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Written 4 - Assignment Example

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In an effort to increase sales, diverisify their business and to counter their competitors, the company embacked on a state of…
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Written 4

Having embraced technology in its operations in the past, this did not look as a far-fetched idea, it was therefore very welcome.
The system involved an overhaul of the HEB online presence; the website had to be redone to include more detailed catalog, product description, product user manuals and point of sale or check out features. Customers were expected to log in into the company’s website, make orders, pay for the orders and eventually have to good delivered at their door steps. The company went on to put up a distribution and delivery system for the products that were ordered online. This was a service that was expected to have runaway success at least on the eyes of the executives at HEB even though profit was a long term issues. It was expcted that the venture would break even in three years and remain into the future.
This optimism caused the team to overlook various anormalies that were quite glaring from the word go. Key among the anormalies was the cost implecations of the venture. A rough estimate of the cost indicated that the company would spend up to $5 to pick a customer’s order in the store, and $10 to deliver it to their home. This translated into 15% more overhead cost. The other issue was the cost of maintaining the E-retail system not to mention the cost of putting up a delivery system. Despite these bottle-necks, the company went ahead with the project and on 8th march, 2000; Mr. Fully Clingman (The COO) through a memo to all departments announced the restructuring of management to accommodate the new venture. The rest of the members of staff were equally elated at the prospets of the new system of doing business.
In the following months the company would engage in pilot implementations even as they gaged the customer response. Mr. Sturm, the director incharge of HEB.com argued strongly in favour of the project saying that the creation of a transactional pharmacy would enable HEB to leverage existing assets. As ... Read More
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