MIS 207: E-Business_Fall, 2020

MID 1 Assignment
Marks: 18 points

Read the attached case, and answers the following.

Case-I
The Business Opportunity
The demand for high-quality chocolate has been increasing rapidly since
the early 1990s. Several local and global companies are competing in this
market. Godiva Chocolatier is a well-known international company based
in New York whose stores can be found in hundreds of malls worldwide.
The company was looking for ways to increase its sales. It had the
courage to try online sales as early as 1994. The company was a

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pioneering first mover online that exploited an opportunity years before

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its competitors.

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The Project

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Teaming with Fry Multimedia (an e-commerce pioneer), Godiva.com
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(godiva.com) was created as a division of Godiva Chocolatier. The
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objective was to sell online both to individuals (B2C) and to businesses
(B2B). Because its online activities began in 1994, the Godiva.com story
parallels the dynamic growth of e-commerce.
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Godiva.com went through difficult times—testing e-commerce

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technologies as they appeared; failing at times, but maintaining its

commitment to online selling; and, finally, becoming the fastest-growing
division of Godiva, outpacing projections. Godiva.com embodies a true
success story. Here we present some of the milestones encountered.
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The major driving factors in 1994 were Internet user groups of

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chocolate lovers, who were talking about Godiva and to whom the
company hoped to sell its product online. Like other pioneers, Godiva had
to build its Web site from scratch without EC-building tools. A
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partnership was made with Chocolatier Magazine, allowing

Godiva@com to showcase articles and recipes from the magazine on its
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site in exchange for providing an online magazine subscription form for

e-shoppers. The recognition of the importance of relevant content was
correct, as was the need for fresh content. The delivery of games and
puzzles, which was considered necessary to attract people to EC sites,
was found to be a failure. People were coming to learn about chocolate
and Godiva and to buy—not to play games. Another concept that failed
was the attempt to make the Web site look like the physical store. It was
found that different marketing channels should look different from one
another.
Godiva.com is a user-friendly place to shop. Its major features
include electronic catalogs, some of which are constructed for special

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 occasions (e.g., Mother’s Day and Father’s Day); a store locator (how to
find the nearest physical store and events at stores close to you); a
shopping cart to make it easy to collect items to buy; e-cards; a gift
selector and a gift finder; custom photographs of the products; a search
engine by product, price, and other criteria; instructions on how to shop
online (take the tour); a chocolate guide that shows you exactly what is
inside each box; a place to click for live assistance or for a paper catalog;
and the ability to create an address list for shipping gifts to friends or
employees. The site also features "My Account," a personalized place
where customers can access their order history, account, order status,
and so on; general content about chocolate (and recipes); and tools for
making shipping and payment arrangements.
Godiva.com sells both to individuals and to corporations. For
corporations, incentive programs are offered, including address lists of
employees or customers to whom the chocolate is to be sent—an example
of the B2B2C EC model. Godiva.com continues to add features to stay

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ahead of the competition.

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The Results

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Godiva.com’s online sales have been growing at a double digit rate every

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year, outpacing the company's "old economy" divisions, as well as the
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online stores of competitors.
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Questions:
a. Why did Godiva decided to sell online? List the EC drivers in this
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case. (3 pts)
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b. Classify Govida.com’s business model. Considering the business

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situation, justify their model(s). (5 pts)

c. What strategies and activities Govida.com adopted to minimize the
channel conflict and made the electronic commerce platform as a
profitable one? (5 pts)
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d. Visit https://www.godiva.com/. How user-friendly is the site? (5

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pts).
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Answers
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1. When Godiva were looking ways to increase their sales, because in

general in the 1990s the demand for high-end chocolates increased. They
saw a potential in making in the online sector and they also became a
pioneering first mover online that exploited an opportunity years before
its competitors. They could increase sales by selling online by reaching a
wider range of consumers both online and off-line. Their target was to
sell to both businesses and their final consumers via online. The EC
drivers were:
 There were many e-commerce technologies available, which
Godiva were trying out.

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  The EC drivers in this case in 1994 were Internet user groups
of chocolate lovers, who were talking about Godiva and to
whom the company hoped to sell its product online.
 Many people were already familiar with Godiva’s chocolates,
which means they had already established a trustworthy
image in the consumers’ minds.
 Lastly, Godiva got a head start when they went online by
partnering with Chocolatier Magazine, allowing them to
showcase articles and recipes from the magazine on its site in
exchange for providing an online magazine subscription form
for e-shoppers.
2. Godiva’s business model was brick and mortar at first where before
1994 they were only physical store based with hundreds of stores
worldwide. After 1994, their business model was brick and click. They
had both online stores and physical stores. They designed their own kind
of website without the help of the EC tools and came up with new ideas.

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They also designed their websites in a way so that people could also

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locate physical stores alongside shopping from the website, thus, keeping

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the stores’ importance alive. They provided a B2B transactions by selling

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their chocolates to corporate entities via their website Godiva.com. They

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are reaching their customers indirectly via other businesses which makes
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them a Private Industrial Network as well. This model can also be
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referred to as B2B2C model. They also provide B2C transactions, as
through their websites they are directly selling to consumers. They could
also be classified as an E-tailer because its online business processes are
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rapidly increasing.
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Godiva’s business model was acceptable and suitable given the

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circumstances. In 1994, when E-commerce was just booming, not

everyone had access to the internet but also, there was a potential
consumer base who shopped from the internet. Also, the customers who
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are already familiar with Godiva’s brand and chocolates, they could just
order from the website from the comfort of their homes. Completely
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turning business process to online may be risky given the e-commerce

boom was new and many people were already familiar with the stores.
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4. The site opened within seconds and as we know that is very important
to retain a visitor’s patience. At the top of the Website, the visitor can be
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notified about any on-going sales and new additions which can be very
persuasive and welcoming. The site also used graphic images of their
products which lets the potential buyer know what the chocolates and
their gifts to their loved ones would look like. There are general
information about the chocolates, their ingredients and recipes. There
are electronic catalogues, some of which are constructed for special
occasions, for instance now there are Christmas and holiday season
themes. There is a shopping cart to add purchases. There is also a gift
selector and a gift finder and since the visitor is selecting gifts they need
to select their loved ones’ or employees’ addresses. And the feature is
added in the website. To help the visitors to find their way, there is a
search engine by product, price, and other criteria; instructions on how

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 to shop online (take the tour); a chocolate guide that shows them exactly
what is inside each box. There is a place to click for live assistance as the
“Live Chat” which will answer any personal queries about Godiva. The
site also features "My Account," a personalized place where customers
can access their order history, account, order status. Lastly, the shipping
information is provided as the buyer finally logs in their personal and
crucial details such as credit card number and contact information.

c) Channel conflict occurs when businesses remove middle-men such as

distributors, retailers, dealers and sales representatives by reaching their
consumers directly over the internet. When businesses try to capture the
online sector by diversifying away from traditional business processes,
they may face conflicts. The conflicts that may arise are vertical channel
conflicts that Godiva could face as are both B2B2C and B2C. Multiple
channel conflicts could also occur due to this. “This creates conflict
because the manufacturer and retailer may be selling the products to the

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same markets, but at different prices” (Hoos, 2019). To overcome such

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conflicts, Godiva kept marketing channels separated for the offline

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services and the online processes. To make selling to consumers directly
easier, Godiva designed a very user-friendly website. And for

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corporations, incentive programs are offered. To reduce mix-ups of
address, Godiva included address lists of employees or customers to
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whom the chocolate is to be sent.
To make the electronic commerce a profitable one, Godiva did not use the
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basic EC tools to build their websites. Instead, they designed their own
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website from scratch. They made their website very user-friendly and
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because of the ease of website operation, it attracted many consumers

and led to sales through the website. They added features like special
catalogues, gift selector finder, product search engines, “My Account”
features, etc. They also introduced interactive schemes through their
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websites which was unique at the time, but not successful. Partnering
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with Chocolatier Magazine helped them reach more people and let them
know about Godiva’s online services. They kept all of their contents fresh
and maintained relevance in the magazines as well as on the website.
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The website also provided information about the store locations. To

conclude, not all strategies were successful, but they were resilient. As a
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result, Godiva.com’s online sales have been growing at a double digit

rate every year.

References
1. David Hoos. (August 17, 2019). How to Best Manage Channel Conflict (and How to Resolve
It). Retrieved from: https://thegood.com/insights/overcoming-channel-conflict/

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