E-business

1) How does Freitag.ch differentiate itself in the transaction process? Explain the operational concepts as well as corresponding IC-Systems. Figure out specialties in the phases and try to derive, why Freitag.ch decided on this concept. Operating in the market since 1993, Freitag.ch became a successful business for producing handbags followed by other related products (who also resulted very efficacious findings). This business was built up based on the principle of making something useful from waste. (http://www.freitag.ch/support/faq)

This is a factor, which differentiates it from the production point of view. Among the phases of transaction processes Freitag.ch searches for truck tarps, bicycle inner tubes, seat belts and recycled airbags, its raw materials for the bags. For the procurement of these materials Freitag.ch gets in contact with everyone willing to sell such used products by its communication ways on the official website. (http://www.freitag.ch/tarps ) For this purpose a flyer is also prepared which orients better the potential suppliers.

(http://www.freitag.ch/medias/sys_master/8807415382046/TtSF_e_v2.0_FINAL.pdf )

The official website is build upon a Service Oriented Architecture and mashups to ensure the following products and services to both customers and suppliers: -Online store
-Updated e-catalogues of products
-E-search
-Attractive and informative video presentations
-Store locator
-The company history
-Well-structured FAQ
-Facts and figures
-Awards

All the above mentioned services and information offer a complete view of what Freitag.ch really is and how it works, appealing many clients and suppliers. Not only confirm their success but they also make a serious presentations in relation with suppliers giving all needed details and terms of collaboration conditions. (http://www.freitag.ch/agb )

2) Does freitag.ch follow a multichannel strategy, concerning their distribution channels? Please describe, what problems may result from different (one-or multichannel-channel-) distribution strategies, and how they are (or may be in future) handled by Freitag.ch .

Freitag.ch relies on multi distribution channels. It offers: online shopping of the products
stores in many cities around the world
different retailers contracted

Using a multichannel distribution strategy enlarges the segment of customers Freitag.ch reaches. On the other hand it has its risks. For example: letting other retailers to sell its products, Freitag.ch risks not to sends to its clients the appropriate message that its actual stores represent. It is obvious that a part of the fans of freitag.ch are seduced by the fact that it makes useful wasted resources, not only when producing but also for the stores they build. What Freitag brothers first wanted was to sell bags-made-from-tarps in a shop-made-from-containers actualizing their motto of not wasting even on their stores. This is a very important message for a considerable part of the clients, which risks missing on other retailers’ stores. To avoid it Freitag should be more selective and a bit imposing of its basic principles when contracting retailers.

3) Which general E-Business-strategy is carried out by Freitag.ch at the moment? Try to find out about their business model (with its partial models) and basic strategic concepts – as far as possible with their situation in mind. There are three ways a company can choose to compete in the market and seduce the customers: Differentiation strategy –It is a strategy whereby a marketer offers a product as unique in industry by proving that it provides a distinct advantage over other products by setting it apart from other competitors’ brands in some way or the other, besides price. Cost leader strategy – is based on a marketing strategy in which price is the main strategic tool and where the business generates economic value by having lower costs than competitors Segmentation strategy – is a marketing plan where all marketing efforts are directed at one particular market segment.

Among the competitive strategies I see Freitag.ch leaning mainly on differentiation strategy. From the first moment it came up as a new idea of producing bags from old tarps (which handle a story) and is still working to find enough sources so it can go on offering unique products to its clients.

Considering the different channels that Freitag.ch utilizes (*Virtual communities, *Online shop, *e-Purchasing, *e-Catalogue, *e-Search) I could say it has a high level of electronification and also has innovated the traditional way of making business.

More in detail, listing the basic questions a business model arises, I may say: Who is the customer?
Freitag.ch reaches many kinds of customers, the sportive and the practical one (its ‘Fundamental’ line), the modern one and the stylish one (its ‘Reference’ line), almost all kinds of ages. It is also updated with the new demands the technology brings nowadays, offering appropriate products for any specific appliance (iPhone, iPad, MacBook, Agenda, Notebook) What value do we offer to the customer?

Freitag.ch definitely offers quality and uniqueness.
How can we make money in this business?
Keep on sewing unique products delivering the same message to the clients. The communication and distribution channels to reach clients and offer them the value proposition The relationships established with clients

The resources needed
The partners and their motivations to collaborate
The revenue generated

4) What makes Freitag.ch special regarding their relation to customers? Take the approaches of hybrid E-Business-Strategies as a starting point, pick out innovative concepts and features as well as future possibilities.

From the customer aspect, despite the quality, the most important they offer is the uniqueness of the bags. Freitag.ch cures in details every bag, made of used truck tarps with its own story, look and state of use. The preparation process goes on by cutting by hand and sewing pieces of tarps. In this globalized and massive market we know how is worth such an individual and meaningful product.

Furthermore during the years they have developed a brand in which people now trust and are willing to purchase. Based on this I can position Freitag.ch approaching despite differentiation strategy toward segmentation strategy. This formula of strategies allows them to have demands and continuous sells even though their prices may not be the cheapest. If someone today tends to purchase a Freitag product it does not happen at random. It is a client that knows the company, the way it works, the value it adds to its products through the entire process before selling and is for these reasons why it is willing to pay. In Addition an important element we notice on its business approaches is that Freitag carries out a combination of Value-Oriented and Network-Oriented.

5) What strategic suggestions would you offer Freitag.ch for upcoming E-Business challenges? Develop your own ideas referring to the SWOT analysis!

A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm are usually classified as strength (S) or weaknesses (W), and those external to the firm are classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. The SWOT analysis provides information that is helpful in matching the firm’s resources and capabilities to the competitive environment in which it
operates.

Strengths
A firm’s strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Examples of strengths for Freitag.ch include: Strong brand names – It is a fact that ‘Freitag’ is already a brand name. I think it is one of the major reasons that sign the success of its products Good reputation among customers – In general if you have a glance at the forums and virtual communities clients are telling they are very satisfied with the products they purchased

Weaknesses
The absence of certain strengths may be viewed as a weakness. In the case of Freitag.ch the following may be considered as weaknesses: Reputation among customers – Referring again to what customers say on virtual communities once in a while we find comments complaining about the odor of High cost structure

Lack of access to resources –Its not so easy to find enough used tarpaulins and also colored (as Daniel Freitag cited)

‘While the company has been able to grow, the biggest challenge isn’t finances. It’s finding enough usable tarpaulin, especially with exotic colors and designs,- Daniel Freitag said at the “Out of the Bag” exhibition at Zurich’s design museum.

Opportunities
The external environment analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include: Arrival of new technologies –Freitag is keeping updated with the development of technology to fulfill any new needs (i-Products and others)