斯坦佛商学院电子商务经典教学案例.pdf

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1、Case Writer Eric Mart prepared this case under the supervision of Professor Garth Saloner and Professor A.Michael Spence as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.The development of this case was managed by Mar

2、got Sutherland,Executive Director,Center for Electronic Business and Commerce,Stanford Graduate School of Business.Copyright 2000 by the Board of Trustees of the Leland Stanford Junior University.All rights reserved.To order copies or request permission to reproduce materials,email the Case Writing

3、Office at:cwogsb.stanford.edu or write:Case Writing Office,Graduate School of Business,Stanford University,Stanford,CA 94305-5015.No part of this publication may be reproduced,stored in a retrieval system,used in a spreadsheet,or transmitted in any form or by any means-electronic,mechanical,photocop

4、ying,recording,or otherwise-without the permission of the Stanford Graduate School of Business.Version:(B)03/16/00 GRADUATE SCHOOL OF BUSINESS STANFORD UNIVERSITY CASE NUMBER:EC-2 SEPTEMBER 1999 QRS CORPORATION The hardest thing to accomplish strategically is watching for the person or company that

5、comes out of left field with a new idea or innovative product.John Simon,Chief Executive Officer,QRS Corporation*On a July morning in 1999,John Simon,chief executive officer of QRS Corporation,reviewed figures for the quarter that had just ended on June 30:another ringing performance,with revenues a

6、nd profits up more than 40%over the prior years quarter.It was the latest chapter in a story of impressive growth for the Richmond,California company:over the last 5 five years,sales and profits had increased at a compound annual rate of more than 30%,and the companys stock price had doubled in the

7、last 12 months.(Exhibit 1)QRS was a leader in its field,providing business-to-business electronic commerce and merchandising management services to the U.S.retail industry.Simon believed that in order for the company to continue its success,both in the industry and the stock market,it would have to

8、maintain its high growth rate.However,he also recognized the law of large numbers:growing at 30%a year would become increasingly difficult.He attributed QRSs past success to its ability to execute a strategy that focused solely on the electronic commerce needs of the retail industry and emphasized s

9、ervices that generated a high rate of recurring revenues.Simon and his staff had identified several opportunities for significant growth.Though many market analysts were predicting a dramatic rise of Internet-based business-to-business commercesome expecting it to reach$1.3 trillion by 20031Simon do

10、ubted that the retail industry would move significantly in that direction.He was keeping an eye on Internet-related developments,but his near-term growth plans were focused elsewhere.JOHN SIMONS BACKGROUND Throughout a career spanning more than 20 years,Simon had been involved with the retail indust

11、ry.During his MBA studies at Harvard,he won the business schools Retailing Prize in 1980.Before coming to QRS,Simon had spent 10 years at Carter Hawley Hale Stores,Inc.,then a major department-store operator(whose assets were eventually acquired by Federated Department Stores,Inc.).He served as a bu

12、yer,store manager,and division vice president for its *Wall Street Transcript Corporation,“CEO Interview:John Simon,QRS Corporation,”4/29/99 1 Forrester Research,“Resizing On-line Business Trade,”11/98 QRS Corporation EC-2 p.2 Broadway Stores operation in southern California.Later,he worked for the

13、companys Information Services division,where he became a senior program manager.In that position,he supported the outsourcing of retail systems to clients such as Neiman Marcus,Woodward&Lothrop,and Holt H Renfrew.Simon joined the QRS founding team in 1987.Since that time,he had worked in nearly ever

14、y part of the company,from customer support to product development.In the early days,he was instrumental in developing business and operating plans,market strategies,and application development plans.In 1994,Simon was made executive vice president.Four years later,he became a director of the company

15、,and was named chief executive officer.From his days at Carter Hawley Hale,then at QRS,Simon had witnessed the retail industrys adoption of supply-chain automation and electronic commerce.THE U.S.RETAIL INDUSTRY AND SUPPLY-CHAIN AUTOMATION The U.S.retail industry,which accounted for nearly one-half

16、of all consumer spending,was characterized by slow growth and low margins.2 U.S.retail sales grew at an average annual compound rate of 5.5%from 1986 to 1997 and increased just 5%from 1997 to 1998.3 Net profit margins for most retail segments were typically in the low to middle single digits:departm

17、ent and discount stores,for instance,averaged 3.1%;grocery stores,2.2%;home improvement stores,4.7%;drug stores,2.6%;and apparel retailers,6.9%.4 Driven by these economics,cost reduction had become a key concern for retailers:a typical grocer,for instance,could nearly double its bottom line by cutti

18、ng costs by just 1%of sales.(Exhibits 2 and 3)In an effort to reduce inventory costs and improve supply-chain efficiency,major retailers began in the 1980s to adopt“quick response”the industrys term for a just-in-time approach to inventory managementas well as other techniques.Additional initiatives

19、 included efficient customer response(ECR),vendor-managed inventory(VMI),continuous replenishment process(CRP),and collaborative planning,forecasting,and replenishment(CPFR).Each of these depended critically on capturing and tracking product-specific data throughout the supply chain,with the ultimat

20、e goal of getting the right mix of goods to the right location at the right time,thus minimizing stock-outs(i.e.missed sales opportunities)and overstocks(i.e.markdowns).Two key elements of these initiatives were the use of Universal Product Codes(UPCs)and electronic data interchange(EDI).The UPC was

21、 created in the 1970s by the Uniform Code Council(UCC),5 a non-profit organization first established by grocery-industry manufacturers and retailers to standardize product codes.The UCC expanded its activities beyond groceries,bringing UPCs to all industries and retail segments.The standard UPC used

22、 in North America was a 12-digit code,which identified the product by manufacturer and other attributes.Moreover,each code could be uniquely represented by a symbol composed of a series of parallel lines,called a“bar code.”Using a device hooked to a computer,a merchant could scan the bar code printe

23、d on a price tag or package,and the information would immediately enter the retailers information system.This 2 Retail sales in 1998 totaled more than$2.7 trillion,out of$5.8 trillion in consumer expenditures.Sources:Census Bureau,http:/www.census.gov/svsd/retlann/view/artssal.txt and Bureau of Econ

24、omic Analysis,http:/www.bea.doc.gov/bea/dn/nipatbls/NIP2-2.HTM 3 Census Bureau 4 Retail profitability data from Market Guide,Inc.(published by OneSource Information Services,8/99)5 Uniform Code Council Website,http:/www.uc- QRS Corporation EC-2 p.3 improved retailers ability to track merchandise as

25、it entered inventory and was sold,enabling them to quickly analyze sales data at the store level for both fast-and slow-moving items.ELECTRONIC COMMERCE BEFORE THE INTERNET:EDI In addition to adopting the use of UPCs and bar codes,major retailers also implemented EDI,an automated approach to conduct

26、ing transactions between trading partners.Well before the Internet had become known to the general publicand years before creation of the World Wide Weborganizations had been conducting electronic commerce via EDI,facilitated by companies like QRS.Indeed,while business-to-business commerce over the

27、Internet totaled$43 billion in 1998,EDI-based transactions amounted to$250 billion.6 EDI enabled companies to exchange business documents(such as purchase orders and invoices)via computer over a network,using pre-defined formats and standards.A typical EDI transactiona purchase order(PO),for example

28、encompassed five steps:1.Document preparation:In some companies,the PO might be generated automatically by a purchasing system;in other companies,a person might key the information into the ordering system.2.Outbound translation:The system converted the PO file into standard EDI format.This step usu

29、ally was handled by third-party translation software.3.Transmission:Typically,an EDI document was sent over a private“value-added network”(VAN),which provided a reliable and secure communications medium over which confidential information could flow.The document arrived at the recipients electronic

30、mailbox.4.Inbound translation:The recipient retrieved the document;it was converted from the EDI format to the format required by the recipients internal information system.As in outbound translation,third-party software usually handled this function as well.5.Document processing:The recipient acted

31、 on the contents of the document;depending on the type of transaction,this step could trigger further EDI transactions(in this case,for example,receipt of the PO might cause the recipients system to issue a PO to its supplier).EDI technology originated in the late 1960s(the U.S.government was an ear

32、ly user),and it was refined during the next decade.By the late 70s,many government agencies and large corporations had started to adopt EDI.Over time,each business sectorfinance,health care,manufacturing,retail,etc.established a body of standard EDI“transaction sets,”reflecting the nuances of commer

33、ce that are characteristic of that industry.EDI provided several benefits.First,it reduced the cost of processing a document manually by up to a factor of 20.Second,it speeded up operations:transmission of an EDI document over a network is virtually instantaneous,and the receiving party can(if set u

34、p to do so)process the information immediately,cutting response cycles by days if not weeks.Third,EDI helped reduce transaction errors by eliminating the need for parties to re-key data.The transmission of EDI documents required not only a communications medium but also a system to enable computers

35、of many different kinds to exchange information.Value-added network(VAN)providers developed services to address this fundamental need.In addition to providing the basic connectivity for network transmission,the VAN operators offered electronic 6 Business Week,6/22/98 QRS Corporation EC-2 p.4 mailbox

36、 accounts,administration services,EDI translation and communication software,and other EDI-enabling services.Major VAN operators included telecommunications firms(e.g.AT&T,Sprint,MCI WorldCom);computer services firms(e.g.IBM,EDS);and firms specializing in EDI(e.g.GE Information Services,Sterling Com

37、merce,Kleinschmidt).VANs also guaranteed high levels of security and reliability.They generally charged customers a monthly subscription fee(which varied with level of service)plus transmission charges.EDI-based trading networks eventually developed in all industries.Within a particular industry,net

38、works took the form of interconnected“hub and spoke”configurations:large firms,generally the first to adopt EDI,became the hubs in these networks,while their many trading partners(who varied in size)were the spokes.For EDI VANs,a major objective was to extend the reach of the trading networks they s

39、erved:the more trading partners that used the providers service,the less need there was for any partner to use a competitors EDI service.The value of the network thus increased with each partner that joined it.Though EDI had been available for well over two decades,only a small percentage of busines

40、ses used it.In 1998,for example,J.P.Morgan estimated that only about 50,000 U.S.companies employed EDI(including virtually the entire Fortune 1000),and in 1997 IDC counted about 195,400 companies worldwide using EDI service.7 Analysts estimated that EDI had penetrated only 10-20%of the potential mar

41、ket.8 For a large company processing tens of thousands or more documents each year(invoices,purchase orders,shipping notices,etc.),the savings from EDI easily exceeded its costs.For smaller companies,however,the cost and complexity of EDI impeded its adoption.To become EDI-enabled,a company first ha

42、d to purchase proprietary software thatfor a small to mid-size companycould cost$10,000 or more(for larger companies,the cost can run into millions of dollars).If the software needed to be integrated with the companys back-office applications,this generally required costly custom programming.Ongoing

43、 upgrade and support costs added up to several thousand dollars a year.The company also had to subscribe to a VAN for transmission of EDI documents:monthly fees and connection charges ranged from a few hundred to several thousand dollars a month.Other possible costs included expenditures on hardware

44、 to run the EDI system as well as initial and periodic training of EDI operators.In addition,working with EDI-compliant partners often required investing in expensive equipment such as bar-code scanners and printers.9 According to one estimate,a small or midsize company would have to pay$45,000 per

45、year on EDI-related expenses.10 Rather than use third-party EDI services,some very large organizations were able to build their own EDI systems in-house(though typically at least some portion of the system was purchased or outsourced).In the retail industry,for example,Wal-Martthe nations largest re

46、tailer,with 1998 sales of$139.2 billionwas legendary for the internal development of its information systems.In the 1980s,it built its own satellite communications system,at a cost of some$20 million,to relay sales and inventory information between its stores and distribution centers.11 And in order

47、 to integrate its suppliers into its inventory management system,Wal-Mart had 7 Computerworld,“EDI vs.the New Kids,”(posted on CWs“emmerce”Website,4/6/98);BT Alex.Brown research report,“Sterling Commerce,Inc.,”6/2/99 8 BancBoston Robertson Stephens,“QRS Corporation,”Richard A.Jaurez,1/29/99 9 Infowo

48、rld,4/6/98 10 The Business Journal San Jose,CA,“Partnerships:The Big and Small of It,”9/2/98 11 Wal-Mart:A History of Sam Waltons Retail Phenomenon,Sandra S.Vance and Roy V.Scott,New York:Twayne Publishers,1994(p.95)QRS Corporation EC-2 p.5 invested some$4 billion in its Retail Link network:this sys

49、tem enabled suppliers to access specific sales data for their products at each Wal-Mart store on a daily basis,so they could estimate demand more accurately.Most retail companies,however,had neither the resources nor in-house expertise to build their own EDI systems.QRS HISTORY QRS Corporation was f

50、ounded in 1985 to provide software and related services to the retail industry.In 1987 it formed an affiliate company to develop and market a database of UPCs.12 This UPC catalog was designed to help retailers and suppliers better manage their purchasing and fulfillment operations:suppliers could up