Business

Process
Re-engineering
Syndicate 2
Dina Rizkia Rachmah (29120431)
Muhammad Ikhlas Dharma (29120398)
Desman Hansen Sagala (29120481)
Anton Herutomo (39020905)
1.
General
Overview
Overall summary of the
Opple’s Lighting E-commerce
Business Case

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Development History
of Opple Lighting Opple tops online
sales rankings for
lighting products with
a sales revenue of
Opple Lighting founded Opple expands ¥60 million during the Opple lists on the
by couple Wang capacity and builds Opple headquarters Single’s Day Shanghai Stock
Yaohai and Ma Xiuhui. factories. move to Shanghai. Shopping Festival. Exchange.

1996 1998 1999 2004 2009 2012 2013 2015 2016

Opple’s annual sales

overtake those of NVC
They branded the Opple develops Opple’s Wujiang and Philips Lighting,
company “Opple”. overseas markets. production base making the company
starts operations. China’s industry leader.

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 Further E-commerce Development
Organizational Adjustments
Its organizational structure is adjusted and summarized in the following 3 stages:
1. First stage (2012-2013): The newly established with a limited number of employees started exploring suitable
business models.
2. Second stage (end of 2013-2015): The e-commerce BU gradually built a functional organizational structure
separated into products, sales, marketing and back-office divisions.
3. Third stage (2015-2016): Wang drew inspiration from the innovative organizational structure adopted by the
online apparel brand Handu and reorganized the functional structure of his e-commerce BU.

Innovating with the Talent Management Approach

Summary of Wang’s management style:
● Freedom: E-commerce BU staff could work where and when they wanted as
long as they completed the tasks on time.
● Empowerment: E-commerce BU empowered employees in everyday
operations, encouraging them to think, discuss, execute and adjust on their
own.
● Veterans on new jobs and newcomers on old jobs: Wang assigned the
veterans to incubate new businesses and entrusted their previous work to
new management trainees. 4
 Further E-commerce Development
Building and Refining the Performance System
The goal was to make cash incentives part of the employee motivation plan, rather than a mere flash
in the pan.
According to the new performance system, the e-commerce BU’s salary model featured “low basic
pay and high commission”. Opple paid out excess profit bonuses at the end of each year.

Boosting Operational Efficiency

Opple’s e-commerce team continued to boost operational efficiency
by upgrading operational strategies and back-office capabilities,
driving online sales from ¥100,000 per month to ¥100 million.

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Impact of the e-commerce BU
1 Corporate Culture Changes

Employees dressed more casually, President Ma’s new

empowerment culture, company meetings became opportunities
for face-to-face communication rather than leader monologues.

2 Organizational Structure Changes

It upgraded the home and commercial lighting

departments into BU with some degree of autonomy in
product planning, sales, service and supply chain.

3 Incentive Mechanism Change

It introduced a series of sales management

measures to monitor and manage daily sales and
profits in each district. The unit also designed excess
profit bonuses for different levels.
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2.
Discussion
Questions
Questions and answers based on
the case Opple’s Lighting
E-commerce Business

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 What are the pain points of the lighting industry? What are the threats and
opportunities of the internet? Which links in the industry chain did Opple
reinvent with its e-commerce business?(⅓)

The Pain point of the Lighting Industry

1. New Lighting Technology 2. Rise of E-Commerce 3. Distributor Control

LEDs, disrupted the market or
the traditional lighting industry
and drastically lowered its
entry threshold. Snatching
market share from
Incandescent bulbs and CFLs
(compact fluorescent lamps) in
just two years.
The Rise of e-commerce brought a
host of new brands to the market.
During the 2012 Single’s Day, online
lighting sales tripled to reach 600
million and make market Turbulence
resulted in a fall in sales.
The lighting industry was common
with distributor leeway over pricing.
Flexible pricing was common and
therefore allowed distributors to get
better deals.

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 What are the pain points of the lighting industry? What are the threats and
opportunities of the Internet? Which links in the industry chain did Opple
reinvent with its e-commerce business?(⅔)

The Threats and Opportunities of the Internet

Threats
● Sales channel conflict with offline
channels.
● Price transparency, which was
uncommon with offline channels.
● Rapid iteration of RnD, which
was slower in traditional lighting.
● Fast delivery capacity, which
need rebuilding for traditional
warehousing in lighting
companies.
Opportunities
● Made the company fast
response and adaptive to
market conditions.
● Corporate culture change into a
more open style and
empowerment.
● More efficient from operation
side.
● More product and service
market coverage because of
many e-commerce platforms.
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What are the pain points of the lighting industry? What are the threats and
opportunities of the internet? Which links in the industry chain did Opple
reinvent with its e-commerce business? (3/3)

❏ Product suitable for e-commerce required rapid

iteration and small scale production to meet the
fragmented demand. Opple’s traditional
development process could not provide solutions
for the supply of e-commerce product.
❏ So, Wang leveraged his resources in the supply
chain department and contacted Opple’s
external suppliers. They quickly developed
many innovative home lighting products for
e-commerce and produced them in small and
frequent batches as OEM’s.

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 When developing the e-commerce business, how did

“
Opple manage potential conflicts between old and
new businesses and change its entire organizational
structure and management culture? (¼)

Source: To avoid direct conflict with offline channels, the e-commerce

team could not source from the company’s existing product line. Wang
Ye who assigned as Leader in e-commerce team solve the problem from a
different perspective. He leveraged his resource in the supply chain
department and contacted Opple’s external suppliers. They created
many innovative home lighting products for e-commerce and produced
the in small and frequent batches as OEMs

Price: adjust to the prices of mainstream e-commerce lighting

brands and considered Opple’s brand image and product
quality. Opple’s online products sold at price about 30%-50%
higher than the average.
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When developing the e-commerce business, how did Opple
manage potential conflicts between old and new businesses
and change its entire organizational structure and
management culture? (2/4)

First Stage (2012-2013) Second Stage (2013-2015) Third Stage (2015-2016)

Limited number of Built a functional Adopted organizational
employees started organizational structure structure of brand apparel
exploring suitable Handu.
business models. Majors
were sales with everyone
work side by side

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When developing the e-commerce business, how did Opple
manage potential conflicts between old and new businesses
and change its entire organizational structure and
management culture? (¾)

After a year, created more flexible structure (exhibit 3).

-Vertical direction: 3 people form a team according to different product
categories. One member was responsible for product sales, and the other two for
graphic design and promotions. The team would evaluated in light of the
team-based KPI and worked toward the same goal.
-Horizontal direction: there are e-commerce platform and there are store
managers in charge each the platform

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When developing the e-commerce business, how did Opple
manage potential conflicts between old and new businesses
and change its entire organizational structure and
management culture? (4/4)
Freedom Empowerment Veterans on new job and
E-commerce BU staff The e-commerce BU newcomers on old job.
could work everywhere empowered employees in The old hands to incubate
and everytime as long as everyday operations, new business and their
they completed tasks on encouraging them to think, previous work hand entrust
time. discuss, execute and adjust to MT.
on their own. Moreover to
enhance sense of ownership,
there is the program a
monthly CEO rotations.

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What challenges will Opple face, and
how can it keep sustained growth?
Competitors Are Opple’s
Challenges
Opple has several competitors
that they need to keep an eye
at such as NVC Lighting,
Philips Lighting, and Bull. Not
only they keep improving their
products, but their strategies
and partnerships as well.
Sustained Growth
In order for Opple to keep their
position at the top of the list,
they need to keep their
company sustainable by
continuing to make innovative
products as well as their
e-commerce business models.
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