SF Express: From Delivery to E-Commerce Harvard Case Solution & Analysis

SF Express: From Delivery to E-Commerce Case Study Solution

Pros and Cons of Launching Heike Store

In May 2014, the company opened first 500 of several thousand Heike stores, through which the customers were enabled try and buy SF Express’s own e-commerce offerings with other additional quality offerings. As an example of online to offline trend in China in e-commerce, the Heike stores allowed the company to leverage its IT expertise and logistics to differentiate itself from the market rivals in express delivery.The Heike outlets were launched by SF Express when the courier and internet service provider in China endeavored to connect online shoppers with B&M stores. Discussion of pros and cons of Heike allowed the company to find whether it would be able to create a difference between itself and its competitors or not.

Unlike the traditional retail stores, Heike did not have run up inventory, which in turn saved the company a massive cost. The calculation are shown in Appendix D, which demonstrates that the addition of Heike Store would not incur additional cost to the company in future.

The model has been considered a an efficient method of selling and marketing the products on the basis of their huge online database, which contained the information related to the consumer traction record and buying behavior. The caveat about the online shopping is that customers can’t touch or see the real things, so those who are used to inspect the products are not going to find the service very friendly. Furthermore, receiving a refund amount is hassle for customers. But, through Heike stores, the customers could easily select the products in accordance to their choices, and can pay via their smartphones or at the cash registers. SF Express then delivers the products to the customers. Also, the customers could easily cancel the order and  get the refund instantly in case if the style or size of the product does not match the customers’ desired style or size.Additionally, the customer could easily check the product’s information and select the best suited products.The concept has just revolutionized the concept of traditional retailing through providing the facilities of easy and hassle free shopping experience. Also, the company has considered the buying preferences, professions and ages of customers while deciding Heike’s outlets’ locations. The concept of Heike store could become the successful and an innovative face of the convenience store’s future.

Apart from the advantages, the launching of Heike stores has some drawbacks such as; although, the stores facilitate the customers through refund option, higher lead time or delay in delivery of altered products could frustrate the customer and mitigate them to shop from Heike’s stores. Additionally, the lack of touch-feel-try could create serious concerns among customers over the product’s quality, because shoppers want to try or physically inspect the product before considering them to be purchased. Also, the customer could lose the power of negotiation over the product payments’ terms and price that might exist at physical stores.

Ways to Grow its E-Commerce Business

The evaluation of strategic consistency in continuous expansion of business should involve strategies’ implementations,such as free-for-all strategy, digital entertaining strategy, and mobile strategy. All the strategies’ development should have their prime focus on improving the quality of services and gain the customer’s trust by reducing their difficulties that they face while shopping the products online.

In order to grab the entire share of internet traffic involved in online shopping for the  purpose of sustaining its growth – a new search engine should be launched by SF Express with Microsoft listing images and prices of products from prominent websites of e-commerce, challenging the dominance of Baidu in the Chinese search market.

Horizontal and Vertical growth of SF Express should be primarily emphasized on for an expansion of organizational size, diversification in products offering, reduction in competition, expansion in new market, increased profit generation and immediate access to potential customers. Additionally, the features that constitute with the profitable growth of SF Express should include un divided focus on the needs of local people, use of media as promotional strategic approach and online transactions.

The management and maintenance of coordination between the internal environment and external environment should be improved by building some communication means in order to reduce the communication gap between the employees and management for improving the operational services. The organization should successfully differentiate and retain the service providers of third party with the capability of providing quality services with continuous adaptation of the changes in market demands. SF Express should initiate its investment on a large number of applications based on mobile internet. The gross merchandise volume of the online shopping in China shows that the growth rate of online shopping would be 44% in future, which means that there is a likelihood that more customer would use smartphones to shop online in China. The calculation can be seen in Appendix E.

Due to the strong e-commerce momentum,the competitive strategy of SF Express  mobile space should emphasize on mergers, acquisitions and recruitment of more staff members. The company should also strike up meaningful partnership with the network of several freight forwarders and logistic companies. For the expansion on the global level, the company should improve its logistics, and should explore the partnership opportunities with giant logistics companies with the particular goal of developing the cloud-based logistics services. This in turn, would results in strong channel of distribution and increased number of warehouses for the company.

SF Express Delivery System

The company delivers quality products in a shortest time duration of thirty minutes in order to create efficient logistics products, and to provide rapid delivery services to its customers. The delivery system is divided into information network, ground network and aviation network. The aviation network is subdivided into airport construction, cargo plan reservation & airline routes, whereas the ground network is divided into intensive trunk line and service network through which it has crafted an intensive foreign & domestic network. Lastly, the information network is based on researchers and multi layers layout. The company continues to accelerate the pace of innovation &have investments in technology & innovation. The diagram is provided in the Appendix C............

 

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