Case Study: The Snakes and Ladders Game in E-Business: Digital Transformation at American Hardware Depot
THE CASE OVERVIEW AND COMPANY’S HISTORY AND GROWTH
The American hardware Depot is a prominent American retailer, dealing in over 65,000 hardware and home improvement products. The main products of the company are garden equipment, electrical and plumbing supplies, house wares, hand tools, power tools, and other hardware. With $3 billion sales and $ 100 million profit, the company has gained and sustained the success in American hardware industry. In the competitive hardware industry along with the higher bargaining power of suppliers, the company has sustained its growth and competitive advantage. The growth of the company is triggered by good relations with dealers in different regions, which helps in the business expansion of the company (Ranganathan and Seo 2).
SWOT ANALYSIS of American Hardware Depot
Strength
The immense range of products of the company is a significant strength, as far as the digital transformation is concerned, the company has this big product portfolio comparative to make better placement on different websites. Being a prominent hardware retailer, the most significant strength of the company is its technology resources, as the company is quite valuable to transform the operations efficiently. Due to the surge of World Wide Web services, the company can transform or convert the business into the E-business operations
Weakness
The biggest weakness is the pool of barriers regarding IT and E-Business. Concerning the E-business operation, some prominent weakness is Lack of comprehensive data on inventory and sales, Diversity in hardware and software at dealer locations, Lack of integration of store-level data, and Inability to do any real-time information processing in this company (Ranganathan and Seo). The significant weakness of AHD is the missing catalog in the online business, and this has been considered as a big weakness of the company. Most of the stores of AHD are owned, and functioning by the independent dealers and some stores are owned and managed by corporate. The office of corporate has very little information on the activity of the dealers. The dependency of the AHD is on the system of the legacy that provides a connection with corporate stores.
Opportunities
The electronic catalogs seem one of the best opportunities for the company. For Instance, the company management can accelerate the electronic catalogs for the dealers, which will ultimately reduce the cost of distribution and production. Also, to gain the success, the management can boost the opportunity of E-catalogue along with some new feature. The web-based application is an exceptional opportunity, which seems a game changer as far as the E-business initiatives are concerned (Ranganathan and Seo). Of Course, the company also contains the opportunity for web marketing such as content marketing, search engine optimization, and social media integration to enhance the visibility of attraction. Moreover, due to digital transformation, the company can increase the online presence.
Threats
The competitor such as Home Depot and Lowe’s are the significant threats to this company, as they have already transformed the business. The online presence of new arrivals is also a significant threat, which can restrain the customers and increase the conversion rate. Different E-business challenges are emerging. For Instance, American hardware faces the changes of customer loyalty due to E-business their interaction between management and customers is quite rare. In E-Business, American hardware has not developed the product return system, which is a headache for the customers. Apparently, without an online platform, the customer may convert. In E-Business, the big challenge is choosing a right technology for right operation at the right time. Continuous transformation to meet E-business trends is a big challenge and a threat (Ranganathan and Seo).
CORPORATE LEVEL STRATEGY of American Hardware Depot
The corporate level strategy of the company is to create the values through increasing the market share, not only in the United States of America but also in the different regions through making and sustaining the relationship with dealers. For Instance, to increase the market share, the company is depicting its e-business or commerce initiatives to expand the business. Mergers and acquisitions with different retail giant are good for the company to increase the online presence and market share in the best interest of the company. The mission of the company is to be a market leader in hardware diversity online to increase the market share. Apparently, the goal of the company is to reach into the areas in several regions, which are undone yet.
BUSINESS LEVEL STRATEGY of American Hardware Depot
The competitive strategy of the business is to contain the product diversity of other competitors. For example, along with the other than hardware product, the company can come up with the diverse range of the product. On different online platforms, the customer can have access to the products of their needs. American hardware depot can get the competitive edge through this competitive strategy. The marketing strategy of the company is in the limelight due to its online initiatives. For Instance, the company wants to be an online leader through knowing the customer insights and knowledge. Concerning the cost, the management is considering the low cost of the product. It has already been justified through E-business initiatives. The general focus, as mentioned above, is on the business expansion and an increase in the market share. The significant advantage that the company can gain is the use of several E-business tools such as big data, to make quick, relevant, and rational decisions about both customer and market (Ranganathan and Seo 5).
CURRENT CHALLENGES for American Hardware Depot
In 2003, in the digital transformation, the AHD was in crucial inflection. The effort of e-commerce that is business to business had proved successful. The connection of the AHD provides dealers as well as AHD with the different type of benefits by providing help to supply chain, reduce the cost of a transaction, rationalize inventories as well the enhancement of the communication with the dealers. AHD also make efforts to sell directly to the end customers but remain to fail in producing desirable results. The approach of the partnership for web retailing is a failure.
IMPLEMENTATIONS
To implement the business level strategies, the structure and control systems seem useful. Thus, in the implementation process, the company management is looking to use different intranet applications to conduct a differentiated online business. All departments such as sales, marketing, production, inventory, and supply chain are integrated through these applications. It forms a structure, which helps to implement the business strategies. On the other hand, the control systems regarding the quality start with the placement of the order. The little glimpse to have an active control in America hardware depot is the online training of dealers to embrace the online web process of the company. The cost control is linked to process, quality, price and sales process online, and it is possible through integration. For Instance, AHD has set some measures such as customer satisfaction, sales and online traffic to control and improve the process.
RECOMMENDATION
Concerning the whole business transformation of America hardware depot, the change with the time and integration with the new e-business trends are highly recommended. Due to the significant IT and E-business challenges, the company can also outsource its web operations to reduce the challenges and justify the goals and objectives. Along with corporate level and general business strategies, the company must have to express the positioning strategies to keep the hardware and other affiliated products in the loop for the customers.
Work Cited
Ranganathan, C and Dong Back Seo. “The Snakes and Ladders Game in E-Business: Digital Transformation at American Hardware Depot.” Journal of Cases on Information Technology 8.4 (2006): 1-12.
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