Audio Advice E-
commerce
Strategy
Leveraging relationships for online success in
the audiophile equipment market. This strategy
focuses on transitioning Audio Advice's strong
in-store presence to e-commerce while
maintaining customer satisfaction.
Introduction to Audio Advice
Company Overview: Audio Advice
Content:
• Founded: Audio Advice is a North Carolina-based high-performance audio equipment
retailer known for catering to audiophile customers.
• Core Business: Specializes in high-end audio products such as turntables, home
theater systems, headphones, speakers, and subwoofers.
• Target Audience: Audiophiles and sound enthusiasts who value high-quality, high-performance a
• Store Locations: Operates brick-and-mortar stores in North Carolina, offering
personalized in-store experiences and product demonstrations.
• Key Strength: Strong relationships with premium audiophile brands, allowing
exclusive access to specialized audio equipment.
• Growth Opportunity: Considering expansion into online sales through channels like
Amazon Marketplace and a potential direct e-commerce platform.
Q1. Classification of the two dimensions of the
GE/McKinsey matrix
The GE McKinsey Matrix is a strategic tool used to evaluate the
competitive position of a business unit within a larger
corporation. It helps businesses prioritize resource allocation
and make informed decisions about their portfolio of
businesses.
Business Market Attractiveness Competitive Strength
In-Store Medium to High High
Amazon Marketplace High Medium
Direct E-tail High Low
Q2. Compare customer lifetime values for the Amazon Marketplace customers
and
the projections for direct e-tail customers.
Customer Lifetime Value Comparison
Amazon Marketplace Direct E-tail
Lower CLV. Mostly one-time Higher potential CLV. Deeper
purchases with less personal customer engagement, personalized
interaction. recommendations, and tailored
experiences.
Q3. Make the online branding decision outlined in the case and develop a positioning
statement for this online brand.
Online Branding Strategy
Chosen Brand
"Audio Advice" for e-commerce site.
Credibility
Established brand trust within audiophile community.
Consistency
Unified brand identity across channels.
Positioning Statement
1 Curated Selection
Premium audio equipment for novices and audiophiles.
2 Expert Advice
Personalized recommendations ensure superior
listening experiences.
3 Educational Content
Exclusive resources to help customers understand their choices.
Q4. What is the best approach to convince audiophile brands to allow their
products to be sold online?
Convincing Audiophile Brands
Showcase Expertise
Highlight commitment to quality service and
customer satisfaction.
Educational Content
Use rich multimedia to demonstrate product value.
Leverage Relationships
Reassure brands of commitment to audiophile market.
Q5. How can the organizational challenges be
overcome?
Overcoming Organizational Challenges
Communication Strategy Omnichannel Strategy Cross-Promotions
Explain how online Create seamless customer Bundle offers involving both
complements in-store sales. experiences. Encourage in- in-store and online products.
Provide incentives for sales store customers to explore
staff support. online offerings.
Goals for Direct E-commerce
Q6. Set goals for the Launch
direct e-commerce
Traffic
launch using suitable 1 25% monthly increase in website traffic for first 6 m
metrics to guide the
Conversion Rate
2
tactics employed over 2-3% initial conversion rate as starting point.
the next year.
Average Order Value
3
Target of $400-500 per order.
Customer Retention
4 20-25% retention rate in the first year.
Conclusion: Key Performance
Indicators
1 Customer Lifetime Value
Achieve CLV of $2,000 from direct e-commerce customers by
end of second year.
2 Customer Satisfaction
Maintain 4.5-star average rating across all online reviews.
3 Website Traffic
Attract 50,000 unique visitors per month by end of first year.
4 Customer Acquisition Cost
Keep CAC below $100.
Conclusion
1 Establish E-commerce Presence
Crucial for growth in the changing audio
equipment market.
2 Focus on Customer Delight
Emphasize personalized experiences and expert advice.
3 Build Strong Relationships
Leverage existing strengths with audiophile
brands for future success.
