Comparison of Online and Offline Retail Environment of Car Industry

2479 words 10 pages
The offline retail environment of the automobile industry is that of manufacture to intermediary to consumer. The process from which the product (car) proceeds from manufacturer to consumer is that of through the automobile dealer. This intermediary batch purchases a number of models from the manufacturer and sells them from the ‘lot’ or storefront. This placement and presentation of the product has proved largely successful. The tangible product is viewed, test driven and purchased from the intermediary. An advantage of the offline retail environment is that of the face to face (F2F) transaction environment. The purchase of a car requires high involvement between the supplier and consumer and can be argued demands a customer …show more content…
The value has been enhanced as the car producer has been able to target their audience via their websites and website advertising. Reducing advertising costs and waste on the mass media audience. The internet has been a valuable resource for the car industry as “Resources are valuable when they enable a firm to conceive of or implement strategies that improve its efficiency and effectiveness” (Barney 1991, cited in Bowman & Ambrosini, 2007)
It appears that imitability is not a major factor in the car industry in preserving competitive advantage. This can be seen in the infomediaries such as MSN CarPoint. It was a pioneer in providing an internet platform for consumers to compare and acquire information in purchasing a car. Since then, many similar businesses have emerged however in 2004 CarPoint claims that it was the most visited online automotive site on the Web, with 6 million customer visits each month. It also claimed to generate more than $8 billion in auto sales for the dealers in its network each year. (www.ecommercetimes.com – 02 Feb 01)
Original Equipment Manufacturers (OEM) (Gerst & Jacobs, 2005) such as Toyota have created supplier networks to improve the supply chain to replace one-to-one relationships. These ‘e’ based networks are in response to the consumer demanding more for the same money. This has been imitated across

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