Combining an offline and online business
An Amway case study

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Summary

Concepts:

Business, Independent Business Owners, Internet, Amway, consumer, launch, customers, technologies, e-commerce, sales, competitors, online, market, distribution, selling.

Summary:

Ordinary citizens may not suffer too much from failing to keep track of new technologies the moment that they appear, but it can be disastrous for a business not to notice what is taking place.

In more recent times, the Internet has once again forced businesses to rethink how they operate.

Some businesses carried out insufficient research regarding what the internet had to offer them. Others seriously underestimated the hazards of going online, to their own great cost.

If organisations do not accumulate 'know-how' and if they fail to monitor, trial and introduce new technologies as they develop products and processes for their consumers, they may find that their alert, progressive competitors have given themselves a competitive advantage.

This case study looks at how Amway has developed a strategy for taking full advantage of the opportunities that the Internet offers for e-commerce within the UK and the rest of Europe.

Amway is not just a consumer goods business, it is also one of the world's largest direct sales companies with over 3.3 million Independent Business Owners in more than 80 countries and territories in Asia, Africa, Europe and the Americas.

The main benefit of this form of selling is that it allows the Independent Business Owner to focus upon individual customers and their needs, with the Independent Business Owner sourcing the consumer rather than the consumer having to visit a shop.

Because it focuses upon direct selling, Amway is different from more traditional distribution channels.

The channel of distribution describes the stages of ownership that take place as a product moves from a manufacturer to a consumer.

With high levels of Internet use within the UK and Europe, market research showed that Independent Business Owners were Internet-ready, and that the time was right for Amway to develop e-commerce opportunities that would offer the 24-hour service its customers were wanting.

Rather than go for a full launch, marketers within Amway decided to opt for a soft launch.

Learning outcomes:

As a result of carefully reading this case study, students should be able to:

  • understand how knowledge can provide competitive advantage
  • appreciate many of the elements involved in setting up a commercial website
  • understand how to support a channel of distribution associated with direct sales
  • appreciate branding values and attributes
  • understand processes involved in launching technological products.

Amway | Combining an offline and online business