Company D

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4.1.4 Company D IT capability Mature IT application

Most of the IT-based application in Company D is the mature technology. That is, they tend to introduce the technology into the business operation as the technology reaches the mature stage, thereby reducing the cost on R&D. The late adoption of the technology application contributes to benefits such as a relatively lower cost on physical equipment, the reduced learning cost and the freedom of risks stemming from uncertainty regarding the first development of the product in the market. For example, in the case of introducing enterprise resource planning which is the prevailing adoption by three other competitors, they still keep their pace. As most of the companies have adopted the technology, they start to follow and introduce to small scale IT according to their relatively small scale of business scope.

Complementary Resource

Conservative, prudent business practices

As the CEO of Company D talks about the philosophy of this business management, we can still have stable sales growth in the competitive and financial crisis occurred in 2009. The reason is that with 500 stores and a good selection of the store area, we still can achieve the economics of scales. Every day large amounts of cash are recorded at the scale of about 9.0 billion a year of business, with the collection of bill payment should the annual cash flow may be as high as 200 billion. To achieve robust and stable growth, they tend to avoid the chances involved in asking for loans with banks. This policy has later been proven to be right when most companies encounter the numerous problems, such as that of bad cash turnover reduced sales which resulted from the global financial crisis near 2009.

E-learning

In 2004, they adopted the Computer based System(CBS) E-learning system before introducing the advanced E-learning system called E-school. In order to solve the challenges and problems resulting from that which is characteristic of the industry, such as high staff turnover, widely spread located stores, they have decided to improve the situation by adopting the E-learning, which aims at fostering the knowledge transfer and accumulation quickly. For example, they have issued relevant information about the currently undergoing sales activities. This helps staff to comprehensively understand products and be able to promote products to customers. Providing sales information has increased the preorder sales such as the campaign called “Coffee Season” by 14 times and the other sales boost by 4 times for the product “French rum wines”. The CEO’s view on the influence of the E-learning system on sales growth is expressed as follows:

“The sales growth comes from the synthesis of the business resource configuration, yet the E-learning system plays a critical role in spreading information about the newest sales in time and offers the

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platform to communicate and transfer the expertise from every level of staffs. This not only raises the employees’ recognition toward company but also increases the employees’ performance.”

IT-enabled Service Innovations Supply Chain Management System

At first, they only adopt the slight scale of enterprise system for resource management and information provision. But later, for the sake of store sales and inventory management, there will need to be an integrated shop management system which supports the complex operations and transactions between suppliers and retailers. Thereafter they develop their own Point of Sales (POS) and MobiPad shop operations management system. According to the CEO of OK:

“Our company is the only one single-product single-store management in this industry. Relying on the use of the self-developed POS and mobile shop management system and daily input of order information by staffs can achieve the capability of monitoring and management of each item in each store.”

In order to enhance the shop management, they have cooperated with technology providers to introduce the “action shop management system” and with ICT companies the development of

"MobiPad pen input into the computer" as the front-end handsets. The MobiPad shop operations management system, including the display shows, product drawings, ordering inventory functions and operations management, product details, promotional information and other functions can offer a full screen display of goods in accordance with the actual sorting, eliminates the need for staff during a visit to check cargo and cargo replenishment when the amount of time spent filling out the forms.

This system in addition to replenishment, inventory outside the POS system can add more detailed analysis of all cross-business information to grasp the customer's purchasing preference and behavior.

Multi Media Kiosk

At first Company D did not want to adopt MMK because of the technical problems, cost. In addition, they are only willing to make investment on technological asset until the specified technology reaches the maturity. Nevertheless, in the face of super-competition the CEO said in addition to screening out the weak for strong, must begin brewing the second growth curve and this part can be built by providing virtual goods and information-based services on the platform. Services provided by electronic media writes print, games, cards and many other service points. They also set up a fingerprint recognition, Bluetooth, and an infrared receiver with wireless devices such as that of the authentication mechanism, mainly used as a future development of government services required for identity verification during the audit function.

Intelligent Store (Q-Shop)

Company D is the only one who introduced the intelligent store by cooperation with government. The incentive lies on the limitation in store space where only allow 400 kinds of goods

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be placed. With respect to the front-line services, they sought for another kind of sales channel enabled by self service technology. The "Q-Shop" was developed with the aim to have two-track operation of the business model to extend services and reduce the retailers are operating costs (such as personnel costs, store rent costs, inventory costs, etc.), and increase the efficiency of its retail operations. Since the November 28 2008Q-shop opening, a total of 35,000 people spent a turnover of approximately NT 580 thousand, but the credit card payment adopted rate was only 5%. According to industrial analysis, they point out that this may probably because most consumers still opt for cash transactions. Due to the significant reduction in store rentals and personnel cost, they can achieve break point and have surplus.

However, the Q-Shop was not prevailing nor attracting much interest and attention by customers and suppliers. This may be attributed to the lack of intensive promotion and few goods and value-added service provision, which makes it improbable that the customer can get accustomed to the new consumption approach. Considering the above drawback and deficiency in operation, they plan to change the way the background has operated and store location selected, to enhance cash flow and logistics by rapid replenishment, and to introduce newer payment mechanisms such as the credit card payment sensor, back-office systems and networks, providing customers with a more complete experience. Although this case appears to be failed but the invention and innovation stemming from this new service development can be utilized by the later development of new kind of services.

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