JEWELLWORLD.COM: A JEWELLERY INDUSTRY B2B PORTAL It was a hot and sunny day in A
ID: 380984 • Letter: J
Question
JEWELLWORLD.COM: A JEWELLERY INDUSTRY B2B PORTAL It was a hot and sunny day in August 2004. Derek Ling, project manager for Jewellworld.com, was sitting in his air-conditioned office, which was located inside the headquarters of Luk Fook Holdings (Intemational) Limited, or Jewellworld.com's parent company. It had been over four years since Jewellworld.com had been established as a jewellery industry portal., and over a year since it had broken even. Its B2B membership had grown from less than 40 to around 250, and its service offerings had also undergone considerable changes. By mid-2004, Jewellworld.com was perhaps one of the few surviving jewellery industry portals in Hong Kong and China that provided both B2B and B2C services. Moving forward, Ling wonderecd how Jewellworld.com should continue to develop and grow.Explanation / Answer
The value chain evaluation of LUK FOOK is mentioned below:
Primary activities
The first and foremost activity of LUK FOOK was sourcing and retailing of the jewelry. They source the jewelry supply for the company was Hong Kong.
The main operations of the company were to produce furnished jewelry.
The company provides technical support services which help the customers to clarify their quarries.
The company provides attractive and fashionable design jewelry to its customers.
Secondary activities.
The backend work of the company was to produce innovative design jewelry.
The company provides training in gems furnishing, and product designing.
The company’s raw material procurement source was the retailers from Hong Kong.
The company opened its 22 outlets by the same name i.e. LUK Fook and 7 outlets by the name Ice g. By opening different name outlets, the company provides medium and high range jewelry to its customers.
The competitive forces model of LUK FOOK is mentioned below:
Threat of new entrants: For the company LUK FOOK, there is a threat from the new emerging retailers. The emerging trend of online jewelry can also act as a threat to the company. Also, the entry of already established players through the online portal is also a threat to the business.
Bargaining power of buyers: As the company is already buying the raw material from the local retailers of Hong Kong. Thus, the customers buying form the company possess high bargaining power as the customer in the market can also approach these retailers to get the product. Or it can be simply said that the product which the company is selling is already available in the market with those retailers.
Threat of substitutes: Jewelry segment is one of the segment where designs and pattern changes frequently. For the company, modern designs or a different variety offerings from the competitors is always a threat.
Buying power of suppliers: As the company is procuring the raw material from the retailers of Hong Kong, the suppliers would be present in large numbers. Thus, there is less supplier bargaining power.
Rivalry among the existing players: As there are substantial number of jewelry sellers in the city, there would be a huge price competition among the rivals. Also, the above-mentioned factors affect the market trends. Thus, there exists a substantial amount of rivalry among the sellers.
The Jewellworld.com’s business model is mentioned below:
The website was started as a point of sale i.e. it was a display and sale destination of the jewelry. The website was set up only for a single shop but later it became the hub for other retailers also.
The website’s main operations were Business to business (B2B) and business to consumer (B2C). Under the B2B segment, the sellers present their designs and the buyers search for the desired product after which they can place the order to the seller. Under B2B segment, the customers can go through the variety of designs presented by the sellers and can buy the desired product.
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