Case 1: Google. (At the end of Chapter #1. Answer 2 questions
Case analyses need to have at least 300 words or 30 lines.
PLEASE DO ON EACH CASE ON SEPARATE PAGES.
CASE 2
Case #2: Shopify: Answer questions: 6-16, 6,17, 6-18, & 6-19
Case analyses need to have at least 300 words or 30 lines.
EVRYTHING IS BEEN ATTACHED.
had dropped out of high school at the age of 17 to work as a
programming apprentice at Siemens-decided to build his own
e-commerce platform from scratch. He came up with something
much simpler, faster. and more visually pleasing than anything
from existing web design vendors.
Snowdevil.com’s sales were meager at best. But Lutke and
Lake quickly realized that the most valuable entity they possessed
was the platform beneath Snowdevil. So in 2006 they launched
Shopify as a platform for creating online stores. The going was
slow at first, but as they continued to improve the platform with
innovative tools, the client base grew steadily. Shopify also de
veloped a corporate culture based on authenticity, free thinking,
and what the company calls the “trust battery”-a perceptual
gauge of an individual’s potential based less on what they’ve
already done and more on what they might do in the future.
The Anti-Amazon
Building the Shopify e-commerce platform required carefully
defining what that platform is. But key to Shopify’s strategy is
also to define what the platform is not. In short, Shopify is not
a marketplace. Although Shopify sets up and runs e-commerce
operations for DTC companies, it operates in the shadows,
siiently and invisibly. So when customers visit Leesa.com to buy
a mattress. every interaction take place with Leesa, the company
and brand. Customers browsing for temporary tattoos at Tattly.
com know only that they are experiencing a selection of creative,
high-quality temporary tattoos exclusive to Tattly. When OTC
brands sell on Amazon-whether fulfilled by Amazon or by the
third-party vendors-customers are buying from Amazon, and
the brands themselves gain little by way of brand equity. But
visitors to the e-commerce stores powered by Shopify typically
have no idea that Shopify even exists, let alone that it’s the com
pany behind the engine that drives their interactions. The DTC
brand itself stands out, not the platform.
Shopify thinks of itself as the anti-Amazon, not because t
is against the e-commerce giant but because it offers OTC
companies a path to selling their goods that is so different in
concept and outcome. Although Amazon takes care of ev
erything down to operations and fulfillment, vendors don’t
so much build their own brands as they do Amazon’s. As
Amazon has grown, more sellers have complained openly
that they have little control over their sales, customer rela
tions, and the data generated from shopping. In many cases,
controlling those assets has allowed Amazon to develop
private-label brands that compete directly against its sellers’
brands. With Shopify, the merchant, not the marketplace,
owns access to the end user.
Being a non-marketplace e-commerce platform gives Shopify
a unique competitive advantage: Shopify is neutral. It interfaces
with and even plugs into numerous existing marketplaces but
doesn’t favor any. And short of monitoring to prevent illegal activity
on the part of vendors, Shopify does not interfere in their busi
nesses. This neutrality has allowed Shopify to easily interface with
the likes of Pinterest, lnstagram, Facebook, Amazon, and numer
ous other companies that feature their own marketplaces. Thus,
Shopify clients have access to any and all partner marketplaces.
A Big Boost from Lipstick
Since going public, Shopify’s growth has accelerated. The com
pany got its biggest publicity lift in August 2018, when the cover
of Forbes featured Kylie Jenner in a black business suit with
the headline “America’s Women Billionaires.” The cover story
described how Jenner would become the youngest-ever self
made billionaire at age 21 by leveraging her fame into a cosmetics
empire. More important, the article noted that Jenner’s online store,
kyliecosmet1cs.com, was powered by Shopify. Less than one year
after joining Shopify, Kylie Cosmetics had gone from selling its
signature lip kits to selling a full line of more than 50 different
cosmetics products generating more than $300 million in annual
sales. Paying tribute to the power of Jenner’s fame as a factor in the
young brand’s success, Forbes also pointed out that Shopify was
the e-commerce platform behind online stores for Drake, Justin
Bieber, and Jenner’s own half-sister Kim Kardashian West.
More recently, Shopify has taken things to an entirely new
lever,feleasing a range of new tools that let small and medium
sized businesses better compete with e-commerce giants. These
include Shopify Ping-a powerful customer service tool that lets
merchants interact with customers over Facebook Messenger –
and Dynamic Checkout-a checkout system that eliminates
roadblocks that lead customers to abandon their carts. Although
small businesses and startups are still the backbone of Shopify, the
company now offers Shopify Plus-an e-commerce platform and
services for companies with revenues of $1 million or more each
year.
Today, just four years after the company went public, Shopify
hosts more than 800,000 active client stores that have sold
more than $100 billion worth of merchandise. During that same
period, its stock price has increased by 600 percent, giving the
company a value of more than 822 billion. For its efforts,
Shopify’s cut of client store sales came to more than $1 billion last
year, making it the youngest software-as-a-service company ever to
reach the billion-dollar revenue mark. “The 21st-century brand is
the direct-to-consumer brand,” says Shopify’s chief marketing
officer. “We run the gamut of a retail operating system,” he says,
indicating that the company intends to be a major force in powering
DTC companies for a long time to come.
Despite its momentum, Shopify faces plenty of challenges
ahead. For starters, Amazon recently launched its own Shopify
fighter, Amazon Storefronts. Billed as “a new way for small and
medium-sized businesses to sell products directly through
Amazon,” Storefronts highlights small businesses and their
collections of unique products in a separate section. And although
Shopify has a clear lead in the end-to-end e-commerce platform
business, some analysts speculate that its model would be easy to
replicate. In fact, many of the companies that Shopify partners with
to provide process pieces for its e-commerce platform – such
as PayPal and MailChimp-already possess data that could
allow them to expand the e-commerce services they provide
to their own OTC clients. Forgoing short-term profits, Shopify
continues to invest heavily in Shopify Plus, international expansion,
and
e-commerce
innovations
platform
it believes
provider.
will continue to make it the leading
Questions for Discussion:
6-16
6-17
6-18
6-19
Compare and contrast the nature of the business market
structure and demand relative to consumer market
structure and demand for Shopify’s services.
Discuss how a potential client for Shopify might go
through the business buyer decision.
How does the concept of the buying center apply to
Shopify?
How much of a threat does competition pose in
Shopify’s future?
Company Case Shopify: An E-commerce Giant That Doesn’t
Sell to End Users
What do Budweiser, Tesla, The New
York Times, Bombas Socks, and Kylie
Cosmetics have in common? Each
company sells direct-to-consumer (OTC)
merchandise primarily online. But more,
each has an online store created,
managed, and powered by Shopify-the
biggest e-commerce company that most
people have never heard of. In the age of
OTC companies. Shopify is behind-the-
scenes business that takes care of
everything for anyone wanting to sell
something online-a genuine end-to-end
commerce platform for everyone from the
young entrepreneur who has never started
a company lo large, well-known–corpora
tions needing an online store.
The concept is simple. For a monthly fee,
Shopify helps individuals or corporations
sell their merchandise online. It supplies
everything merchants need to go online,
including customizable store templates,
inventory management systems,
analytics, payment processing, and
shipping. Shopify also provides
consultative services and a network of
partners to handle manufacturing,
promotion, and order fulfillment. Shopify’s
platform not only sells merchandise
directly from the merchant’s online store
or mobile app, it plugs into a growing
number of broader platforms, including
online marketplaces like Amazon, social
media channels like lnstagram Stories,
and even brickand-mortar locations. The
system is completely cloud-based,
which means zero investment in
hardware and software. It also means
that business owners can manage things
from anywhere on any device with an
internet connection. In short, Shopify’s
mission is to make e-commerce easier and
better for everyone.
Although that mission seems a bit lofty,
Shopify is well on its way. In 2015, the
nearly 10-year-old company went public
at a value of $1.3 billion. The preceding
year, Shopify’s 140,000 stores had sold
more than $3. 7 billion worth of
merchandise. And Shopify has been lauded
by experts and organizations the world over
for its growth and impact, including being
named as one of the world’s most
innovative companies by Fast Company this
year. How has Shopify come so far so fast
yet remain relatively unknown to the
average consumer?
From Snowboards to Startups
It all started in the early 2000s in Ottawa,
Quebec, when Tobi Lutke and Scott Lake
met and bonded over their love of technol
ogy and snowboarding. The pair joined
forces to open Snowdevil, an onhne store
selling high-end snowboards. Building the
site proved to be an exercise in
frustration. Working with popular
software options of the day, such as
Microsoft Commerce and Yahoo! Stores,
was difficult and expensive. So Lutke-who
Shopify
Case
Questions for Discussion:
6-16: Compare and contrast the nature of the business market structure and demand relative to consumer market structure and demand for Shopify’s services.
6-17: Discuss how a potential client for Shopify might go through the business buyer decision.
6-18: How does the concept of the buying center apply to Shopify?
6-19: How much of a threat does competition pose in Shopify’s future?
2
This is a B2B sale, that facilitates the B2C sale for others.
Industrial demand caused by
consumer demand.
Derived Demand
Distribution and Organizational Marketing Lecture
6
THE BUYING
CENTER
6-18
BUYING CENTER MEMBERS
Marketing- When a purchasing decision has an effect on the
marketability of the firm’s product.
Manufacturing- Responsible for determining the feasibility
& economic considerations of producing end products.
Research & development- Involved in initial development
of products & processes & set broad specifications for
components & materials criteria.
General management- Top management is likely to be involved when the purchase situation is unusual.
Purchasing- Specialists with negotiation expertise & close working relationships with suppliers. They are generally dominant decision makers.
WHO MAKES ORGANIZATIONAL
BUYING DECISIONS?
Initiators: Perceive a problem /opportunity that may require
the purchase of a new product/service.
Users: People who must use or work with the product/service,
they often influence the purchase decision.
Influencers: Provide information for evaluating alternative
products & suppliers, they play a major role in
determining the specifications & the criteria to use.
Gatekeepers: Control the flow of information to other people
involved in the purchasing process.
Buyers: They have the authority to contact suppliers &
negotiate purchases.
Deciders: The person with the final authority to make a
purchase decision.
THE BUYING CENTER
Initiator: Recognizes that some company problem can be
solved by acquiring a product/service.
Gatekeeper: Problem or product expert.
Influencer: “Has a say” if purchase is made or not.
Deciders: People who say “yes” or “no” to purchase.
Purchaser: Concerned with obtaining product/service.
User: Concerned with using product/service.
TECHNICAL BUYING INFLUENCE
Role: To eliminate alternatives
Characteristics: Focuses on quantifiable
aspects of product & service
Gatekeeper
Can only say “no,” not “yes”
Focus: Product specifications
ECONOMIC BUYING INFLUENCE
Role: Gives final approval
Characteristics: Access to money
Can release money
Veto power
Focus: Total organization
Bottom line
Competition
Shopify: 31% Market Share
WooCommerce (8% and gaining)
Magneto
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Textbook Questions:
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Core brand values are the organizational beliefs and what the organization stands for. It serves as a guide for the brand’s story, actions, behaviors, and decision-making process.
What is Googles?
https://element-360.com/googles10corevalues/ & https://www.linkedin.com/pulse/brilliant-examples-company-values-amazon-google-microsoft-j-d-meier
Google’s Core Values:
Focus on the user and all else will follow.
It’s best to do one thing really, really well.
Fast is better than slow.
Democracy on the web works.
You don’t need to be at your desk to need an answer.
You can make money without doing evil.
There’s always more information out there.
The need for information crosses all borders.
You can be serious without a suit.
Great just isn’t good enough.
We want to work with great people
Technology innovation is our lifeblood
Be actively involved; you are Google
Don’t take success for granted
Earn customer trust and user loyalty and respect every day
Sustainable long-term growth and profitability are key to our success
Google cares about and supports the communities where we work and live
Branding is IMPORTANT in Product Strategies (4Ps)
Five Product Levels
Core Benefit
The fundamental service or benefit that the customer is really buying
Basic Product
Marketers turn the core benefit into basic product
Other Google Products
Android Auto https://www.android.com/auto/
Apples: CarPlay https://www.apple.com/ios/carplay/
Google Apps
Google Camera https://play.google.com/store/apps/details?id=com.google.android.GoogleCamera&hl=en_US
Google Maps https://www.google.com/maps/@26.0621253,-80.376989,15z
And Many others
Other Google Products
Google self-driving cars and trucks (Waymo)
https://waymo.com/tech/ (2 videos)
What is the Future?:
What do you think of self-driving cars? Google has invested more in this technology than anyone else.
Will Google Glass be beneficial to workers who do not have their hands free – they need to look something up while they are very active, e.g., surgeons, firefighters, aerobics instructors, etc.
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Other Google Products
Google Glass
https://www.google.com/glass/start/ (1 video plus information)
Additional Questions:
Should Google continue to pursue a wider-range of products? Some make money and some have not.
Google seems to like to go for the moonshot? Is this a good business strategy? (their semi-innovative products have a better success ratio)
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Other Google Products
Google Home ($25 – $290) or use Google Assistant App $90
https://assistant.google.com/learn/
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Other Google Products
Google Pixel 4: $799+
Other Google Products
Google Nest (internet, security cameras, temperature control, & speakers) https://store.google.com/us/product/google_nest_hub_max
Google Pixelbook (notebooks & tablets) https://store.google.com/us/product/google_pixelbook
Google Voice https://voice.google.com/u/0/about
Other Google Products
Google TV
Google Cloud https://gsuite.google.com/learn-more/workplace-2020.html
Google Earth https://www.google.com/earth/
Google Flight Simulator
Google Art https://artsandculture.google.com/
Google Public Data https://www.google.com/publicdata/directory
Google Scholar
Google Translate
Google’s Latest
Project Soli (hand movement radar)
Project Jacquard (computers in your jeans) https://www.theloop.ca/google-just-unveiled-some-insane-new-technology/
Drone Delivery
Walmart has struck deals with three drone operators to test how the technology could be used for on-demand deliveries and to help it better compete with Amazon.
It is testing different drone uses, from dropping off groceries to delivering Covid-19 at-home test kits.
Amazon recently got approval from the Federal Aviation Administration to operate its own drone fleet.
United Parcel Service and Alphabet-owned Wing also have FAA approval for drone delivery.
UBER
Amazon
UPS
Product discovery wars 2020: Google vs. Amazon
Google renamed its Shopping Express product discovery tool to Google Shopping, and improved capabilities to make it easier for consumers to find and buy products online.
Currently, more consumers use Amazon instead of Google to research products because Amazon has made it so easy for them to shop and buy and thus Google’s market share of search ad revenue is expected to drop from 73% this year to 70% by 2021, while Amazon’s market share will grow from 12.9% to 15.9% in the same period, according to an eMarketer forecast.
Google’s defensive move to improve its product discovery platform benefits both online retailers and traditional retailers with online stores. By removing the friction from online browsing to purchase, shoppers can now more easily buy products directly through Google’s shopping platform (like they would on Amazon or another retailer’s website).
Second, traditional stores with a solid online presence can get their products in front of more shoppers.
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