Evaluate De Graaf’s chances for catching up to competitors in the online marketplace.
DeGraaf Office Supplies is a national retailer of office supplies, equipment, and furnishings. The company opened its first store in 1932, in Columbus, Ohio. Currently, DeGraaf has 300 stores nationwide. Owner-managers purchase and run franchised stores. Kim DeGraaf, the founder’s daughter, currently is President and CEO of the corporation. Sales revenues grew steadily during the past decade, but 2011 sales were quite disappointing, down 8% from 2010. The company’s stock price has also taken a big hit during the past few months. Kim resisted developing an Internet presence for the company, and it appears now that this was a mistake. Online sales of office supplies are growing rapidly, particularly in the business-to-business sector as business organizations are finding it faster and more efficient to enter their office supply orders electronically. The following is a conversation between Kim and Peter Brewer, Vice President of Marketing. Peter: ‘‘Kim, I warned you that we were going to see sales decline if we didn’t hurry up and get on the Internet. The established brick-and-mortar businesses in many industries are suffering.’’ Kim: ‘‘You were right, Peter. I think I’ve been overly concerned about security and privacy issues. I also didn’t really believe that online sales in our industry would take off the way they have. I hope we’re not too late, because I want to move ahead immediately in developing a Web site. I know other companies have a jump start but hopefully our brand name recognition and reputation for quality will help us. I have contracted with a consulting firm to start the Web site development and am going to give a press release this afternoon about our plans. Fortunately, our current enterprise software has electronic commerce features, and the consultants tell me that our Internet site should be ready for business in about 6 months. I need you to have your staff prepare an analysis of our competitor Web sites. I would also like as much information as possible related to providing retail and business customers with security and privacy over online transactions with us.’’ Peter: ‘‘This is great news! I will get my staff busy at once, providing you and the consulting team with the information they need. There will be a lot of decisions to make. I’ve studied all the office supply Web sites and they are organized in a variety of ways. For instance, some sites provide customers with the option to select a type of product such as ballpoint pens and then show the vendor options in that category, while other sites are organized around the vendors. This type of site allows customers to select a vendor name, such as Paper Mate, and then lists all the product offerings from that vendor. Hopefully, the consultants have a lot of experience with business Web sites and they can help us with many of these issues.’’
1. Visit the Web sites of two office supply stores on the Internet. Develop a set of four to five criteria for evaluating their Web site.
2. Evaluate DeGraaf’s chances for catching up to competitors in the online marketplace.
3. Discuss the privacy and security concerns for companies doing business electronically. Make recommendations to DeGraaf Office Supplies for addressing these concerns.
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