UBER STORMS EUROPE: EUROPE STRIKES BACK

Uber, the s o-called “ride hailing service” (otherwise known as a taxi service) is headquartered in
San Francisco and was founded in 2009 by Travis Kalanick and Garrett Camp. Uber is the
posterchild (along with Airbnb) for the on-demand economy, a place where independent
contractors respond to online requests for service. Uber’s various services for transporting people
rely on a smartphone app to hail a ride provided by an independent contractor (a driver) who is
not an employee of the company

Do you think Uber’s business model is viable? Why or why not?

Uber has a lower cost structure than traditional cab companies because it does not have to pay
employee wages or benefits, auto insurance, fuel, and licensing fees. Participating drivers pay for
their own cars, fuel, and insurance.

Some local governments have also resisted Uber, fearing the loss of tax revenue and threats to
public safety and health posed by unskilled and uninsured drivers whose cars may not pass
inspection. Nevertheless, in most cases, Uber has prevailed over local opposition, based in part
on public support for an expanded and higher-quality taxi service using mobile technology, and
support from Uber drivers who see the company as providing opportunity for a decent living.
Uber has been very successful in using social media and online marketing campaigns.

In this era, the business using online platform is viable because people need something instant,
one click solution. But the problem is about the regulation and license. It can be clear when the
government make a clear agreement with Uber. And also Uber increase their safety and make the
customer believe.

How do you feel about using Uber compared with a regulated taxi?

Under certain conditions, if demand is high, Uber can be more expensive than taxis, but it has
disrupted the taxi industry because it offers a reliable, fast, convenient alternative to traditional
taxi companies that book rides using the telephone, a central dispatcher using antiquated radio
communications, or potential customers standing on street corners trying to hail a cab.
INTERACTIVE SESSION: TECHNOLOGY GETTING SOCIAL WITH CUSTOMERS

Businesses of all sizes are finding Facebook, Twitter, and other social media to be powerful tools
for engaging customers, amplifying product messages, discovering trends and influencers,
building brand awareness, and taking action on customer requests and recommendations.

Assess the management, organization, and technology issues for using social media
technology to engage with customers.

What are the advantages and disadvantages of using social media for advertising, brand
building, market research, and customer service?

Advantages : enabling users to interact with the brand through blogs, comment pages, contests,
and offerings on the brand page. The “like” button gives users a chance to share with their social
network their feelings about content and other objects they are viewing and websites they are
visiting. T

his is a more immediate and interactive way to reach consumers who are increasingly spending
time on social media platforms.

Social media monitoring helps marketers and business owners understand more about likes,
dislikes, and complaints concerning products, additional products or product modifications
customers want, and how people are talking about a brand (positive or negative sentiment).

Disadvantages : there are many users don’t understand about the social media platform. They
can’t using this platform effectively. Sometimes hacker can make a trouble with social media.
And also, if there is a complaint about the product, there are many people can know about the
problem. Because in social media, people can access information about the product easily.

Give an example of a business decision in this case study that was facilitated by using social
media to interact with customers.

GM recognized early on that there was a wealth of information in online vehicle owner forums
that should be utilized in product development. GM social media advisers actively monitor
vehicle owner forums and other social media platforms to identify potential issues and provide
real-time customer feedback to the company’s brand quality and engineering leaders. In some
cases, GM social media advisers were able to identify issues much earlier than traditional
surveying or dealer feedback. For example, GM’s social media team identified a faulty climate-
control part when a customer posted the issue on a product-owner blog. The complaint received
dozens of replies and thousands of views, prompting GM that it needed to investigate further.
Once GM specialists determined the root cause of the issue, the company released a technical
service bulletin to all dealerships to replace the affected HVAC control modules on vehicles
already built.

In October 2014, Microsoft CEO Satya Nadella triggered negative reaction on Twitter after he
spoke about women not needing to ask for pay raises at work and how they should trust the
employment system. Nadella later tweeted an apology. Social media provided a platform for
angry backlash against Starbucks in March 2015 for its “Race Together” campaign. Starbucks
has taken on sensitive social issues before, and it launched the campaign to encourage
conversation with its customers about race relations. Critics hammered Starbucks on social
media for trying to capitalize on racial tensions in the United States.

Should all companies use social media technology for customer service and marketing?
Why or why not? What kinds of companies are best suited to use these platforms?

Social media marketing is all about two-way communication and interaction. It enables
businesses to receive an immediate response to a message—and to react and change the message,
if necessary.
INTERACTIVE SESSION: ORGANIZATIONS CAN INSTACART DELIVER?

Analyze Instacart using the value chain and competitive forces models. What competitive
forces does the company have to deal with? What is its value proposition?

Value chain is the process or activities by which a company adds value to an article, including
production, marketing, and the provision of after-sales service. A value chain is a set of activities
that an organization carries out to create value for its customers. Porter proposed a general-
purpose value chain that companies can use to examine all of their activities, and see how they’re
connected. The way in which value chain activities are performed determines costs and affects
profits, so this tool can help you understand the sources of value for your organization.

Instacart is an on-demand grocery delivery platform offering doorstep grocery deliveries and
other home necessities in major cities of the United States.

Porters Five Forces of Instacart

Entry of the Instacart’s app into the market has had a massive impact on the grocery stores.
Besides the structural strengths, the company enjoys pricing advantages over competitors like
Amazon and Safeway (Saeed, 2017). The company is the new market entrant so does need to
worry about entrants and thus it is up to existing stores to deal with it. The company suppliers
form part of the Instacart’s competitors since they own separate grocery and retail stores.
Furthermore, since Instacart acts a partner for grocery stores, there are no competitive pressures
when expanding. In fact, the company operates almost like an arms dealer for stores as they
compete to increase spend and attract customers.

The Value Chain Model of Instacart

The Instacart value chain model is technology driven, which boosts the delivery groceries to
customers in less an hour, making it one of the most promising and innovative companies in the
U.S, which is based on sharing economy model (Saeed, 2017). By depending on existing stores,
Instacart instantly has access to a large selection of stock keeping units.

Explain how Instacart’s business model works. How does the company generate revenue ?
Instacart provides same-day delivery service. They bring your groceries right to your doorstep.

It has its dedicated workforce that goes and shops for deliveries at these local stores, and on top,
the Instacart revenue model is made up of markup on groceries plus the delivery fee in a revenue
share agreement with its retail partners.Once the order is received, your order goes to a personal
shopper who then goes and visits stores and collects those items. The items are collected, and
they are delivered to your doorstep.

It's fast easy to use and simple which is one of the key elements of success.

The biggest value prop is that you can order online from mobile from your favourite local store
such as Whole Foods, Trader Joe's, Safeway, Costco public.

These are three fundamental ways how they're generating revenue.

 The markup on prices for specific stores

 There is a delivery fee for products that are ordered and

 There's also a membership fee for actually using instacart.

What is the role of information technology in Instacart’s business model?

It provides information richness, enabling an online merchant to deliver to an audience of

millions complex and rich marketing messages with text, video, and audio in a way not possible
with traditional commerce technologies, such as radio, television, or magazines.

Is Instacart’s model for selling online groceries viable? Why or why not?

With national chains achieving just 1 to 2 percent margins on grocery delivery, the Instacart
model of layering labor on top of the existing grocery infrastructure is still unproven. According
to a Wall Street Journal analysis, an order of 15 common items such as frozen peas, milk, cereal,
and fresh fruit costing about $68 from a San Francisco Safeway store would produce a profit of
only $1.50 for Instacart. If the order were smaller by one 28-ounce jar of peanut butter, Instacart
would break even, and a smaller order could push it into the red. Without price concessions from
participating merchants, can Instacart attract enough customers? And maintain a pay scale that
ensures the topnotch customer service demandedby its target market? And still make a profit?
And can retailers’ sales gains from Instacart be sustained? Instacart may be a great idea, but it’s a
very big bet.
WALMART AND AMAZON DUKE IT OUT FOR E-COMMERCE SUPREMACY
CASE STUDY

Analyze Walmart and Amazon.com using the competitive forces and value chain models.

Competitive Forces-a.Walmart is entering a new market through their entry into the online retail
space, competing directly with online retailer giant Amazon, who is a well-known and
recognized leader in e-commerce. Because Walmart has been focused on physical stores for the
majority of their existence, online retail capabilities only became a concern once Amazon began
stealing market share.b.Walmart and Amazon are creating substitute services by offering an
alternative to their competitor for their customers. Many Walmart customers are also Amazon
customers, and the ability for customers to purchase similar goods at similar prices at both
Amazon and Walmart puts more purchasing power in the consumer’s hands, drives down costs,
and forces both entities to make technological and operational changes to increase their
competitive advantages.c.Both Amazon and Walmart have incredible leverage over their
suppliers due to the breadth of their supply for similar products. This gives them both the ability
todrive down the prices they pay for their suppliers’ products to then offer the savings to their
customers.2.Value Chain-a.Primary Activities-i.Inbound and Outbound Logistics-1.Both
Walmart and Amazon build warehouses close to their target customers to store product. Where
the two companies differ is in their outbound distribution. Amazon’s core business is in storing
product at fulfillment centers to ship to customers, or acting as a technological middleman for
3rdparty vendors who want to sell their products to a wide audience. Walmart is rapidly
developing their online capabilities, but is still much smaller than Amazon in online market
capitalization and thus less efficient in door-deliverydistribution. Through Amazon Prime, for
instance, customers are able to receive shipments cheaply and within 1-2 business days.

Compare Walmart and Amazon’s business models and business strategies.

has built its empire through 4,000-plus brick-and-mortar stores. It has not been that involved in
online shopping but now it’s being forced to increase its Internet presence based on Amazon’s
success. Amazon can concentrate all of its corporat‫ק‬resources on its Web business because it
doesn’t have to support traditional brick-and-mortar stores.Amazon attracts new customers and
keeps its old ones by offering low-price shipping through its Prime annual subscription. Its
shipping costs are lower than Walmart’s ranging from $3 to $4 per package whereas Walmart’s
online shipping can run $5 to $7per parcel. Although Walmart has literally invented efficient
customer response systems that enable it to maintain its low-cost leadership strategy for its
physical stores, re-creating a different or separate logistics supply chain is proving difficult and
expensive.Walmart’s physical stores provide customers with instant gratification of their
purchases whereas Amazon customers must wait at least a day for their items to arrive. Most
purchases are shipped within a week’s time. (Learning Objective 3.3: How do Porter’s
competitive forces model, the value chain model, synergies, core competencies, and network
economics help companies develop competitive strategies using information systems? AACSB:
Analytical thinking, Reflective thinking, Application of knowledge.)

What role does information technology play in each of these businesses? How is it helping
them refine their business strategies?

 In Walmart business, Information technology plays a vital role to increase the customers
by developing the Smartphone Apps.
 This application allows the customers to make any order from this online shopping
website, if the items are out of stock in its retail shop.
 It creates the club to test the new service by permitting the buyer to make the order on
online but it will not allow the payment through online.

Refinement of Walmart Business:

 Information technology helps the Walmart by enhancing its work by connecting its retail
store, website, and mobile apps. Because of this, customer makes the order through
online and gets the ordered items at stores; instead customer need not wait in a queue to
purchase the item.
 It monitors the other retailer’s prices, and if necessary, it lowers its item price on online
shopping.
  It increases the third-party sellers to struggle with “Amazon’s” and increases the number
of items to its customers.

Role of information technology in Amazon Business:

 In Amazon business, information technology plays a vital role to boost the buyers by its
own Smartphone developed.
 It’s developed the Smartphone that will help the buyers by giving the enhanced platform
to buy the products through online shopping.
 It gives the customer support service by 24 hours helpline to support the buyers by
providing the service agent to customer for taking immediate action through phone.

Refinement of Amazon Business:

 Information technology helps to increases the order in town areas by offering the product
delivery within a day.
 It has supply chain optimized for online e-commerce, which Walmart does not match it.

Will Walmart be successful against Amazon. com ? Explain your answer.

No, Walmart will not be successful against Amazon because of these reasons:

 Have rich shopping features

 For product recommendations, they have strong analytics
 They have unique stock/products with very detailed descriptions and high quality
 Hassle free return/exchange of products
 Easy money refund process against return products