Estore at Shell Canada Limited

Résumé du document

Shell Canada Limited took an innovative initiative in 2003: to launch an eStore for our business customers. But even though many customers have signed up, the utilization rate remains low. In that sense, the initiative doesn't match our business objectives which consists of cutting costs of sales representatives by providing a self-service
technology to agricultural customers to place their orders directly. In return, we could obtain account information through eStore. The two main causes of "discontinuance" seem to be a problem of website conception and an ineffective interpersonal communication. This failure raises the risk of taking an innovative initiative for a company such as Shell Canada Ltd, in terms of missed sales and even lost customers.

After the analysis of our company, its environment and its customers, building a skilled team for improving the eStore and a business unit responsible for the customer relationship management appears to be the best strategy.

Extraits

[...] APPENDICES Appendix 1 - 2003 financial results of Shell Canada and main competitors (in billions) Earnings Revenues Petroleum products earnings (in millions) Shell Canada $ 0.81 $ 8.8 $ 345 Suncor $ 1.1 $ 6.3 / Husky Energy $ 1.3 $ 7.7 $ 28 Petro-Canada $ 1.4 $ 12.2 / Imperial Oil $ 1.7 / $ 462 (From financial results available on the companies' websites, see 'References') Appendix 2 - The Shell Control Framework (Shell website, 'Shell Control Framework') Appendix 3 Segmentation grid Businessto-business segment Transactors 95% Sub-groups of customers - Agricultural - Road transport - Aviation - Rail - Marine Products value (fuel & lubricants) Low Commodity products Service value (consulting services) Low Pricesensitivity Customers' concerns Short-term Cost per litre Cost per transaction Shell's margin per sale Low High Progressives Medium size operations: - manufacturing - regional transportation - drilling Larger operations: - Mining - Pulp - Paper Medium Operational products High Real added value: increase operational efficiency Low Medium or long-term Cost per unit of output in their operations High Appendix 4 Perceptual map REFERENCES Situational analysis resources Estore at Shell Canada Limited. Richard Ivey School of Business Case #9B06E020. Rogers, Everett M. (2003) Diffusion of Innovations, 5th edition. New York: Free Press. Chapter 1 & 6. Mohammed, Rafi A. et al. (2004) Internet Marketing: building advantage in the networked economy, 2nd edition. [...]

[...] Who is responsible in the decision-making concerning the website? Decision grid: Decision Factors Financial implications Few One skilled person for web improvement Business unit creation Higher Requires a specific budget that may impact margin in the short term Time to full implementation Quick Within 5 weeks (evaluation & planning: 2 weeks; improvement: 3 weeks) Medium 5 to 6 months Aligns with Shell's strategic objectives Alternative 1 Yes Alternative 2 Yes IV. RECOMMENDATION Regarding the previous evaluation, it appears that the first alternative should be more efficient. [...]

[...] In that sense, the initiative doesn't match our business objectives which consists of cutting costs of sales representatives by providing a self-service technology to agricultural customers to place their orders directly. In return, we could obtain account information through eStore. The two main causes of "discontinuance" seem to be a problem of website conception and an ineffective interpersonal communication. This failure raises the risk of taking an innovative initiative for a company such as Shell Canada Ltd, in terms of missed sales and even lost customers. [...]

[...] (Shell Canada website: Working with Shell and Albian Sands). - DISTRIBUTION CHANNELS: closeness Shell Canada operates about 2,000 stores across the country, such as gas stations. Concerning business customers, channel members are mainly Shell's sales representatives and eStore. Shell Canada values closeness with customers because a part of them requires consulting services and it trusts its sales representative in this. - CUSTOMERS: two opposite segments Traditional customers have split into two different groups. The 'transactors' account for 95% of the customer base and have a short-term view. [...]

[...] The relative advantage of eStore is medium: it is effectively an economic advantage for us, and the target is compatible since many agricultural customers have become Internet users. But they face a problem because some of them try it without adopting it. Apparently, the complexity is greater than our teams thought: automatically generated passwords and the website address are not easy to remember (secured connection: https); the log-in screen is confusing; the application menu which has been designed for employees is complex and inappropriate; and so on. Last but not least, the degree of observability seems to be irrelevant for this segment. [...]