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In life or business, the best lessons are learned not just from the success stories but also from the saga of failures and struggles. This is the reason why so much emphasis is laid down on analysis of case studies in business schools. In this article, three prominent business case studies are selected for introspection and analysis to help present day business owners and entrepreneurs get relevant insights on managing their businesses and formulating effective strategies and avoiding blunders.

Blockbuster

Blockbuster, founded in 1985 by David Cook, was a movie and video game rental service company headquartered in Dallas, Texas, United States. Blockbuster was the undisputed market leader in video renting services in the United States. It had a wide network of retail stores across the country and a customer base that numbered in millions. Blockbuster went public and its control was acquired by an investment group who sold it to Viacom for $8.4 billion in 1994. Blockbuster went bankrupt in 2010. In between, the company engaged in several purchases and sale of complementary businesses and it also experienced several changes in its own control, management, and ownership. [(1), (2), (3)] But the problem with Blockbuster was not the lack of stability in its control or management or its buying and selling of other related businesses. The hitch was in its revenue model which began to heavily rely on late fee penalties. Customers were subjected to late fees for delayed returns. This was something that did not go well with its customers. As competition started to emerge in the form of companies like Netflix and Redbox, the company quickly started to lose its customer base. Some of the competitors provided subscription based services that did away with late fee penalties. [(1), (2), (3)]

Lessons Learned

Even though Blockbuster was registering a healthy inflow of revenue, most of it was coming from penalizing its customers. This is a severe blow to a very fundamental idea that price is the consideration which a customer agrees to pay for the value of a product or a service. Here, in this case, what the customers were made to pay exceeded the value they derived from the consumption of the services because of the applicability of late fee penalties. Cases like these also highlight the importance of the tools and software of retail analytics and business analytics in modern day businesses. With the help of the analytical reports and insights on business performance, companies can better understand the trends and changes in customer behavior and revenue patterns vis-à-vis changes in business policies and business environment.

With the help of the analytical reports and insights on business performance, companies can better understand the trends and changes in customer behavior and revenue patterns vis-à-vis changes in business policies and business environment.

Kodak

Founded by George Eastman in 1888 and headquartered in New York, Kodak is a renowned brand in the world of cameras and photography. Kodak generated huge revenues from photography consumables – films, chemicals and papers. It dominated the US market till 1976. The company faced stiff competition from its Japanese counterpart Fujifilm after undermining it for a while. Fujifilm became the official film partner of the LA Olympics of 1984. Kodak developed digital cameras as early as in 1975 but refused to launch the same fearing threat to its existing photographic film business. With rising competition from Fujifilm and increasing need for diversification to digital, Kodak planned its foray into digital photography from the early 90s and by 2005 it ranked no.1 in digital camera sales in the U.S but its film business (where it was enjoying high-profit margins) fell 18% in the same year. In the next five years, Kodak was surpassed by Sony, Canon, and Nikon etc. By this time, mobile phones with the camera started to grab market share from these giants. (4)

Lessons Learned

Kodak was nearly a century old company when it first saw traits of rising competition and changing technology. Being a market leader for such a long time, it failed to capitalize on its position. Kodak’s problem area was that it was very slow in responding to the changes in its environment. By letting go of the opportunity to diversify itself with a digital product line (digital cameras and digital photography), which would have been a huge technological leap, Kodak missed out on remaining years ahead of its competition. Of course, this would have entailed some time and investment in research and development and necessary changes in its business model for the migration process. Given the edge of digital photography and Kodak’s market share, it would not have been very difficult for Kodak to market its digital product line. Technological advancement is a brutal truth that hardly leaves any business untouched. Business owners and entrepreneurs need to keep themselves updated of the developments in the field of science and technology that might impact their business. Paving ways to embrace technological advancements is one of the crucial considerations of business planning.

By letting go of the opportunity to diversify itself with a digital product line (digital cameras and digital photography), which would have been a huge technological leap, Kodak missed out on remaining years ahead of its competition.

Hummer

Hummer was a well-known brand of SUVs originally designed by AM General Corporation in the early eighties for the US army. In 1992, the civilian version of Hummer was launched. In the late nineties, General Motors purchased the brand name while AM General continued with the manufacturing. By 2006, Hummer began to be sold and exported through intermediaries in 33 countries. (5) Problems started to arise with Hummer with the rising prices of oil and gas. It started to be increasingly perceived as a fuel guzzler amidst rising global awareness of environmental issues.

 Lessons Learned

Hummer used to be a powerful brand symbolizing strength, endurance, toughness and an all-terrain all-weather vehicle. But at the end of the day, it had little or no practical use for civilians. It was designed for the military. Sooner or later the fad had to fade as Hummer was a high-maintenance and high-fuel consuming vehicle. Hummer, at the best, was a niche market product.  Even with its value and utility, its rising usage cost significantly hampered its market demand. The three case studies discussed in this article brings to the forefront two important elements of business management and strategy formulation – customer cost and adoption of advanced technology. Businesses need to bear in mind that apart from the purchase price, a customer also has to incur usage costs and post-usage costs to extract the intended value from a product or a service or to complete the consumption process. Secondly, businesses need to plan for and adapt and migrate to advanced technologies to remain competitive and match pace with generational shifts.

YRC Related Articles: How to Write SOPs for Marketing?, 6 Ways To Grow Your Business, How to Start a Retail Business in India, Business Expansion Plan for Small Entrepreneurs, Six Steps to Writing a Great SOP for Retail, How to write SOPs for an Apparel Brand?, How to Develop SOPs for Quick Service Restaurant?, How to write SOPs for Furniture Showroom

Author Bio

Rupal Agarwal

Chief Strategy Officer

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    PROCESS AUTOMATION

    The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

    In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

    Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

    Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

    YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

    VIDEOGRAPHY & PHOTOGRAPHY

    No matter how good your product is, the customer would know only if it looks good.

    Photography includes the following steps:

    • Cataloguing your products
    • Cataloguing your images
    • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
    • Choose the right camera & lens (You may also outsource the photography to a third party agency)

    DIGITAL MARKETING

    Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

    Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

    These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

    Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

    This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

    IT INTEGRATION

    Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

    YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

    IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

    This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

    Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

    WAREHOUSE & LOGISTICS PLANNING

    • How many cities or countries you wish to sell in?
    • Where should your Warehouse be located?
    • Should you have one warehouse in each country or city?
    • Should you be having your own delivery team in your base city?
    • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
    • How should I manage the logistics if my goods are coming from different countries?
    • How should the goods be stored and barcoded?
    • How much space do I require for warehouse?
    • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

     

    At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

    We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

    Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

    UI & UX DESIGNING

    This Step involves 03 distinct parts:

    Part 1: Choosing the right Platform:

    From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

    Part 2: UX Designing:

    “UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

    UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

    “As per statistics, 68% of the customers abandon the carts before payment”

    An interesting UX ensures the customer sticks on to the website for a longer time.

    Part 3: UI Designing:

    UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

    A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

    The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

    If User experience is the bare bone, user interface wraps it up with an attractive cape.

    At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

    SAMPLING & PRODUCTION

    This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

    In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

    Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

    Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

    Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

    Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

    Production Sample is made before the production which is the replica of what is going to be finally produced.

    Once you are through with all this, you are good to go ahead & get your goods manufactured.

    PRODUCT DESIGNING / SOURCING

    Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

    Product Designing / Sourcing can be done in several ways, as follows:

    • In-house Design Team
    • Freelance Designers
    • Outsourced Design Team
    • Ready Product Sourcing (From Manufacturer or Wholesaler)

    At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

    These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

    If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

    Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

    BRANDING

    Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

    Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

    It is an integral part to attract the target audience.

    ORGANOGRAMS & SOP’s

    Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

    SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

    At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

    CRITICAL PATHWAY

    Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

    CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

    CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

    At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

    BUSINESS STRATEGY & BUSINESS PLAN

    Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

    Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

    Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

    YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

    MARKET RESEARCH

    Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.