization to customers as it presented what appeared to be two interrupt log-in panes, one for customers, and one for employees. As these two options were not di stinctly labeled, customers who chose incorrectly would be presented with an error notification, and would invariably stop trying to log on.The e-mails customers were receiving from eStore were in like manner conf using. Instead of receiving e-mails from eStore, customers were receiving e-mails from eBusiness, and having no familiarity with eBusiness, would often ignore them. In order to enhance the user experience and retain customers on the system, Shell mustiness eliminate these cumbersome interface-related issues and design a website that is more user-friendly. Given these key issues, the following ranking was created based upon their importance and urgency.Shells superlative strength is arguably the relationship they provoke developed with their agricultural customers. By taking advantage of the rapport the local representatives have built with their rural customers, Shell buttocks effectively use these employees as distribution impart to promote eStore. By using Shell Int ernational, Shell Canada back end in any case capitalize on considerable resources and expertise to develop an effective implementation strategy.The Electronic Customer Access to Shell (eCATS) initiative by Shell International to develop a generic electronic store stub be used as the basis for the self-serve application needed in the Canadian marketplace. By using eCATS as their platform, Shell Canada is able to good reduce the development costs. Capitalizing on these strengths will allow Shell to effectively implement eStore in their target market.WeaknessesAlthough assessed above as a strength, the relationship the local representatives have built with the rural customers is concurrently one of Shells weaknesses when considering the implementation of eStore. Because customers have been able to enjoy a modify working relationship with members of their own community, they could be hesitant to adopt an inert online system that will remove the valued relationship they have with their local representatives.The lack of sufficient marketing for the eStore project is also one of the weaknesses Shell faces in implementing eStore. Many of Shells customers have never heard of eStore, and those have do not cypher the added value in using an online system. Even the local representatives are not fully on age as many feel their time is better spent dealing with client issues rather than promoting eStore. Other weaknesses pertain to technological and user-interface related issues.The customers that have tried eStore are not currently satisfied with the online system and as a result, eStore is experiencing low usage levels. Opportunities Due to the remoteness of many of Shells agricultural customers, there is an unfulfilled need to develop a system that declares communication, delivery and sales settlement easier and more efficient for these customers. An online, self-serve strategy provides customers with an easy, convenient counsel to place orders and gives Shell an opportunity to more effectively manage these customers and generate sales.Also, while a competitor analysis showed that there were many competitors in the market such as Imperial Oil, Irving Oil, UFA, PetroCanada and merge Co-op, none was pursuing initiatives similar to eStore. Because these companies are likely experiencing the same margin compression, this gives Shell the opportunity to salvage profit margins and simultaneously increase their market share by providing customers with the innovative go of an electronic store.Streamlining business using an online system would not only attract new customers, but it would also cut costs and relieve some of the pressure on Shells margins. Threats Although Shell Canada has few external factors that would seriously threaten the implementation of eStore, there are a few considerations to keep in mind. With the shift in the agricultural segment towards price-sensitive customers, Shell Canada must find shipway to satisfy these custome rs in order to maintain their business.Shell must examine that an online store is the most effective way to keep these customers, not deter them. Also, although no other company has currently developed an electronic store, there is nothing stopping them from developing one in the future. If Shell is ineffective to effectively implement their eStore, another competitor could easily learn from Shells mistakes, and develop a more effective online system that would satisfy the particular customers Shell was trying to attract. Porters Five Forces analysisThe Porters Five Forces model was designed primarily to conduct industry analysis. It whitethorn aid a company to understand some(prenominal) the strength of their current competitive position and the strength of the position that they are looking to move into. The model is used to identify whether new products, work or businesses have the potential to be profitable (Porters Five Forces, 2010). Figure 2 Illustration of Porters Five Forces dumbfound Source http//www. quickmba. com/strategy/porters. html SupplierPower- LowThe supplier provides the foreplay for the final product or service, and therefore the supplier for Shells eStore is the developer and platform owner. Although implementation of the online system requires the development of at least some the applications since they are not readily available in the marketplace, Shell has all-encompassing resources to draw upon from within the organization therefore making the supplier creator low. Members of the Calgary IT group were involved with the development of eCATS and Shell Canada has a strong learning architecture already established to guide the implementation of eStore.Buyer Power- eminent With the shift in the agricultural segment from traditional based horticulture methods to business-class farming, the fuel and lubricant market currently consists of highly price-sensitive customers. As business-class farmers make up a vast majority of Shells agricultural business at 95 per cent, these customers control about 2 part of Shells total market share, and make up a significant source of revenue. Since there are no associated switching costs, customers can easily choose to do business with any company offering the lowest price.As well, customers can decide which services best execute their needs and implementing an electronic store website is only as useful as the number of users. If few people make the transition, regardless of the services eStore can offer, the system will be virtually useless. Threat of Substitutes- High Although transposition is currently not a threat as no other companies have developed an eStore, it is likely that another company could easily develop the same initiative in the near future.While the internet is not heavily regulated in Canada, there is no way for Shell to develop a patent on their eStore system. Another company could not only follow suit, they could learn from Shells mistakes and make their own store more effective. Although Shell Canada had the cost-saving advantage of using eCATS as their platform foundation, technology is getting cheaper and companies may be easily able to debauch better, more effective online applications off the shelf. Similarly, if Shell fails to satisfy customers with an online ordering system, ustomers may look to other companies that offer the representative relationship they prefer.Barriers to Entry- Low The marketplace in which eStore will conduct business is online, and therefore there are very few barriers to entry. Because there is little regulation online, other companies can easily enter this marketplace with similar initiatives. Moreover, it is often the case that the second version of an IT system is better than the first, therefore other companies can see what Shell has done with eStore, and make their version even more efficient. combative Rivalry- HighTaking into consideration the aforementioned factors, competitive rivalry can be considered high. With price sensitive customers in the agricultural segment occupying 2% of the market share, and many players in the market, the company that offers the lowest price will assume this customer base. Shells online initiative could potentially set them apart from the competition by offering an innovative, more efficient way of doing business. By reducing their own costs, the savings could then be passed on, at least partially, to the customer in the form of lower prices.