Management Case

A man in his mid-thirties trying desperately to stay in shape commits to running three days a week. The man is extremely busy and it is very difficult for him to go shopping for sneakers. His sneaker of choice is Nike. The man goes online, picks his shoe style, size, and pays with his credit card. It took all of three minutes.

Behind the scenes the following has occurred at Nike: the order has been electronically routed to the nearest Nike Distribution Center; the SAP inventory database has verified the stock of the particular sneaker; a pick, pack, and ship label has been generated; the customer receives an e-mail stating the order has been shipped with the expected due date and a hyperlink to track the parcel, and the shipping detail has been uploaded to the proper freight carrier. The parcel will arrive at the customer's location on the expected due date, and he will be on his way and running. Welcome to the information super highway. Welcome to the Internet!

Abstract

Paul Revere, Director of Business Development for Mid-America Paper Corporation, in a memo dated March 29, 1999, writes an urgent memo to J.R. Biggenslow, the firm's Chief Executive Officer. The subject is "E-Business Now" and it is a call to arms of why the firm has to have an Internet strategy. This document will determine if the e-business survival guide (the memo) as outlined by Hof (1999) is a valid course of action. The document includes environmental issues, a SWOT analysis, and forecasting,

External Environmental Issues

In reviewing the memo and many articles that Paul Revere surfaced to J.R. Biggenslow, we must consider the external environmental issues and influences that impact future decisions about technological advances for Mid-America Paper Corporation. Environmental factors can be classified into three key segments:

1.) Remote - Economic, Social, Political, Technological, Ecological

2.) Industry - Entry barriers, Supplier power, Buyer power, Substitutive availability, Competitive rivalry

3.) Operating - Competition, Creditors, Consumers, Labor, Suppliers

This is only a short list of the many outside forces that can influence an organization and how it conducts its business. As an organization that sells paper office supplies and corrugated boxes to corporations and retailers, there are unique implications that must be considered as a consideration to venture into e-Business is considered.

Remote Influences

In the case scenario of Mid-America Paper Corporation, economic factors must be reviewed. Because the Internet is a tool utilized in many other countries in addition to the United States, the potential for international business opportunities should be reviewed. Because on-line services 510 million people across the world - international competition should also be taken into consideration.

Social factors are of utmost importance in our review, as well. The average age of the population is shifting, and a higher quality of life is being demanded, as outlined in the text by Pearce and Robinson (page 73). More and more households are equipped with a personal computer. Most businesses can't operate without some type of computer - although not all have Internet or web accessibility.

A technological factor that needs to be considered at this time is that the web is still fairly new. The products and services are constantly changing, and it may be difficult to identify what our needs are.

Mid-America Paper Corporation is in the business of paper and corrugated cardboard, therefore ecological influences will affect their business. The opportunity to conduct business on-line would afford the company a chance to reduce paper. Creating on-line order forms, and a system that would automatically feed the order form without needing to be printed, would eliminate unnecessary paper. Allowing the organization an opportunity to "sell this" ecological awareness and commitment to their customers.

Industry Factors

The competition is the key external force that needs to be considered with regards to industry factors. An industry factor to ask oneself is, "Who really is our competition?" Should Office Depot and Staples be companies that should be benchmarked against? They may not be selling to the same target market that Mid-America Paper Corporation is. If Mid-America Paper Corporation is marketing businesses and retailers, their competition should be other companies providing paper goods business to business. An example company could be Xerox, as well as PaperExchange.com.

Another industry factor to consider, as outlined in the text, by Pearce and Robinson, "4. Assuming that competitors will continue to behave in the same way they have behaved in the past," (page 97) is a common mistake that corporations make. In this case scenario, Office Depot and Staples are already selling on-line. The competition is ahead of us. A successful company is going to anticipate what their competition is doing by ensuring that they do not become complacent, and continue to research what the competition is doing. If an organization assumes that their competition will continue to operate the way they always have, they lose their agility and competitive edge.

Operating environment

In researching external factors, the operating environment is another influence. In the case of operating environments, the company has more control over these influences than in the remote or industry influences. The amount of control that the company has, or influence they have in the industry, allows them the opportunity to be more proactive in their business decisions because they are able to make an impact on the operating environment.

Geographic external factors are not as impact of an influence when looking at e-Business. With on-line initiatives, where someone lives, or how far they can drive, are not relevant factors.

The demographic external factors, however, are relevant when looking at taking business to an on-line environment. In fact, this may be the most beneficial information when venturing into e-Business, as the ability to capture information systematically can be valuable. Technology could be used to learn more about buyer behavior. With computers, businesses are able to capture buyers' habits and tendencies. Observing customers' preferences, amount of purchases, and dollar amounts spent, can be information that is used in the future to market a product specifically to an individual. There would also be the ability to provide special offerings