Description
It talks briefly about the successful implementation of the business model of Me-Online to overcome the inherent problems associated with inventory, bad debts and so on. It finally wounds up with the challenges which lay ahead for the company.
E-BUSINESS TRANSFORMATION AT ME-ONLINE
In October 1998, Shanghai Material and Equipment (Group) Co. Ltd. together with 15 corporations, initiated reforms of its ownership structure. The resulting company was renamed as Shanghai Me Mechanical and Electrical Equipment Chain Co. Ltd. (SHMEC). With this reform, the company also initiated transformation of its traditional business model. SHMEC’s traditional business model had various disadvantages like – huge inventory accumulation, large number of bad debts, poor information dissemination and slow response to the market among various other problems. SHMEC resolved to leverage its existing strength to establish a B2B e-business platform and use a modern logistics system. Having successfully implemented the first phase of the business model of Me-online, the company looked forward to its second phase of development. Business Transformation with Me-online In April 2001, SHMEC successfully set up Me-online as a platform for real-time mechanical and electrical equipment trading. The system had the characteristics of high efficiency, specialty, easy usage extension and originality. This implementation of Me-online brought about various management changes, like streamlining the business processes, consolidation of customer relationship management system, order-driven procurement and diversified revenue streams. Challenges ahead During the first phase of Me-online, the company had focused on transformation of its internal processes. One of the major problems it had faced was opposition from employees of the former Shanghai Mechanical & Electrical Equipment Co. Ltd. It did well to manage the turnover of its core staff by focusing on the personal factors & changing employees’ mindset. However, in the second face, the company’s focus is towards external factors like suppliers and retail customers. Me-online will posses only limited control while integrating with its customers & suppliers’ working process. This would open up a new set of challenges for the company. Further, SHMEC’s thought of spinning off Me-online as an independent company needs thorough analysis for its self-sustainability. Up till now, Me-online had leveraged on the
experience and large customer base of its parent company and still managed online revenue of only 10% - 20% of the company’s total revenue. SHMEC should consider these factors while going ahead with its second phase.
doc_311228815.docx
It talks briefly about the successful implementation of the business model of Me-Online to overcome the inherent problems associated with inventory, bad debts and so on. It finally wounds up with the challenges which lay ahead for the company.
E-BUSINESS TRANSFORMATION AT ME-ONLINE
In October 1998, Shanghai Material and Equipment (Group) Co. Ltd. together with 15 corporations, initiated reforms of its ownership structure. The resulting company was renamed as Shanghai Me Mechanical and Electrical Equipment Chain Co. Ltd. (SHMEC). With this reform, the company also initiated transformation of its traditional business model. SHMEC’s traditional business model had various disadvantages like – huge inventory accumulation, large number of bad debts, poor information dissemination and slow response to the market among various other problems. SHMEC resolved to leverage its existing strength to establish a B2B e-business platform and use a modern logistics system. Having successfully implemented the first phase of the business model of Me-online, the company looked forward to its second phase of development. Business Transformation with Me-online In April 2001, SHMEC successfully set up Me-online as a platform for real-time mechanical and electrical equipment trading. The system had the characteristics of high efficiency, specialty, easy usage extension and originality. This implementation of Me-online brought about various management changes, like streamlining the business processes, consolidation of customer relationship management system, order-driven procurement and diversified revenue streams. Challenges ahead During the first phase of Me-online, the company had focused on transformation of its internal processes. One of the major problems it had faced was opposition from employees of the former Shanghai Mechanical & Electrical Equipment Co. Ltd. It did well to manage the turnover of its core staff by focusing on the personal factors & changing employees’ mindset. However, in the second face, the company’s focus is towards external factors like suppliers and retail customers. Me-online will posses only limited control while integrating with its customers & suppliers’ working process. This would open up a new set of challenges for the company. Further, SHMEC’s thought of spinning off Me-online as an independent company needs thorough analysis for its self-sustainability. Up till now, Me-online had leveraged on the
experience and large customer base of its parent company and still managed online revenue of only 10% - 20% of the company’s total revenue. SHMEC should consider these factors while going ahead with its second phase.
doc_311228815.docx