Me-Online
Strengths of the traditional business model
1. IT application base:
– Has an established Company Area Network
– Inventory information shared across the company
– Existing employees were familiar with IT applications
2. Chain store model:
– Centralized procurement and selling through a multi-channel system
– Associated methods of settlement, review and allocation and users’ files
3. Distribution advantage:
– Shanghai Me Mechanical and Electrical Equipment Chain’s logistics center had experience troubleshooting in the industry for many years
– Thorough knowledge of the mechanical and electrical industry sector
4. Established customer base:
– Partners with some of the biggest domestic stock-bearing companies such as Wafandian Bearing Stock Co. Ltd
– General Electric, Baosteel, Shanghai Krupp Stainless are some of its biggest customers
Environmental Factors Necessary for Traditional Model’s Success
1. A closed economy
– seller-driven
– run by state-owned enterprises
– little attention to marketing and selling of products
– buyer power was low and
– almost no competition from efficient MNCs
2. Minimal fluctuation in prices of products procured would result in high profits
3. Slow technological changes in product lines
– Inventory should not become obsolete
4. Competitors also do not adapt the latest technology to streamline business processes
All the above factors were not sustainable and not in favour of SHMEC!
Value added to customers by traditional SHMEC
1. Credit based procurement of products by customers
– Products were sold on credit basis thus increase in sales were observed
2. Large inventory backup thus ensuring no delay in deliveries
– Followed the policy of buy first and sell
1. IT application base:
– Has an established Company Area Network
– Inventory information shared across the company
– Existing employees were familiar with IT applications
2. Chain store model:
– Centralized procurement and selling through a multi-channel system
– Associated methods of settlement, review and allocation and users’ files
3. Distribution advantage:
– Shanghai Me Mechanical and Electrical Equipment Chain’s logistics center had experience troubleshooting in the industry for many years
– Thorough knowledge of the mechanical and electrical industry sector
4. Established customer base:
– Partners with some of the biggest domestic stock-bearing companies such as Wafandian Bearing Stock Co. Ltd
– General Electric, Baosteel, Shanghai Krupp Stainless are some of its biggest customers
Environmental Factors Necessary for Traditional Model’s Success
1. A closed economy
– seller-driven
– run by state-owned enterprises
– little attention to marketing and selling of products
– buyer power was low and
– almost no competition from efficient MNCs
2. Minimal fluctuation in prices of products procured would result in high profits
3. Slow technological changes in product lines
– Inventory should not become obsolete
4. Competitors also do not adapt the latest technology to streamline business processes
All the above factors were not sustainable and not in favour of SHMEC!
Value added to customers by traditional SHMEC
1. Credit based procurement of products by customers
– Products were sold on credit basis thus increase in sales were observed
2. Large inventory backup thus ensuring no delay in deliveries
– Followed the policy of buy first and sell