Reference no: EM132710836
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 pioneering first mover online that exploited an opportunity years before its competitors.
The Project
Teaming with Fry Multimedia (an e-commerce pioneer), Godiva.com (godiva.com) was created as a division of Godiva Chocolatier. The 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.
Godiva.com went through difficult times-testing e-commerce 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.
The major driving factors 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. Like other pioneers, Godiva had to build its Web site from scratch without EC-building tools. A partnership was made with Chocolatier Magazine, allowing Godiva@com to showcase articles and recipes from the magazine on its 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 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 ahead of the competition.
The Results
Godiva.com's online sales have been growing at a double digit rate every year, outpacing the company's "old economy" divisions, as well as the online stores of competitors.
Questions:
a) Why did Godiva decided to sell online? List the EC drivers in this case.
b) Classify Govida.com's business model. Considering the business situation, justify their model(s).
c) What strategies and activities Govida.com adopted to minimize the channel conflict and made the electronic commerce platform as a profitable one?
d) Visit https://www.godiva.com/. How user-friendly is the site?