THE MANAGER'S MEMO
FROM: Joe E, Gittleman, CEO, Good Foods
TO: Brandy L, Bechina, Senior Vice President, Business Development
RE: E-Commerce Division
With all the technological changes occurring in the retail food business, it has become more and more apparent that Good Foods needs to start an e-commerce division. We're already trailing other companies in this regard. I suspect that our recent loss in market share is a direct result of our not offering this service. Good Foods currently has three operating divisions: dry grocery, refrigerated foods, and frozen foods. Not one of these divisions has a fulltime person who's working on e-commerce.
Yet our customers and suppliers are demanding this service. The new entity that I propose we create will be a business-to-business operating unit. On the one hand, we absolutely need to be able to ensure that we meet the changing needs of our new e-commerce customers. On the other hand, maintaining our more traditional organizational structure, so that we can continue to meet the needs of our long-term, established customers, is as important as ever. Brandy, I want you to lead this new e-commerce division. Please send me a business plan that outlines how you will design the organizational structure of this new division. I am particularly concerned about how this division will fit into our current organizational structure. I expect this at your earliest possible convenience.
CASE DISCUSSION QUESTIONS
Assume that you are the Vice President of business development for Good Foods, and respond to the memo from Joe Gittleman, the Chief Executive Officer of Good Foods. How might the company change its structure and design to improve its situation? How should the company transition so as to accommodate e-commerce customers while maintaining its traditional business base (90% will operate in this traditional manner)?