Applicability of Concepts in Digital Supply Chain

This document explores the concepts of disintermediation, re-intermediation, and countermediation in the supply chain of a digital business. It also discusses the use of social media and analytics tools to monitor product interest and sales in smoothing out the bull-whip effect. Additionally, it examines the applicability of growth hacking framework in an e-commerce logistics company.

Questions
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Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Question 1 Applicability of the concepts of disintermediation, re-intermediation and counter-
mediation on supply chain of a digital business.....................................................................3
Question 2 Use of social media and analytics tools to monitor product interest/ sales in
smoothing out the bull-whip effect for a digital business......................................................4
Question 3 Applicability of growth hacking framework to an e-commerce logistics company
that provides door-to-door delivery services in a C2C market...............................................6
Conclusion.......................................................................................................................................8
References......................................................................................................................................10
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Introduction
Digital businesses refer to that form of business which uses technology to create new
value in business model to connect, collaborate and bridge business operations and internal
capabilities of the business with customers and their experiences (Chaffey, Edmundson-Bird and
Hemphill, 2019). This assessment includes three questions that are aimed at exploring various
concepts related to digital businesses. First question assesses the concepts related to supply chain
of the digital business. Second question determines the use of social media and analytics tools to
smooth out bull whip effect for a digital business and final question explores the applicability of
growth hacking framework on an e-commerce logistics company.
Main Body
Question 1 Applicability of the concepts of disintermediation, re-intermediation and counter-
mediation on supply chain of a digital business.
Digital businesses use digital technology to create value-based development of customer
experiences. Its supply chain is also known as digital supply chain. It includes both digital
aspects of physical supply chain or the supply chain of technology companies which are involved
in the delivery of digital products (Büyüközkan and Göçer, 2018). Below mentioned are few
concepts related to delivery in supply chain management of digital businesses:
Disintermediation – It refers to the process of removing middlemen from a supply chain.
It is capable of enabling company to reduce cost and increase efficiency in both operations and
relations with customers even though, it also increases the need for due diligence for the
companies which deals in the physical supply chain. On the flip side, intermediation has arisen
as an industry in digital sphere and to avoid disruptions in business brought by these
intermediaries, many large companies launch their own supply chain and connect with their
customers through their own websites and stores like Apple and Dell (Vakulenko and et. al.,
2019). In other words, disintermediation has led to transform manufacturers into distributors as
well which either opens a new array of revenue streams for the company or take away from them
focus over their core operations only. Further, new technologies like block-chain are also being
worked out in the digital sphere to overcome the disruptions brought about by disintermediation.
Re-intermediation – It refers to the process of re-introduction of intermediaries into the
supply chain of the company. It also occurs when either pre-existing intermediaries or new
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intermediaries offers some innovation in existing value propositions or some new functions
which are able to add value to the products and services of the company. Re-intermediation has
arisen as an industry in the digital sphere where either digital business plays a role of
intermediary in the supply chain of traditional businesses or they associate with other digital
businesses to support their supply chain. They generally play the role of either aggregators like
Amazon which aggregates the demand of customers online, acting as a substitute to traditional
intermediaries over the internet or facilitators like Expedia or Uber which facilitates the business
of others by promoting them among the internet users (Kache and Seuring, 2017). Further, they
also act as trust agents like online financial transactions facilitating agents like PayPal which
hedges the lack of trust in online payment by providing secure financial transactions over
internet. They have grown into such big businesses with the increase in use of digital technology
that it gets difficult for businesses to not go through them to connect with their customers.
Counter-mediation – It refers to the process of creation of new intermediaries by an
established company. In other words, an already established company is not just creating a re-
intermediary but is also creating a new channel that is capable of acting as intermediary on its
own and is positioned separately from its creators. Digitally, counter-mediation is promoted to
either control key elements of a supply chain or to prevent a competitor from gaining
competitive advantage or monopolistic positioning. For example, Apple brought out its own App
Store in place of using Google Play Store to prevent Google from gaining monopoly in the
supply chain (Chaffey, Edmundson-Bird and Hemphill, 2019). Further, another example of
counter-mediation is Opodo.com which had been set up by European Airlines in collaboration
with each other so as to provide a chance and encourage customers to book flights directly with
them in place of using other intermediaries.
Question 2 Use of social media and analytics tools to monitor product interest/ sales in
smoothing out the bull-whip effect for a digital business.
Bull-whip effect refers to those factors that are capable of disrupting supply chain
management of the company (Gao and et. al., 2017). In other words, bull-whip effect deals with
the factors that lead to inventory fluctuations or inefficient asset allocation which arises as a
result of changes in the demand as one move further in the supply chain. This can be due to
factors like time and supply of order decisions, lack of communication, disorganisation, etc. It
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impacts both physical and digital businesses and both has separate factors that act as bull-whip
agents in their supply chain.
Netflix is a digital business which offers films, sitcoms, documentaries and TV shows over
internet to millions of its users globally. It also offers DVD-by-mail service as its physical
operations. Bull-whip effect occurs in both upstream and downstream information sharing in the
company (Hofmann, 2017). More the inefficient information sharing is, worse becomes the
influence of bull-whip effect. It has the capacity of leading to inadequate customer service and
higher inventory cost. Efficient inventory management is at the core of the company's
operational policies to offer streamlined services to its users. It applies different types of tools to
measure inventory performance and management to address varying needs such as ABC analysis
and Just-in-time approach to manage bull-whip effect on its physical supply chain. Further, for
its online inventory, it uses serialised inventory technique. Under it, all products or movies for
example, are provided unique serial numbers. Netflix uses this unique code to identify and
monitor activity over that inventory efficiently and effectively. Company uses real time content,
big data analytic, machine learning and moreover, it makes use of social media to learn all the
engagement points of consumers so that they can smooth bull-whip factors as well as mitigate
risk, maximize efficiency and remove blind spots that reflects correct picture of their supply
chain.
Company aces the social media marketing and uses the big data collected from social
media platforms to not only monitor interest of consumers in the products of company but also to
smooth bull-whip effect of supply chain on the sales of the company (Tai, Duc and
Buddhakulsomsiri, 2019). Netflix actively engages with its customers on social media platforms
like Facebook, Instagram, Twitter, YouTube and others. It has millions of followers over these
social media platforms. It posts there frequently and is able to spike the conversations with its
simple posts. It gives sneak peek of its upcoming contents on multimedia promotional platforms
and this engages consumers in the reply or revert battle. It helps create a win-win situation for
both the company and the consumers as company gets to make authentic and direct contact with
its consumers to know mood of the market and consumers get to have an additional dose of
entertainment. These conversations create a big data, analysis of which provides company an
estimation over the expectations of the consumers from its presented content, past contents and
also gets ideas for the future content. It also acts as customer touch point for the potential
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consumer of the Netflix and helps it gain a competitive advantage over its rivals like Amazon
Prime Video (Dai and et. al., 2016). Support in content strategy by analysis of social media data.
Therefore, most of the social media content of the Netflix is in video category as in the videos
centred around upcoming films and TV Shows. In addition, it offers pictures, GIFs, text posts,
etc. with dash of humour and wit to arise interest of social media users. It further runs various
campaigns over social media like if there is an upcoming series over some social issues, it
announces a campaign to indulge in engagement over that issue so as to increase customer
engagement and direct customers towards their content. This not only acts as CSR for the
company but also promotes the company. Customers are directed towards platform of Netflix
where they watch the content, explores the content, etc., based on which it is provided further
recommendation (Özelkan, Lim and Adnan, 2018). Data is collected from social media platforms
and is then combined with data from other customer touch points that exist on either its website
for desktop users or its application for mobile users. This combined data takes the form of Big
data which is then mined and processed to improve the delivery experience of the consumers,
thereby reducing bull-whip effect on the supply chain of the digital business of the Netflix.
Question 3 Applicability of growth hacking framework to an e-commerce logistics company that
provides door-to-door delivery services in a C2C market.
Growth hacking framework or growth marketing is a sequential framework which
includes adopting outcome oriented step-by-step method. It includes the understanding and
developing a customised market-fit for the product which includes rapid experimentation,
analytics, optimisation and other practices that are based on full-funnel strategy. It is different
from traditional marketing as it does not work in isolation but rather involves different
collaboration across industries that are beneficial to boost sales growth of the company (Herttua
and et. al., 2016). Therefore, a growth hacking team of a company typically involves various
departments of a company collaborating together to form a team like product team, marketing
team, development team, creative team, etc. It assumes different forms as per the suitability of
the company for which growth framework has to be designed and applied. For example, in an e-
commerce logistics company like Etsy which provides door-to-door delivery services in a
Consumer-to-consumer market, all the activities and experiences must be aimed at adopting low-
cost creative and innovative strategies to build and maintain company's customer base and boost
sales revenue. First step needed to be adopted by company are to build a growth team which
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must include team leader, full-stack developer, growth marketer, content marketer and team
members who can analyse growth operations and data analytics. Further, growth team needs to
pursue two things – identify levers around acquisition, retention and monetisation and determine
the factors that drive consumer decision making process and other behavioural psychology.
Once, the team is established by the company, it needs to decide on the framework it should
adopt like:
 Rapid experimentation – It is a growth framework which relies on data to process tests of
primary evidence and validating the assumptions made. This enables the company to
perform multiple different tests and tactics within a small budget that is capable enough
of making informed long-term decisions.
 Full-funnel growth marketing – It is another framework that breaks down consumer
journey into steps and processes that enable efficient tracking and data collection at each
step. It can help identify the points where consumers are stuck in part of process funnel
so that optimisation can be carried out to keep things smooth at the end point which is
purchase of products by the consumers (Yang, Shi and Yan, 2016).
Etsy requires to improve consumer behaviour and therefore, must adopt full-funnel
growth marketing framework. Further, it needs to make experimentation and tests in the series of
steps which are mentioned below:
 Identifying “North-Star” of the company – It is identifying that performance metric that
is underlying the health of the business. It also represents that core value which products
of the company delivers to customers. Etsy is an e-commerce company and therefore,
takes daily users visiting its website as its north-star. Further, it uses this data to analyse it
further to optimise efforts that are capable of driving sustainable growth in the customer
base of the company.
 Brainstorming and ideation – In this process, brainstorming is made for all the possible
lever, channels and tactics that are capable of optimising value of the north-star metric for
the company. Etsy growth team needs to brainstorm to generate all the ideas that are
aimed at transforming visitor data into sales. Since, it involves brainstorming and
ideation, it should involve open participation and feedback of whole team. Also,
competitors' analysis must also be observed to find out their best and successful practises
that are worth adopting.
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 Filter and prioritise – Once all the ideas have been identified by the growth team, next
step is to filter and prioritise them in order to their probability of success and potential
impact (Yadav and Rahman, 2018). For example, growth team of Etsy has determined
that in order to increase its visibility among potential users, it should either connect social
media of all sellers with its website or offer a mail subscription, include most searched
keywords in SEO, ads and promoted listings, etc. and in order to increase the conversion
rate of user visit in to sales, it should either offer coupons to subscribers, provide free
shipping, ensure faster delivery and smooth return policy, etc. It then needs to identify
resources like time and money required to execute these ideas and on the basis of
necessary filters, sort the ideas later to be developed.
 Hypothesize and test – Hypothesizing refers to assessment of the success rate of the idea
and its potential impact. It would help determine whether the tactic will be effective or
not. For example, Etsy decided to adopt two ideas – connect social media platforms of
sellers with company and provide free shipping. Then, rather than deploying the idea to
all seller, it should take a pilot test of the idea implementation and measure weekly results
to create case studies and success stories for company to follow later (Yu and et. al.,
2017). If the pilot test is successful, it can be implemented further across platform as well
and if it is unsuccessful, it should be taken off and never repeated before making
necessary modifications.
 Document – It is the final step in which growth team must analyse all the results related
to the experiments made on the North-star metric. It should document all the process and
successes and failures seen during the process (Turban and et. al., 2017). Also, all the
ideas identified must be documented as well so that they can be developed later whenever
required. They should be in easy language which would be easy to search and understand
in later times. This document must be developed as reference document.
Conclusion
In the above assessment, it has been elucidated that digital businesses rely by taking full
advantage of information technology in its core operations to achieve a leverage in strategic
opportunities. Further, it was elaborated that bull-whip effect refers to a distribution channel
phenomenon which discusses the impact of inefficiencies of supply chain on demand forecasts
and can result in poor customer service, distorted inventory management, lost revenues, etc. for
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digital business. In addition, it was determined that growth hacking framework aims to
continually optimise the growth of key business metrics and supports in increasing metrics such
as weekly active users, revenue, etc. for the e-commerce businesses.
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References
Books and Journal
Büyüközkan, G. and Göçer, F., 2018. Digital supply chain: literature review and a proposed
framework for future research. Computers in Industry. 97. pp.157-177.
Chaffey, D., Edmundson-Bird, D. and Hemphill, T., 2019. Digital business and e-commerce
management. Pearson UK.
Chaffey, D., Edmundson-Bird, D. and Hemphill, T., 2019. Digital business and e-commerce
management. Pearson UK.
Dai, H. and et. al., 2016. Bullwhip effect and supply chain costs with low-and high-quality
information on inventory shrinkage. European Journal of Operational Research. 250(2).
pp.457-469.
Gao, D. and et. al., 2017. The bullwhip effect in an online retail supply chain: a perspective of
price-sensitive demand based on the price discount in e-commerce. IEEE Transactions
on Engineering Management. 64(2). pp.134-148.
Herttua, T. and et. al., 2016. Growth hacking: exploring the meaning of an internet-born digital
marketing buzzword. In Designing networks for innovation and improvisation (pp. 151-
161). Springer, Cham.
Hofmann, E., 2017. Big data and supply chain decisions: the impact of volume, variety and
velocity properties on the bullwhip effect. International Journal of Production
Research. 55(17). pp.5108-5126.
Kache, F. and Seuring, S., 2017. Challenges and opportunities of digital information at the
intersection of Big Data Analytics and supply chain management. International Journal
of Operations & Production Management.
Özelkan, E.C., Lim, C. and Adnan, Z.H., 2018. Conditions of reverse bullwhip effect in pricing
under joint decision of replenishment and pricing. International Journal of Production
Economics. 200. pp.207-223.
Tai, P.D., Duc, T.T.H. and Buddhakulsomsiri, J., 2019. Measure of bullwhip effect in supply
chain with price-sensitive and correlated demand. Computers & Industrial
Engineering. 127. pp.408-419.
Turban, E. and et. al., 2017. Electronic commerce 2018: a managerial and social networks
perspective. Springer.
Vakulenko, Y. and et. al., 2019. Service innovation in e-commerce last mile delivery: Mapping
the e-customer journey. Journal of Business Research. 101. pp.461-468.
Yadav, M. and Rahman, Z., 2018. The influence of social media marketing activities on
customer loyalty: A study of e-commerce industry. Benchmarking: An International
Journal.
Yang, Z., Shi, Y. and Yan, H., 2016. Scale, congestion, efficiency and effectiveness in e-
commerce firms. Electronic Commerce Research and Applications. 20. pp.171-182.
Yu, Y. and et. al., 2017. E-commerce logistics in supply chain management. Industrial
Management & Data Systems.
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