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The Alignment of E-Commerce Strategies with Corporate Strategy: A case study
Hamideh Iraj1
Sahar Najafikhah2
University of Tehran, Faculty of Management
Abstract:
In this paper, we studied six international companies and investigated their strategies and how it supports corporate
strategy.Corporate strategy is articulated according to Porter's generic strategies that are commonly used by businesses
to achieve and maintain competitive advantage including Cost Leadership, Differentiation and Focus. Walmart, Apple
and Southwest Airlines were selected to stand for aforementioned strategies respectively. In the second section we
discussed about innovation, growth and alliance strategies. Amazon, SAS and Star Alliance were selected for
aforementioned strategies respectively.
1-1 Introduction to Walmart
Wal-Mart Stores, Inc., branded as Walmart, is an American multinational retail corporation that runs chains of large
discount department stores and warehouse stores. The company is the world's second largest public corporation,
according to the Fortune Global 500 list in 2013, the biggest private employer in the world with over two million
employees, and is the largest retailer in the world. Walmart remains a family-owned business, as the company is
controlled by the Walton family, who own over 50 percent of Walmart. It is also one of the world's most valuable
companies.
The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the
New York Stock Exchange in 1972. It is headquartered in Bentonville, Arkansas.Walmart is also the largest grocery
retailer in the United States. In 2009, it generated 51 percent of its US$258 billion sales in the U.S. from grocery
business. It also owns and operates the Sam's Club retail warehouses in North America. (Walmart, 2013)
1-2 Walmart Story
Wal-Mart got into e-commerce more than a decade ago, but its online sales still account for just a fraction of its $469
billion in totalrevenue. Wal-Mart’s Web sales came in at $7.7 billion last year, compared with more than $61 billion
for Amazon, according to trade publication Internet Retailer.
In short,Walmart still badly lags Amazon in e-commerce and they are playing catch up. You have to go pretty deep
into the article before you see this excerpt: Wal-Mart maintains that it isn’t trying to replicate Amazon’s business
model, which it believes would be a mistake considering it has 4,100 stores within five miles of two-thirds of the U.S.
1 hamideh.iraj@ut.ac.ir
2 snajafikhah@ut.ac.ir
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population, Mr. Anderson (president of Walmart.com) said. Instead, Wal-Mart plans to combine its stores, existing
distribution centers, and new facilities into what it calls its ‘next generation fulfillment network.
Omni-channel is an initiative by brick and mortar retailers to better integrate their stores and e-commerce channels.
So a retailer might support buy online, pick-up at store; or order online, deliver to home from a store; several other
fulfillment paths are also possible.
Some of the world’s largest retailers are turning their stores into mini distribution hubs to help them compete better
online against Amazon.com. Instead of fulfilling Web orders from warehouses hundreds of miles from shoppers’
homes, companies including Wal-Mart, Best Buy and Gap are routing orders to stores nearby. Store employees pick
products from shelves,pack them into boxes and drop them into waiting FedEx and UPS trucks that zip off to homes
a few miles away. The trend,known as Ship from Store, saves money through shorterdelivery routes. More important,
it speeds deliveries, avoids costly markdowns and recoups sales that have been lost to Amazon, the world’s largest
Internet retailer.
This ship from store strategy won’t be easy. In order to intelligently allocate inventory from stores, retailers need to
implement a technology platformknown as distributed ordermanagement (DOM). Walmart is investing $430 million
in what they call its “global-technology platform.” A major piece of the investment will be in a proprietary DOM,
although commercially available DOM solutions can be bought from companies like Manhattan Associates,Oracle,
and IBM (Manhattan Associates and Oracle are ARC customers). (Amazon Vs. Walmart: E-Commerce Vs. Omni-
Channel Logistics, 2013)
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1-3 Walmart Summary
Company Name Walmart
Industry retailer
Founded 1962, Rogers, Arkansas, United States
Company Rank in Fortune 500-
2013
Rank: 1,Previous rank: 2
Headquarters Bentonville, Arkansas , United States
Website Walmart.com
Website Rank Global rank: 146, Rank in United States: 22 on 2013-12-21
Main Strategy Overall Cost leadership, Omni-Channel Logistics
How strategies are aligned Walmart uses it physical stores that are widely spread as a warehouse for E-
commerce enabled business so that it can reduce transportation costs foronline
sales.Therefore, it hopes to go furtherin online business which is a big concern
for Walmart.
Main Advantages The company is the world's second largest public corporation, the biggest
private employer in the world with over two million employees, and is the
largest retailer in the world.
Main problems Wal-Mart got into e-commerce more than a decade ago,but its online sales still
account for just a fraction of its $469 billion in total revenue. Wal-Mart’s Web
sales came in at $7.7 billion last year, compared with more than $61 billion for
Amazon, according to trade publication Internet Retailer.
Main rival Amazon.com, eBay.com
The strategy to overcome the
problems
1. Buying IT companies
a. April 2011 acquisition of Kosmix
In 2011 Wal-Mart bought Kosmix, a Silicon Valley firm whose technology
searches and analyzes online social data, such as Twitter posts,to personalize
web content. It then folded Kosmix into @WalMartLabs, a technology group
tasked with advancing the integration ofWal-Mart’s stores and web and mobile
channels. (Wal-Mart names a new CEO, 2013)
b. In 2011, it acquired Boulder, Colo.-based OneRiot, a start-up that
targets ads to socialmedia, and Sydney,Australia-based Grabble,
which designs technology that enables in-store purchases with
mobile phones. (Bentonville to Silicon Valley: Walmart Thinks
Like a Start-up, 2012)
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c. In January, @WalmartLabs bought another start-up: Portland,
Ore.-based Small Society, a developer of mobile apps
(Bentonville to Silicon Valley: Walmart Thinks Like a Start-up,
2012)
2. Buying companies active in Ecommerce Market
Yihaodian is doing well in China’s thriving e-commerce scene. The
acquisition of Yihaodian not only gives Walmart China immediate
exposure to grocery e-commerce in China, it also puts it in a good
position for future growth ahead of its multinational competitors.
(Walmart Forays into Chinese E-Commerce, 2012)
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2-1 Introduction to Apple
Apple Inc., formerly Apple Computer, Inc., is an American multinational corporation headquartered in Cupertino,
California, that designs,develops,and sells consumerelectronics,computer software and personalcomputers.Its best-
known hardware products are the Mac line of computers, the iPod music player, the iPhone smartphone, and the iPad
tablet computer. Its consumer software includes the OS X and iOS operating systems,the iTunes media browser, the
Safari web browser, and the iLife and iWork creativity and productivity suites.
The company was founded on April 1, 1976, and incorporated as Apple Computer, Inc. on January 3, 1977. The word
"Computer" was removed from its name on January 9, 2007, the same day Steve Jobs introduced the iPhone,reflecting
its shifted focus towards consumer electronics.
Apple is the world's second-largest information technology company by revenue after Samsung Electronics, and the
world's third-largest mobile phone maker after Samsung and Nokia. (Apple Inc., 2013)
2-2 Apple Story
Role of Internet in Apples Strategies
The internet has been a significant tool for Apples Inc. in a number of ways. One of these ways is that it has been part
of Apples marketing strategies .The internet has provided apples with access to a worldwide market through websites,
advertising blogs and networking sites. Apart from having a wide scope these channelof marketing is also relatively
cheaper. The internet has also provided a distribution channel for Apples products. The company has established
online stores through which it avails its software products to the customers. Today, apples customers do not need to
physically present themselves to apple stores when they need software applications and other services as the get the
help they need from the online Apple stores.
Finally, anyone cannot fail to recognize that the internet is also an important part of Apples products.One factor that
has made Apples computing devices appealing is their straightforward access to the internet. This implies that Apple
has not only used the internet to sell its product but have made it a selling feature for its products.Apples boxed to the
internet its Mac computer brand which gave this brand internet dominance. The aim of Apples internet strategy was
to give Apple’s consumer more satisfying experience on the net.Apples also introduced software tools meant to make
its product more compatible to the internet. These are such as; iTunes and iTools.
Online user Types and E-Commerce Considerations
Apple is company with a worldwide scope and therefore its e-customers must run into millions. Most users of Apples
online business transaction are individual customers of middle and higher backgrounds.This group is highly educated
and conversant with most of the online applications. However this does not eliminate e-commerce consideration that
are necessary for Apples. One of them is security of the transaction. With the advancement of technology, online
frauds have become prevalent .Therefore, Apple needs to protect it customers from this fraudsters who are waiting to
take advantage ofthe online transactions.Anotherconsideration is business usercontrol. This refers to how easy it is
for the company customers to use the e-transaction. The design of the site must provide convenience and ease of use
to the customers.Anotherconsideration is scalability. This means that the company e-commerce site must be adequate
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for all the company’s customers.Since Apple is a multinational company, it has a relatively large number of customers
and therefore scalability is an important consideration. Apple also makes consideration for the search capability of the
site. It must remain easier for the customer to find what they are looking for. The final consideration is integration.
This refers to how well electronic transaction integrates with other business operations.Apple has tried to integrate its
entire business process. (An e-Business Analysis of Apple Inc, 2013)
2-3 Apple Summary
Company Name Apple
Industry A company that designs, develops, and sells consumer electronics, computer
software and personal computers
Founded April 1, 1976, Cupertino, California
Company Rank in Fortune - 2013 Rank: 6, Previous rank: 17
Headquarters Cupertino, California
Website apple.com
Website Rank Global rank: 39, Rank in United States: 25 on 2013-12-23
Main Strategies Being a product-oriented company, differentiation
How strategies are aligned Apple acquired some companies to work in high tech so that it can always bring
in new high-tech services,integrate its devices and apps with internet and social
media.
Main Advantages Apple runs one of the world’s great e-commerce sites: apple.com and many
popular services including iTunes and iTunes U
Main problems their works are being copied by all their big competitors
very high expectations from customers
their main problem is not about sales and ecommerce
Main rivals mobile phones: Samsung, BlackBerry,
E-commerce: Amazon, eBay
The strategy to overcome the
problems
Work harder! And bring new innovations. These new innovations might not
work well at the beginning and their competitiveness has always been an issue.
Partly because Apple never acquired a big company (after Next and Pixar)
Acquiring companies to overcome the shortcomings
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3-1 Introduction to Southwest Airlines
Southwest Airlines Co. is a major U.S. airline and the world's largest low-cost carrier, headquartered in Dallas, Texas.
The airline was established in 1967 and adopted their current name in 1971. The airline has more than 46,000
employees as of August 2012 and operates more than 3,400 flights per day. As of June 5, 2011, it carries the most
domestic passengers of any U.S. airline. As of August 2013, Southwest Airlines has scheduled service to 89
destinations in 42 states and Puerto Rico. (Southwest Airlines, 2013)
3-2 Southwest Airlines Story
Here is a summary of Southwest Airlines activities:
Rapid Rewards loyalty scheme
Southwest Airlines is the counterpart and one of many to have implemented a new concept in an already existing
loyalty scheme of earning points by shopping at partner locations and earning miles in different ways, making its
loyalty program more useful. The new Rapid Rewards loyalty scheme changes the way in which miles are earned.
While before a customer would earn miles by the amounts of miles flown, many companies, including Southwest
Airlines, have now switched to a systemin which one earns miles according to dollars spent.This change has opened
a whole new world of options on which Southwest Airlines is now capitalizing upon.
Promotional Sales Websites
In 2011 we have seen companies such as Virgin America, Southwest, Lufthansa Brazil, Estonian Air and British
Midland join Groupon and othersimilar services,and offer discounted prices.Arguably the best result so far achieved
in this new trend, although not on Groupon itself, was by Estonian Air which had to stop selling tickets through
Cherry.ee, which the largest Estonian Groupon kind site. The airline was planning to sell coupons for 38 euro which
would provide clients with a 64 euro discount. The airline had aimed to sell 2,500 vouchers but within 24 hours
managed to sell 6,500 vouchers, representing approximately 250,000 euro of generated sales within 24 hours. An
impressive result seeing that the company only operates 7 planes.
Mobility
Similarly to United Airlines but for a different feature, Southwest Airlines offer push alerts for its flight offers,
indicating when there is a new offer for a flight or by customer selected flights available for a certain price.
Additionally, they offer ancillaries such as being able to reserve a car through the applications. Southwest is also
among the airlines who have introduced a fully integrated booking engine which can handle a flight reservation
without having to Access the web site of the company to complete the transaction at any time. (Airline e-commerce
Travel Trends, Current trends and future predictions, 2011)
Introduction to Point-to-point transit
Point-to-point transit refers to a transportation systemin which a plane, bus, or train travels directly to a destination,
rather than going through a central hub. This differs from the spoke-hub distribution paradigm in which the
transportation goes to a central location where passengers change to another train, bus, or plane to reach their
destination.
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In the airline industry,Southwest Airlines in the United States is a prominent example of an airline that uses the point-
to-point transit model. For example, there is a route between Jacksonville International Airport in Jacksonville,
Florida, and Norfolk International Airport in Norfolk, Virginia. Currently, Southwest Airlines actually uses a hybrid
system, flying point-to-point routes, but also connecting passengers through several smaller hubs at Phoenix Sky
Harbor, Las Vegas McCarran, Dallas Love, Houston Hobby, Chicago Midway, Baltimore/Washington, Lambert-St.
Louis, Atlanta, and a few others.
It is doubtful that there is any pure point-to-point airline, as most have at least a "home-based" airport where most
flights originate or depart, which becomes a de facto hub, whetherthat is the intention or not.The United States airline
industry was point-to-point until deregulation in the late 1960s/early 1970s when they switched to the hub concept.
Simplifying routes and emphasizing point-to-point transit instead oftransfers at hubs is a strategy oflow-cost industry.
(Marketing in the Growing Low-Cost Airline Industry, 2011)
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3-3 Southwest Airlines Summary
Company Name Southwest Airlines
Industry airline
Founded March 16, 1967
Company Rank in Fortune - 2013 Rank: 164 , Previous rank: 167
Headquarters Dallas, Texas
Website www.southwest.com
Website Rank Global rank: 771, Rank in United States: 187 on 2013-12-26
Main Strategies Focussed cost leadership,
How strategies are aligned Southwest Airlines uses a wide variety of strategies to reinforce the low-cost
corporate strategy, some newer ones include: joining Groupon, Setting a
different frequent flyer program. The most important strategy is a hybrid
systemof spoke-hub and point-to point transit
Main Advantages Low-cost airline history began with southwest airlines on 1967. Therefore,
southwest has set its business modelforcost reduction fromthe very beginning.
Main rivals Delta, Jetblue, Alaska Airlines, Frontier, United and US Airway
The activities to overcome the
problems/reinforce the strategy
Low-cost airlines use a set of strategies to reduce costs mentioned in
(Marketing in the Growing Low-Cost Airline Industry, 2011)
In 2011, companies such as Virgin America, Southwest, Lufthansa Brazil,
Estonian Air and British Midland join Groupon and other similar services,and
offer discounted prices.
Southwest Airlines is the counterpart and one of many to have implemented a
new concept in an already existing loyalty scheme of earning points by
shopping at partner locations and earning miles in different ways, making its
loyalty program more useful.
4- 1 Introduction to Amazon
In July 1995, Amazon.com began as an online bookseller; by September 1995, the company was selling $20,000 per
week. After nearly three years as an online bookseller, the company began aggressively diversifying its offerings to
include other product categories beyond books, initially adding music, videos, toys, and electronics. These
diversifications were followed by the launch of several other stores, such as home improvement and software. In
parallel with such product diversifications, in October 1998, Amazon.com expanded geographically by launching its
first international sites,Amazon.co.uk and Amazon.de through the acquisition of the UK-based online bookstore book
pages and the German-owned Telebook. The rationale behind this was Amazon.com's strategy of “get big fast,” to
turn Amazon into the biggest mass merchandiser in the online world (Ritala, Golnam, & Wegmann, 2013)
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4-2 Amazon history
Rapid and continuous innovation in the electronic commerce area has been Amazon's heritage. For instance, in 1995
Amazon was the first company to truly harness the power of the rapidly expanding Internet to provide an online book
retailing service to consumers. Amazon has also been the first company to enable consumers to search for, and order,
hard-to-find books as easily as best sellers. Amazon followed up this innovation rapidly by offering its customers
``one-click''. The ``one- click'' program streamlines the buying process by storing detailed customer information,
including credit card numbers. Furthermore, Amazon has been the first online company to use collaborative-filtering
technology, which analyses a customer's purchases and suggests other books that people with similar purchase
histories have bought.Such valuable information has proven very effective in capturing new markets online and mass
customization. In addition, Amazon has been the first online company to introduce two innovative processes to
facilitate customer purchases. Through its acquisition of Junglee Corp in August 1998, Amazon has developed
comparison-shopping that gives customers a way of finding products that Amazon does not selldirectly. Reciprocally,
Amazon's affiliates program, which numbers over a quarter of a million participants, directs customers from other
sites to the Amazon store site. In this program, participants receive a commission for each referred purchase made
from their site. Amazon has also been the first online company to provide customers with reminders and tracking of
their orders through e-mail alerts.
Consequently, Amazon's innovative history suggests that the company could become a dominant provider of online
shopping behavior in the future. As such, Amazon has stayed ahead of the competition by rapid and continuous
innovation. It must be pointed out all these innovations are quickly imitated by other e-commerce companies. It is
worth noting that imitation is not a one way traffic. Amazon.com has been accused of designing a front page for their
online toy retailing venture that looked as if it had been taken directly from eToy.com store site.Moreover, in October
1988, Wal-Mart filed a lawsuit against Amazon.com alleging violations of trade secrets, relating to Amazon.com
targeting a specific combination of individuals for their expertise and insider knowledge of Wal-Marts distribution,
data warehousing, and merchandise management systems (mellahi & Johnson, 2000).
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4-3 Amazon Summary
Company Name Amazon
Industry Online retailing
Founded 1994
Company Rank in Fortune 500-
2013
Rank:49
Previous rank: 56
Headquarters Seattle, Washington ,united states
Website Amazon.com
Website Rank Global rank: 8 Rank in United States:5
Main Strategy Rapid and continuous innovation
How strategies are aligned • Increase collaboration with channel partners
• Enhanced integrated marketing – Communicate to more clients in the global
markets
• Forward-integration – Promote and manipulate where products and services
are being sold
• Continued focus on R&D – Innovative strategies and devices to provide a
competitive advantage in the electronics marketplace
• Customer Service
Main Advantages Online payment system
Release more its own brand products and services
Increase services and product portfolio through acquisitions
Open more online stores in other countries
Physical presence
Main problems There is a growing body of evidence to suggest that Amazon.com and other
first movers in e-commerce are realizing that innovation per se is not enough
to capitalize on first mover advantages.
Main rival Walmart. eBay
The strategy to overcome the
problems
Amazon.com has hired a large number of lawyers to patent its innovations
(Dugan, 2000). Amazon.com, after a three-year wait, has received a patent for
``affiliate programs''. It also holds the patent on `one-click'' buying. The issue
of patenting innovations in e-commerce, however,is a complex one.First, what
constitutes an innovation in e-commerce? Dugan (2000) noted that what are
called innovations in e-commerce are no more than straightforward business
practices and processes: ``take a basic idea, do it via the Internet, and voila‫ء‬
and voilà – a patent”.
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5-1 Introduction to Scandinavian Airlines System
Scandinavian Airlines or SAS, previously Scandinavian Airlines System, is the flag carrier of Denmark, Norway, and
Sweden, and the largest airline in Scandinavia.
Part of the SAS Group and headquartered at Stockholm-Arlanda Airport in Sigtuna, Sweden, the airline operates 182
aircraft to 90 destinations.The airline's main hubs are at Copenhagen-Kastrup Airport,Oslo-Gardermoen Airport, and
Stockholm-Arlanda Airport. Minor hubs also exist at Bergen-Flesland International Airport, Gothenburg-Landvetter
Airport, Stavanger-Sola Airport and Trondheim-Værnes
In 2012, SAS carried 25.9 million passengers,achieving revenues of SEK 36 billion. This makes it the ninth-largest
airline in Europe. The SAS fleet consists of Airbus A319, A320, A321, A330 and A340, Boeing 737 Classic and Next
Generation, and Bombardier CRJ900 aircraft.
The airline was founded in 1946 as a consortium to pool the transatlantic operations of Det Danske Luftfartselskab,
Svensk Interkontinental Lufttrafik and Det Norske Luftfartselskap. The consortium was extended to cover European
and domestic cooperation two years later. In 1951, all the airlines were merged to create SAS.
5-2 SAS story
SAS (Scandinavian Airlines System) was founded in August 1946 as a consortiumof the nationalairlines of Denmark
Norway and Sweden. Over the years, SAS has established itself as an innovative, pioneering airline. In the 1960s, it
became the first airline in the world to fly over the North Pole and in 1962 was awarded the Christopher Columbus
Prize - often called the Nobel Prize of communication - in recognition of its pioneering transpolar flights. In 1952,
SAS was the first airline in the world to introduce Tourist Class, a discounted ticket with certain conditions.The entire
airline industry later followed suit. With a new strategic platform launched in 2011, SAS wants to continue to build
on its positive trend and ultimately set a higher standard within aviation.
With its previous strategy, Core SAS, the airline has reduced unit costs by 23% since 2008, whilst at the same time
achieving the highest customer satisfaction in 11 years and position itself as Europe's most punctualairline in the past
years. This has provided SAS with a platform that the new strategy builds on and strengthen.The airline launched its
new focus, the strategy 4Excellence, which has the goal to by 2015 achieve excellence within four cornerstones:
Commercial Excellence; Sales Excellence; Operational Excellence; and People Excellence. SAS is in the forefront of
the industry in relation to environmental concerns and aims to
 Be seen as the most environment-conscious airline in Europe
 Have 20% lower emissions by 2020 with traffic growth included
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 Have the industry's most efficient fuel saving program
In line with IATA's vision, the overarching long-term goal for SAS' environmental work is to have zero emissions no
later than 2050.
SAS was founded in the spirit of international cooperation. This same spirit was applied in May 1997 when SAS
founded Star Alliance togetherwith Air Canada, Lufthansa, United Airlines and Thai Airways International, offering
convenient connections throughout an integrated global traffic sys tem (Scandinavian Airlines (SAS) selects TCS as
its Strategic IT Partner , 2013).
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5-3 SAS Summary
Company Name SAS(Scandinavian Airlines System)
Industry Airline
Founded 1946
Company Rank in Fortune - 2013 Rank:2
Previous rank: 3
Headquarters Stockholm-Arlanda airport, Sigtuna, Sweden
Website Flysas.com
Website Rank Global rank:14,095 rank in Norway:167
Main Strategies growth in sales, cost reductions within customer service
How strategies are aligned Cultural turnaround through customer
orientation and greater commitment
Focusing on airline operations
Concentration on Northern Europe
Harmonization and development of customer offerings
Competitiveness in all parts of the business
Main Advantages SAS has tried to found its development activities on what is believed to be
genuine understanding of the customers' true needs. This has been done by
integrating methods for customer satisfaction modeling and other market
research techniques to form a strategic framework supporting the service
development activities that will make SAS ready to enter the twenty-first
century.
Main problems transform and optimize its IT processes, applications and infrastructure
Main rivals Braathens, skyways, Finnair, Goldaenair
The strategy to overcome the
problems
TCS has been selected by SAS, Scandinavia's leading airline, to help transform
and optimize its IT processes, applications and infrastructure. TCS will
implement its proprietary cloud-based solutions to simplify and standardize the
SAS IT landscape. Tata Consultancy Services, the leading IT services,
consulting and business solutions organization, announced that it has been
selected by SAS, Scandinavia's leading airline, to help transform and optimize
its IT processes, applications and infrastructure. TCS will implement its
proprietary cloud-based solutions to simplify and standardize the SAS IT
landscape. The initiative is a part of the SAS “4 Excellence Next Generation”
strategy,aimed at improving the competitiveness of the SAS Group. Through
this partnership, SAS will also tap into TCS’ Aviation and Digital Innovation
Labs to develop solutions addressing the needs of the new digital consumer.
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6-1 Introduction to Star Alliance
Star Alliance is the world's first and largest global airline alliance, headquartered in Frankfurt am Main, Germany and
led by current CEO Mark Schwab. Founded in 1997, its name and emblem represent the five founding airlines. The
current member airlines are Adria Airways, Aegean Airlines, Air Canada, Air China, Air New Zealand, All Nippon
Airways, Asiana Airlines, Austrian Airlines, Avianca, Brussels Airlines, Copa Airlines, Croatia Airlines, EgyptAir,
Ethiopian Airlines, Eva Air, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Shenzhen Airlines, Singapore
Airlines, South African Airways, Swiss International Air Lines, TAM Airlines (until March 30, 2014), TAP Portugal,
Thai Airways International, Turkish Airlines, United Airlines and US Airways (until March 30, 2014) and the future
members are Air India which will join in summer 2014 and Avianca Brazil which will join in the first half of 2014
and will join as an affiliate of the Avianca brand.Star Alliance has since grown considerably and the current members
with more than 21,100 daily departures combined. These flights reach 1,329 airports in more than 150 countries, with
an annual passenger number of 678.5 million (wikipedia, 2013).
6-2 Star alliance story
Star Alliance today unveiled plans to become the first global airline partnership to adopt the digital environment and
provide travelers with important support information to ease travel through the 12-member, 15-airline alliance.
The wireless flight information system scheduled to be launched later this year will provide real-time information
through Short Messaging Service (SMS) or email about any Star Alliance-operated flight, whether it is on time,
delayed or cancelled. At the same time a flight notification service will also be introduced, giving customers the
freedom to decide how and when they want to be informed about the status of their Star Alliance flight, or if another
party should be notified.
At a meeting of its Chief Executive Board in London, Star Alliance also announced the immediate availability of
downloadable, automatically updated timetables for PCs and personaldigital assistants displaying the more than 9,000
daily flights operated by the Star Alliance member airlines.
"Our research confirms that ourkey customers,frequent international travellers, use technology extensively and expect
us to give themthe technological solutions that can simplify their travel. We will deliver a service that allows them to
easily interact globally with Star Alliance around the clock, seven days a week, using devices with which they are
familiar," said Paul Van Doninck, Director, Star Alliance Seamless Service and Product Development. Mr. Van
Doninck heads the development of e-commerce initiatives within the global airline partnership.
Star Alliance plans to implement electronic services step-by-step and has developed its public website
www.staralliance.com as a portal for the new services. The website has a new visual design and has been enhanced
so that users will find it easy to navigate and use.
A downloadable timetable service launched today by StarAlliance enables customers to interact with the Star Alliance
website and pack their PCs or personal digital assistants (PDAs) with useful information to take with them on their
trips. More than 9,000 daily flights are being listed, making it simple to plan or change an itinerary while on the road.
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Every time the PC or PDA is synchronized, any updates to the timetable will be automatically performed.
Star Alliance's own IT network, StarNet, that links the computer systems of all member airlines allowing non -
compatible systems to talk to each other, plays a critical role in providing global wireless services to Star Alliance
customers. It provides the infrastructure giving customers access to systems operated by all the member carriers.
"Travelers need quick access to important flight information wherever they find themselves. Star Alliance is in a
unique position to provide that support, and often before the traveler may even know he or she needs it," said Paul
Van Doninck.
"Our members have a clear understanding of customer needs in different regions of the world and have developed
wireless services that specifically address those needs. We are going to leverage the partner airlines' technical and
regional expertise to offer electronic services worldwide and across the alliance. The global Star Alliance offerings
will comprise the best of what our individual members are providing in their home markets, with additional Star
Alliance-specific services. These support services will be available no matter how many borders are being crossed or
how many alliance partners are included in the customer's itinerary. It will be a major step forward in our efforts to
provide seamless service to frequent international travellers," he said (texasstaralliance.com, 2013).
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6-3 Star alliance Summary
Company Name Star alliance
Industry Airlines industry
Founded 1997
Headquarters Frankfurt am Main, Germany
Website www.staralliance.com
Website Rank Global rank:24970
Rank in united states:20332
Main Strategies Executing leadership in managing a portfolio of alliance products and
services using an agreed process.
How strategies are aligned Code-sharing, as mentioned earlier, expanded within these newly developed
alliances. This practice allowed for an immediate virtual growth in market
share and thus brought about the rise of super-alliances around the world.
More than 500 alliances were formed in the late 1990s. All of which were
ultimately consolidated into five multi carrier alliances that currently exist
today.
Main Advantages Star Alliance member airlines fly to more destinations than any otherairline
alliance in the world – which means easier travel and quicker connections
Main problems The client United Parcel Service Inc. (UPS) is a global leader in the use of
alternative fuels. The replacement cost of alternative fuel vehicles is often
cost prohibitive, which was the case in Texas. The client’s objective was to
deploy alternative fuel vehicles across the state benefitting both the
company and the state. The challenge was to pass legislation that cleared
the way for the client’s goals to be achieved.
Main rivals Sky team, one world
The strategy to overcome the
problems
 Build a coalition of support
 Draft legislation and identify sponsors
 Develop effective messaging to articulate the winning points
 Create various support materials including handouts and mailings
 Identify and prepare witnesses for committee hearings
 Meet with members of the legislature to advocate for the
legislation
 Draft amendments to the bill and make strategic adjustments
18
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The alignment of e commerce strategies with corporate strategy a case study

  • 1. 1 The Alignment of E-Commerce Strategies with Corporate Strategy: A case study Hamideh Iraj1 Sahar Najafikhah2 University of Tehran, Faculty of Management Abstract: In this paper, we studied six international companies and investigated their strategies and how it supports corporate strategy.Corporate strategy is articulated according to Porter's generic strategies that are commonly used by businesses to achieve and maintain competitive advantage including Cost Leadership, Differentiation and Focus. Walmart, Apple and Southwest Airlines were selected to stand for aforementioned strategies respectively. In the second section we discussed about innovation, growth and alliance strategies. Amazon, SAS and Star Alliance were selected for aforementioned strategies respectively. 1-1 Introduction to Walmart Wal-Mart Stores, Inc., branded as Walmart, is an American multinational retail corporation that runs chains of large discount department stores and warehouse stores. The company is the world's second largest public corporation, according to the Fortune Global 500 list in 2013, the biggest private employer in the world with over two million employees, and is the largest retailer in the world. Walmart remains a family-owned business, as the company is controlled by the Walton family, who own over 50 percent of Walmart. It is also one of the world's most valuable companies. The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. It is headquartered in Bentonville, Arkansas.Walmart is also the largest grocery retailer in the United States. In 2009, it generated 51 percent of its US$258 billion sales in the U.S. from grocery business. It also owns and operates the Sam's Club retail warehouses in North America. (Walmart, 2013) 1-2 Walmart Story Wal-Mart got into e-commerce more than a decade ago, but its online sales still account for just a fraction of its $469 billion in totalrevenue. Wal-Mart’s Web sales came in at $7.7 billion last year, compared with more than $61 billion for Amazon, according to trade publication Internet Retailer. In short,Walmart still badly lags Amazon in e-commerce and they are playing catch up. You have to go pretty deep into the article before you see this excerpt: Wal-Mart maintains that it isn’t trying to replicate Amazon’s business model, which it believes would be a mistake considering it has 4,100 stores within five miles of two-thirds of the U.S. 1 hamideh.iraj@ut.ac.ir 2 snajafikhah@ut.ac.ir
  • 2. 2 population, Mr. Anderson (president of Walmart.com) said. Instead, Wal-Mart plans to combine its stores, existing distribution centers, and new facilities into what it calls its ‘next generation fulfillment network. Omni-channel is an initiative by brick and mortar retailers to better integrate their stores and e-commerce channels. So a retailer might support buy online, pick-up at store; or order online, deliver to home from a store; several other fulfillment paths are also possible. Some of the world’s largest retailers are turning their stores into mini distribution hubs to help them compete better online against Amazon.com. Instead of fulfilling Web orders from warehouses hundreds of miles from shoppers’ homes, companies including Wal-Mart, Best Buy and Gap are routing orders to stores nearby. Store employees pick products from shelves,pack them into boxes and drop them into waiting FedEx and UPS trucks that zip off to homes a few miles away. The trend,known as Ship from Store, saves money through shorterdelivery routes. More important, it speeds deliveries, avoids costly markdowns and recoups sales that have been lost to Amazon, the world’s largest Internet retailer. This ship from store strategy won’t be easy. In order to intelligently allocate inventory from stores, retailers need to implement a technology platformknown as distributed ordermanagement (DOM). Walmart is investing $430 million in what they call its “global-technology platform.” A major piece of the investment will be in a proprietary DOM, although commercially available DOM solutions can be bought from companies like Manhattan Associates,Oracle, and IBM (Manhattan Associates and Oracle are ARC customers). (Amazon Vs. Walmart: E-Commerce Vs. Omni- Channel Logistics, 2013)
  • 3. 3 1-3 Walmart Summary Company Name Walmart Industry retailer Founded 1962, Rogers, Arkansas, United States Company Rank in Fortune 500- 2013 Rank: 1,Previous rank: 2 Headquarters Bentonville, Arkansas , United States Website Walmart.com Website Rank Global rank: 146, Rank in United States: 22 on 2013-12-21 Main Strategy Overall Cost leadership, Omni-Channel Logistics How strategies are aligned Walmart uses it physical stores that are widely spread as a warehouse for E- commerce enabled business so that it can reduce transportation costs foronline sales.Therefore, it hopes to go furtherin online business which is a big concern for Walmart. Main Advantages The company is the world's second largest public corporation, the biggest private employer in the world with over two million employees, and is the largest retailer in the world. Main problems Wal-Mart got into e-commerce more than a decade ago,but its online sales still account for just a fraction of its $469 billion in total revenue. Wal-Mart’s Web sales came in at $7.7 billion last year, compared with more than $61 billion for Amazon, according to trade publication Internet Retailer. Main rival Amazon.com, eBay.com The strategy to overcome the problems 1. Buying IT companies a. April 2011 acquisition of Kosmix In 2011 Wal-Mart bought Kosmix, a Silicon Valley firm whose technology searches and analyzes online social data, such as Twitter posts,to personalize web content. It then folded Kosmix into @WalMartLabs, a technology group tasked with advancing the integration ofWal-Mart’s stores and web and mobile channels. (Wal-Mart names a new CEO, 2013) b. In 2011, it acquired Boulder, Colo.-based OneRiot, a start-up that targets ads to socialmedia, and Sydney,Australia-based Grabble, which designs technology that enables in-store purchases with mobile phones. (Bentonville to Silicon Valley: Walmart Thinks Like a Start-up, 2012)
  • 4. 4 c. In January, @WalmartLabs bought another start-up: Portland, Ore.-based Small Society, a developer of mobile apps (Bentonville to Silicon Valley: Walmart Thinks Like a Start-up, 2012) 2. Buying companies active in Ecommerce Market Yihaodian is doing well in China’s thriving e-commerce scene. The acquisition of Yihaodian not only gives Walmart China immediate exposure to grocery e-commerce in China, it also puts it in a good position for future growth ahead of its multinational competitors. (Walmart Forays into Chinese E-Commerce, 2012)
  • 5. 5 2-1 Introduction to Apple Apple Inc., formerly Apple Computer, Inc., is an American multinational corporation headquartered in Cupertino, California, that designs,develops,and sells consumerelectronics,computer software and personalcomputers.Its best- known hardware products are the Mac line of computers, the iPod music player, the iPhone smartphone, and the iPad tablet computer. Its consumer software includes the OS X and iOS operating systems,the iTunes media browser, the Safari web browser, and the iLife and iWork creativity and productivity suites. The company was founded on April 1, 1976, and incorporated as Apple Computer, Inc. on January 3, 1977. The word "Computer" was removed from its name on January 9, 2007, the same day Steve Jobs introduced the iPhone,reflecting its shifted focus towards consumer electronics. Apple is the world's second-largest information technology company by revenue after Samsung Electronics, and the world's third-largest mobile phone maker after Samsung and Nokia. (Apple Inc., 2013) 2-2 Apple Story Role of Internet in Apples Strategies The internet has been a significant tool for Apples Inc. in a number of ways. One of these ways is that it has been part of Apples marketing strategies .The internet has provided apples with access to a worldwide market through websites, advertising blogs and networking sites. Apart from having a wide scope these channelof marketing is also relatively cheaper. The internet has also provided a distribution channel for Apples products. The company has established online stores through which it avails its software products to the customers. Today, apples customers do not need to physically present themselves to apple stores when they need software applications and other services as the get the help they need from the online Apple stores. Finally, anyone cannot fail to recognize that the internet is also an important part of Apples products.One factor that has made Apples computing devices appealing is their straightforward access to the internet. This implies that Apple has not only used the internet to sell its product but have made it a selling feature for its products.Apples boxed to the internet its Mac computer brand which gave this brand internet dominance. The aim of Apples internet strategy was to give Apple’s consumer more satisfying experience on the net.Apples also introduced software tools meant to make its product more compatible to the internet. These are such as; iTunes and iTools. Online user Types and E-Commerce Considerations Apple is company with a worldwide scope and therefore its e-customers must run into millions. Most users of Apples online business transaction are individual customers of middle and higher backgrounds.This group is highly educated and conversant with most of the online applications. However this does not eliminate e-commerce consideration that are necessary for Apples. One of them is security of the transaction. With the advancement of technology, online frauds have become prevalent .Therefore, Apple needs to protect it customers from this fraudsters who are waiting to take advantage ofthe online transactions.Anotherconsideration is business usercontrol. This refers to how easy it is for the company customers to use the e-transaction. The design of the site must provide convenience and ease of use to the customers.Anotherconsideration is scalability. This means that the company e-commerce site must be adequate
  • 6. 6 for all the company’s customers.Since Apple is a multinational company, it has a relatively large number of customers and therefore scalability is an important consideration. Apple also makes consideration for the search capability of the site. It must remain easier for the customer to find what they are looking for. The final consideration is integration. This refers to how well electronic transaction integrates with other business operations.Apple has tried to integrate its entire business process. (An e-Business Analysis of Apple Inc, 2013) 2-3 Apple Summary Company Name Apple Industry A company that designs, develops, and sells consumer electronics, computer software and personal computers Founded April 1, 1976, Cupertino, California Company Rank in Fortune - 2013 Rank: 6, Previous rank: 17 Headquarters Cupertino, California Website apple.com Website Rank Global rank: 39, Rank in United States: 25 on 2013-12-23 Main Strategies Being a product-oriented company, differentiation How strategies are aligned Apple acquired some companies to work in high tech so that it can always bring in new high-tech services,integrate its devices and apps with internet and social media. Main Advantages Apple runs one of the world’s great e-commerce sites: apple.com and many popular services including iTunes and iTunes U Main problems their works are being copied by all their big competitors very high expectations from customers their main problem is not about sales and ecommerce Main rivals mobile phones: Samsung, BlackBerry, E-commerce: Amazon, eBay The strategy to overcome the problems Work harder! And bring new innovations. These new innovations might not work well at the beginning and their competitiveness has always been an issue. Partly because Apple never acquired a big company (after Next and Pixar) Acquiring companies to overcome the shortcomings
  • 7. 7 3-1 Introduction to Southwest Airlines Southwest Airlines Co. is a major U.S. airline and the world's largest low-cost carrier, headquartered in Dallas, Texas. The airline was established in 1967 and adopted their current name in 1971. The airline has more than 46,000 employees as of August 2012 and operates more than 3,400 flights per day. As of June 5, 2011, it carries the most domestic passengers of any U.S. airline. As of August 2013, Southwest Airlines has scheduled service to 89 destinations in 42 states and Puerto Rico. (Southwest Airlines, 2013) 3-2 Southwest Airlines Story Here is a summary of Southwest Airlines activities: Rapid Rewards loyalty scheme Southwest Airlines is the counterpart and one of many to have implemented a new concept in an already existing loyalty scheme of earning points by shopping at partner locations and earning miles in different ways, making its loyalty program more useful. The new Rapid Rewards loyalty scheme changes the way in which miles are earned. While before a customer would earn miles by the amounts of miles flown, many companies, including Southwest Airlines, have now switched to a systemin which one earns miles according to dollars spent.This change has opened a whole new world of options on which Southwest Airlines is now capitalizing upon. Promotional Sales Websites In 2011 we have seen companies such as Virgin America, Southwest, Lufthansa Brazil, Estonian Air and British Midland join Groupon and othersimilar services,and offer discounted prices.Arguably the best result so far achieved in this new trend, although not on Groupon itself, was by Estonian Air which had to stop selling tickets through Cherry.ee, which the largest Estonian Groupon kind site. The airline was planning to sell coupons for 38 euro which would provide clients with a 64 euro discount. The airline had aimed to sell 2,500 vouchers but within 24 hours managed to sell 6,500 vouchers, representing approximately 250,000 euro of generated sales within 24 hours. An impressive result seeing that the company only operates 7 planes. Mobility Similarly to United Airlines but for a different feature, Southwest Airlines offer push alerts for its flight offers, indicating when there is a new offer for a flight or by customer selected flights available for a certain price. Additionally, they offer ancillaries such as being able to reserve a car through the applications. Southwest is also among the airlines who have introduced a fully integrated booking engine which can handle a flight reservation without having to Access the web site of the company to complete the transaction at any time. (Airline e-commerce Travel Trends, Current trends and future predictions, 2011) Introduction to Point-to-point transit Point-to-point transit refers to a transportation systemin which a plane, bus, or train travels directly to a destination, rather than going through a central hub. This differs from the spoke-hub distribution paradigm in which the transportation goes to a central location where passengers change to another train, bus, or plane to reach their destination.
  • 8. 8 In the airline industry,Southwest Airlines in the United States is a prominent example of an airline that uses the point- to-point transit model. For example, there is a route between Jacksonville International Airport in Jacksonville, Florida, and Norfolk International Airport in Norfolk, Virginia. Currently, Southwest Airlines actually uses a hybrid system, flying point-to-point routes, but also connecting passengers through several smaller hubs at Phoenix Sky Harbor, Las Vegas McCarran, Dallas Love, Houston Hobby, Chicago Midway, Baltimore/Washington, Lambert-St. Louis, Atlanta, and a few others. It is doubtful that there is any pure point-to-point airline, as most have at least a "home-based" airport where most flights originate or depart, which becomes a de facto hub, whetherthat is the intention or not.The United States airline industry was point-to-point until deregulation in the late 1960s/early 1970s when they switched to the hub concept. Simplifying routes and emphasizing point-to-point transit instead oftransfers at hubs is a strategy oflow-cost industry. (Marketing in the Growing Low-Cost Airline Industry, 2011)
  • 9. 9 3-3 Southwest Airlines Summary Company Name Southwest Airlines Industry airline Founded March 16, 1967 Company Rank in Fortune - 2013 Rank: 164 , Previous rank: 167 Headquarters Dallas, Texas Website www.southwest.com Website Rank Global rank: 771, Rank in United States: 187 on 2013-12-26 Main Strategies Focussed cost leadership, How strategies are aligned Southwest Airlines uses a wide variety of strategies to reinforce the low-cost corporate strategy, some newer ones include: joining Groupon, Setting a different frequent flyer program. The most important strategy is a hybrid systemof spoke-hub and point-to point transit Main Advantages Low-cost airline history began with southwest airlines on 1967. Therefore, southwest has set its business modelforcost reduction fromthe very beginning. Main rivals Delta, Jetblue, Alaska Airlines, Frontier, United and US Airway The activities to overcome the problems/reinforce the strategy Low-cost airlines use a set of strategies to reduce costs mentioned in (Marketing in the Growing Low-Cost Airline Industry, 2011) In 2011, companies such as Virgin America, Southwest, Lufthansa Brazil, Estonian Air and British Midland join Groupon and other similar services,and offer discounted prices. Southwest Airlines is the counterpart and one of many to have implemented a new concept in an already existing loyalty scheme of earning points by shopping at partner locations and earning miles in different ways, making its loyalty program more useful. 4- 1 Introduction to Amazon In July 1995, Amazon.com began as an online bookseller; by September 1995, the company was selling $20,000 per week. After nearly three years as an online bookseller, the company began aggressively diversifying its offerings to include other product categories beyond books, initially adding music, videos, toys, and electronics. These diversifications were followed by the launch of several other stores, such as home improvement and software. In parallel with such product diversifications, in October 1998, Amazon.com expanded geographically by launching its first international sites,Amazon.co.uk and Amazon.de through the acquisition of the UK-based online bookstore book pages and the German-owned Telebook. The rationale behind this was Amazon.com's strategy of “get big fast,” to turn Amazon into the biggest mass merchandiser in the online world (Ritala, Golnam, & Wegmann, 2013)
  • 10. 10 4-2 Amazon history Rapid and continuous innovation in the electronic commerce area has been Amazon's heritage. For instance, in 1995 Amazon was the first company to truly harness the power of the rapidly expanding Internet to provide an online book retailing service to consumers. Amazon has also been the first company to enable consumers to search for, and order, hard-to-find books as easily as best sellers. Amazon followed up this innovation rapidly by offering its customers ``one-click''. The ``one- click'' program streamlines the buying process by storing detailed customer information, including credit card numbers. Furthermore, Amazon has been the first online company to use collaborative-filtering technology, which analyses a customer's purchases and suggests other books that people with similar purchase histories have bought.Such valuable information has proven very effective in capturing new markets online and mass customization. In addition, Amazon has been the first online company to introduce two innovative processes to facilitate customer purchases. Through its acquisition of Junglee Corp in August 1998, Amazon has developed comparison-shopping that gives customers a way of finding products that Amazon does not selldirectly. Reciprocally, Amazon's affiliates program, which numbers over a quarter of a million participants, directs customers from other sites to the Amazon store site. In this program, participants receive a commission for each referred purchase made from their site. Amazon has also been the first online company to provide customers with reminders and tracking of their orders through e-mail alerts. Consequently, Amazon's innovative history suggests that the company could become a dominant provider of online shopping behavior in the future. As such, Amazon has stayed ahead of the competition by rapid and continuous innovation. It must be pointed out all these innovations are quickly imitated by other e-commerce companies. It is worth noting that imitation is not a one way traffic. Amazon.com has been accused of designing a front page for their online toy retailing venture that looked as if it had been taken directly from eToy.com store site.Moreover, in October 1988, Wal-Mart filed a lawsuit against Amazon.com alleging violations of trade secrets, relating to Amazon.com targeting a specific combination of individuals for their expertise and insider knowledge of Wal-Marts distribution, data warehousing, and merchandise management systems (mellahi & Johnson, 2000).
  • 11. 11 4-3 Amazon Summary Company Name Amazon Industry Online retailing Founded 1994 Company Rank in Fortune 500- 2013 Rank:49 Previous rank: 56 Headquarters Seattle, Washington ,united states Website Amazon.com Website Rank Global rank: 8 Rank in United States:5 Main Strategy Rapid and continuous innovation How strategies are aligned • Increase collaboration with channel partners • Enhanced integrated marketing – Communicate to more clients in the global markets • Forward-integration – Promote and manipulate where products and services are being sold • Continued focus on R&D – Innovative strategies and devices to provide a competitive advantage in the electronics marketplace • Customer Service Main Advantages Online payment system Release more its own brand products and services Increase services and product portfolio through acquisitions Open more online stores in other countries Physical presence Main problems There is a growing body of evidence to suggest that Amazon.com and other first movers in e-commerce are realizing that innovation per se is not enough to capitalize on first mover advantages. Main rival Walmart. eBay The strategy to overcome the problems Amazon.com has hired a large number of lawyers to patent its innovations (Dugan, 2000). Amazon.com, after a three-year wait, has received a patent for ``affiliate programs''. It also holds the patent on `one-click'' buying. The issue of patenting innovations in e-commerce, however,is a complex one.First, what constitutes an innovation in e-commerce? Dugan (2000) noted that what are called innovations in e-commerce are no more than straightforward business practices and processes: ``take a basic idea, do it via the Internet, and voila‫ء‬ and voilà – a patent”.
  • 12. 12 5-1 Introduction to Scandinavian Airlines System Scandinavian Airlines or SAS, previously Scandinavian Airlines System, is the flag carrier of Denmark, Norway, and Sweden, and the largest airline in Scandinavia. Part of the SAS Group and headquartered at Stockholm-Arlanda Airport in Sigtuna, Sweden, the airline operates 182 aircraft to 90 destinations.The airline's main hubs are at Copenhagen-Kastrup Airport,Oslo-Gardermoen Airport, and Stockholm-Arlanda Airport. Minor hubs also exist at Bergen-Flesland International Airport, Gothenburg-Landvetter Airport, Stavanger-Sola Airport and Trondheim-Værnes In 2012, SAS carried 25.9 million passengers,achieving revenues of SEK 36 billion. This makes it the ninth-largest airline in Europe. The SAS fleet consists of Airbus A319, A320, A321, A330 and A340, Boeing 737 Classic and Next Generation, and Bombardier CRJ900 aircraft. The airline was founded in 1946 as a consortium to pool the transatlantic operations of Det Danske Luftfartselskab, Svensk Interkontinental Lufttrafik and Det Norske Luftfartselskap. The consortium was extended to cover European and domestic cooperation two years later. In 1951, all the airlines were merged to create SAS. 5-2 SAS story SAS (Scandinavian Airlines System) was founded in August 1946 as a consortiumof the nationalairlines of Denmark Norway and Sweden. Over the years, SAS has established itself as an innovative, pioneering airline. In the 1960s, it became the first airline in the world to fly over the North Pole and in 1962 was awarded the Christopher Columbus Prize - often called the Nobel Prize of communication - in recognition of its pioneering transpolar flights. In 1952, SAS was the first airline in the world to introduce Tourist Class, a discounted ticket with certain conditions.The entire airline industry later followed suit. With a new strategic platform launched in 2011, SAS wants to continue to build on its positive trend and ultimately set a higher standard within aviation. With its previous strategy, Core SAS, the airline has reduced unit costs by 23% since 2008, whilst at the same time achieving the highest customer satisfaction in 11 years and position itself as Europe's most punctualairline in the past years. This has provided SAS with a platform that the new strategy builds on and strengthen.The airline launched its new focus, the strategy 4Excellence, which has the goal to by 2015 achieve excellence within four cornerstones: Commercial Excellence; Sales Excellence; Operational Excellence; and People Excellence. SAS is in the forefront of the industry in relation to environmental concerns and aims to  Be seen as the most environment-conscious airline in Europe  Have 20% lower emissions by 2020 with traffic growth included
  • 13. 13  Have the industry's most efficient fuel saving program In line with IATA's vision, the overarching long-term goal for SAS' environmental work is to have zero emissions no later than 2050. SAS was founded in the spirit of international cooperation. This same spirit was applied in May 1997 when SAS founded Star Alliance togetherwith Air Canada, Lufthansa, United Airlines and Thai Airways International, offering convenient connections throughout an integrated global traffic sys tem (Scandinavian Airlines (SAS) selects TCS as its Strategic IT Partner , 2013).
  • 14. 14 5-3 SAS Summary Company Name SAS(Scandinavian Airlines System) Industry Airline Founded 1946 Company Rank in Fortune - 2013 Rank:2 Previous rank: 3 Headquarters Stockholm-Arlanda airport, Sigtuna, Sweden Website Flysas.com Website Rank Global rank:14,095 rank in Norway:167 Main Strategies growth in sales, cost reductions within customer service How strategies are aligned Cultural turnaround through customer orientation and greater commitment Focusing on airline operations Concentration on Northern Europe Harmonization and development of customer offerings Competitiveness in all parts of the business Main Advantages SAS has tried to found its development activities on what is believed to be genuine understanding of the customers' true needs. This has been done by integrating methods for customer satisfaction modeling and other market research techniques to form a strategic framework supporting the service development activities that will make SAS ready to enter the twenty-first century. Main problems transform and optimize its IT processes, applications and infrastructure Main rivals Braathens, skyways, Finnair, Goldaenair The strategy to overcome the problems TCS has been selected by SAS, Scandinavia's leading airline, to help transform and optimize its IT processes, applications and infrastructure. TCS will implement its proprietary cloud-based solutions to simplify and standardize the SAS IT landscape. Tata Consultancy Services, the leading IT services, consulting and business solutions organization, announced that it has been selected by SAS, Scandinavia's leading airline, to help transform and optimize its IT processes, applications and infrastructure. TCS will implement its proprietary cloud-based solutions to simplify and standardize the SAS IT landscape. The initiative is a part of the SAS “4 Excellence Next Generation” strategy,aimed at improving the competitiveness of the SAS Group. Through this partnership, SAS will also tap into TCS’ Aviation and Digital Innovation Labs to develop solutions addressing the needs of the new digital consumer.
  • 15. 15 6-1 Introduction to Star Alliance Star Alliance is the world's first and largest global airline alliance, headquartered in Frankfurt am Main, Germany and led by current CEO Mark Schwab. Founded in 1997, its name and emblem represent the five founding airlines. The current member airlines are Adria Airways, Aegean Airlines, Air Canada, Air China, Air New Zealand, All Nippon Airways, Asiana Airlines, Austrian Airlines, Avianca, Brussels Airlines, Copa Airlines, Croatia Airlines, EgyptAir, Ethiopian Airlines, Eva Air, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Shenzhen Airlines, Singapore Airlines, South African Airways, Swiss International Air Lines, TAM Airlines (until March 30, 2014), TAP Portugal, Thai Airways International, Turkish Airlines, United Airlines and US Airways (until March 30, 2014) and the future members are Air India which will join in summer 2014 and Avianca Brazil which will join in the first half of 2014 and will join as an affiliate of the Avianca brand.Star Alliance has since grown considerably and the current members with more than 21,100 daily departures combined. These flights reach 1,329 airports in more than 150 countries, with an annual passenger number of 678.5 million (wikipedia, 2013). 6-2 Star alliance story Star Alliance today unveiled plans to become the first global airline partnership to adopt the digital environment and provide travelers with important support information to ease travel through the 12-member, 15-airline alliance. The wireless flight information system scheduled to be launched later this year will provide real-time information through Short Messaging Service (SMS) or email about any Star Alliance-operated flight, whether it is on time, delayed or cancelled. At the same time a flight notification service will also be introduced, giving customers the freedom to decide how and when they want to be informed about the status of their Star Alliance flight, or if another party should be notified. At a meeting of its Chief Executive Board in London, Star Alliance also announced the immediate availability of downloadable, automatically updated timetables for PCs and personaldigital assistants displaying the more than 9,000 daily flights operated by the Star Alliance member airlines. "Our research confirms that ourkey customers,frequent international travellers, use technology extensively and expect us to give themthe technological solutions that can simplify their travel. We will deliver a service that allows them to easily interact globally with Star Alliance around the clock, seven days a week, using devices with which they are familiar," said Paul Van Doninck, Director, Star Alliance Seamless Service and Product Development. Mr. Van Doninck heads the development of e-commerce initiatives within the global airline partnership. Star Alliance plans to implement electronic services step-by-step and has developed its public website www.staralliance.com as a portal for the new services. The website has a new visual design and has been enhanced so that users will find it easy to navigate and use. A downloadable timetable service launched today by StarAlliance enables customers to interact with the Star Alliance website and pack their PCs or personal digital assistants (PDAs) with useful information to take with them on their trips. More than 9,000 daily flights are being listed, making it simple to plan or change an itinerary while on the road.
  • 16. 16 Every time the PC or PDA is synchronized, any updates to the timetable will be automatically performed. Star Alliance's own IT network, StarNet, that links the computer systems of all member airlines allowing non - compatible systems to talk to each other, plays a critical role in providing global wireless services to Star Alliance customers. It provides the infrastructure giving customers access to systems operated by all the member carriers. "Travelers need quick access to important flight information wherever they find themselves. Star Alliance is in a unique position to provide that support, and often before the traveler may even know he or she needs it," said Paul Van Doninck. "Our members have a clear understanding of customer needs in different regions of the world and have developed wireless services that specifically address those needs. We are going to leverage the partner airlines' technical and regional expertise to offer electronic services worldwide and across the alliance. The global Star Alliance offerings will comprise the best of what our individual members are providing in their home markets, with additional Star Alliance-specific services. These support services will be available no matter how many borders are being crossed or how many alliance partners are included in the customer's itinerary. It will be a major step forward in our efforts to provide seamless service to frequent international travellers," he said (texasstaralliance.com, 2013).
  • 17. 17 6-3 Star alliance Summary Company Name Star alliance Industry Airlines industry Founded 1997 Headquarters Frankfurt am Main, Germany Website www.staralliance.com Website Rank Global rank:24970 Rank in united states:20332 Main Strategies Executing leadership in managing a portfolio of alliance products and services using an agreed process. How strategies are aligned Code-sharing, as mentioned earlier, expanded within these newly developed alliances. This practice allowed for an immediate virtual growth in market share and thus brought about the rise of super-alliances around the world. More than 500 alliances were formed in the late 1990s. All of which were ultimately consolidated into five multi carrier alliances that currently exist today. Main Advantages Star Alliance member airlines fly to more destinations than any otherairline alliance in the world – which means easier travel and quicker connections Main problems The client United Parcel Service Inc. (UPS) is a global leader in the use of alternative fuels. The replacement cost of alternative fuel vehicles is often cost prohibitive, which was the case in Texas. The client’s objective was to deploy alternative fuel vehicles across the state benefitting both the company and the state. The challenge was to pass legislation that cleared the way for the client’s goals to be achieved. Main rivals Sky team, one world The strategy to overcome the problems  Build a coalition of support  Draft legislation and identify sponsors  Develop effective messaging to articulate the winning points  Create various support materials including handouts and mailings  Identify and prepare witnesses for committee hearings  Meet with members of the legislature to advocate for the legislation  Draft amendments to the bill and make strategic adjustments
  • 18. 18 References (n.d.).InJ.Thompson,& F.Martin, Strategic Management:Awarenessand Change (5thed.,p.287). Cengage LearningEMEA. Airline e-commerceTravel Trends,Currenttrendsand futurepredictions.(2011, June).Retrievedfrom www.indracompany.com/.../neo6-airline-ecommerce-travel-trends-2.pdf Amazon Vs.Walmart:E-CommerceVs.Omni-ChannelLogistics.(2013). RetrievedfromForbes: http://www.forbes.com/sites/stevebanker/2013/10/04/amazon-vs-walmart-e-commerce-vs- omni-channel-logistics/ An e-BusinessAnalysisof AppleInc.(2013). Retrievedfrom http://customwritingtips.com/component/k2/item/7095-an-e-business-analysis-of-apple- inc.html AppleInc. (2013). RetrievedfromWikipedia:http://en.wikipedia.org/wiki/Apple_Inc. Bentonvilleto Silicon Valley: WalmartThinks Like a Start-up.(2012, May). RetrievedfromYahooFinance: http://finance.yahoo.com/news/bentonville-silicon-valley-walmart-thinks-160558490.html Marketing in the Growing Low-CostAirlineIndustry.(2011).Retrievedfrom http://repository.cesa.edu.co/bitstream/10726/420/2/TG00626.pdf mellahi,k.,&Johnson,M.(2000). Doesit pay to be a firstmoverine.commerce?The case of Amazon.com. managementdecision,445-452. Ritala,p.,Golnam,a., & Wegmann,A.(2013). Coopetition-basedbusinessmodels:The case of Amazon.com. IndustrialMarketing Management. Scandinavian Airlines(SAS) selectsTCSas its StrategicIT Partner. (2013). Retrievedfromarcweb: http://www.arcweb.com/project-wins/2013-09-12/scandinavian-airlines-sas-selects-tcs-as-its- strategic-it-partner--1.aspx SouthwestAirlines.(2013). RetrievedfromWikipedia:en.wikipedia.org/wiki/Southwest_Airlines texasstaralliance.com.(2013). CASESTUDIES. Retrievedfromtexasstaralliance: http://www.texasstaralliance.com/case.shtml Walmart.(2013). RetrievedfromWikipedia:http://en.wikipedia.org/wiki/Walmart WalmartForaysinto ChineseE-Commerce.(2012, April).RetrievedfromStores: www.stores.org/walmart-forays-chinese-e-commerce Wal-Martnamesa new CEO.(2013). RetrievedfromInternetRetailer: http://www.internetretailer.com/mobile/2013/11/25/wal-mart-names-new-ceo wikipedia.(2013). StarAlliance. Retrievedfromwikipedia:http://en.wikipedia.org/wiki/Star_Alliance