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The company benjy's is a brick-and-mortar retailer of electronics and appliances, aiming at providing customers with the biggest range of products at the lowest prices. Last quarter Benjy's suffered a sharp decline in sales--almost $700 million, resulting from the prevailing showrooming phenomenon. More and more people came to Benjy's to look at products but then buying them from its online competitors whose lack of a brick-and-mortar presence enabled them to offer discount prices. Although Benjys took low price and high volumes its objective, it couldnt afford to match online prices due to its operating procedures Disagreement occurred between the Ceo and the chairman about the possible solutions towards this issue. The chairman favoured a two-pronged approach that Benjy's could increase the difficulty of showrooming, at the same time, try to match online prices. The CEO wanted to pursue a different strategy. He thought Benjy should set itself apart from the competition by emphasizing a curated product mix, knowledgeable employees and follow-up services. The chairman's plan seemed a short-term but low-cost and potentially effective solution. The CEO's was more costly and risky but possibly much better in the long run. The company needs to decide on a counter strategy to solve the dilemma and win back online shoppers Showrooming is expanding into markets we might have thought exempt. Today we can investigate everything from cars to books to groceries in person and then proceed to order them online, often with greater ease and significant savings Although Benjys could offer consumers better shopping experience, guaranteed quality and after-sale service, the online retailers win over more and more customers with lower price, home delivery service as well as wider product range. Simple price competition is a guaranteed losing strategy for Benjys, especially with Amazon, whose long cash floats and high inventory turnover allow them to stay profitable even with no margin. On the other hand, even though most online retailers are good at showing customers what theyve got and filling orders, they 're not as good at selling or responding to vague queries. Thats where the opportunity for Benjys lies2 The company Benjy’s is a brick-and-mortar retailer of electronics and appliances, aiming at providing customers with the biggest range of products at the lowest prices. Last quarter Benjy’s suffered a sharp decline in sales—almost $700 million, resulting from the prevailing showrooming phenomenon. More and more people came to Benjy’s to look at products but then buying them from its online competitors whose lack of a brick-and-mortar presence enabled them to offer discount prices. Although Benjy’s took “low price and high volume” as its objective, it couldn’t afford to match online prices due to its operating procedures. Disagreement occurred between the CEO and the chairman about the possible solutions towards this issue. The chairman favoured a two-pronged approach that Benjy’s could increase the difficulty of showrooming, at the same time, try to match online prices. The CEO wanted to pursue a different strategy. He thought Benjy’s should set itself apart from the competition by emphasizing a curated product mix, knowledgeable employees and follow-up services. The chairman’s plan seemed a short-term but low-cost and potentially effective solution. The CEO’s was more costly and risky but possibly much better in the long run. The company needs to decide on a counter strategy to solve the dilemma and win back online shoppers. Showrooming is expanding into markets we might have thought exempt. Today we can investigate everything from cars to books to groceries in person and then proceed to order them online, often with greater ease and significant savings. Although Benjy’s could offer consumers better shopping experience, guaranteed quality and after-sale service, the online retailers win over more and more customers with lower price, home delivery service as well as wider product range. Simple price competition is a guaranteed losing strategy for Benjy’s, especially with Amazon, whose long cash floats and high inventory turnover allow them to stay profitable even with no margin. On the other hand, even though most online retailers are good at showing customers what they’ve got and filling orders, they’re not as good at selling or responding to vague queries. That’s where the opportunity for Benjy’s lies
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