Case study in business at college level Essay Example | Topics and Well Written Essays - 1250 words

Case study in business at college level - Essay Example Penetration or predatory pricing is the opposite and means setting a low price in anticipation of future cost declines in order to grab a bigger share of a growing market (Bagozzi 54-55). Price skimming works for the products Gadgets2u.com sells (line 58). Predatory pricing works best once the level of sales starts to decline, with the effect of discouraging any potential competitors. 2.a) Gadgets2u.com's problem (lines 44-46) is not in the structure but in the lines of communication between project teams and staff (lines 39-43). This is common in fast-growing e-businesses and the solution is "not to automatically transform the flat structure into a formal hierarchy, but to make the hyperarchical system efficient by making it easier for project team leaders to communicate with each other, collect and evaluate the relevant information, and make decisions" (Amor 48). Gadgets2u.com's matrix structure is hyperarchical1 and characterized by flexibility, fast information flow, and quick decision-making. Improving communication efficiency will make the structure scalable or adaptable to growth. 2.b) Homeworking (or telecommuting) is done by five employees (line 138), but if their productivity is low and having them in the office will improve it, or if they have new assignments where their office presence is needed, then bringing them to the office is acceptable. Otherwise, this will backfire. The employee(s) may resign or be demotivated, leading to lower productivity and worse problems. Homeworking is a good way to keep and motivate good employees, especially creative types or those with health problems or multiple roles2 (family or community). Good employees are satisfied if they know they are more productive working from home and their contributions to the company's success are recognized. It is assumed that workers are given full management support and resources (communication lines, clear assignments, etc.). The appraisal system (line 137) will give Tom and the management more information on this matter (if homeworking is productive, motivating, or not). 3.a) Holding too much stock is a problem because stock costs money and space (which costs something and is therefore also money). Declining future sales may affect profits. Holding too little stock is also a problem because if the goods sell very well, the market will be frustrated with the company. Market satisfaction seems to be a problem lately (lines 119-120), although distribution is the main reason for that. 3.b) Just-in-time (JIT) stock control, currently under study by the management (lines 98-99) is one of the ultimate goals of any e-business (Amor 49). JIT is a system where inflow and outflow of stocks are balanced, or where the company has almost exactly the amount of goods that the market wants to buy (Germane 192). JIT requires near-perfect coordination between Gadgets2u.com and the suppliers, and demands accurate knowledge of market behavior which, because it is very dynamic, is difficult to predict. This ideal of