GLOBAL E-BUSINESS MANAGEMENT GBMP 522 – 01

JAGGED PEAK INC. REPORT

SUBMITTED TO: ALAIN LONDES

PREPARED BY:

CHIRAG PATEL JUBIN ZAVERI

KAMLESH CHAUHAN JAY VINOD

ATUNWA OLUMIDE

4/13/2012

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Table of Contents 1.0 INTRODUCTION: ................................................................................................................................ 1

2.0 PRODUCTS AND SERVICES: ............................................................................................................... 3

3.0 BRANDING AND PROMOTIONAL STRATEGY: .................................................................................... 5

4.0 PORTER’S FIVE FORCE: ...................................................................................................................... 6

4.1 THREAT OF NEW ENTRANTS: ........................................................................................................ 6

4.2 BARGAINING POWER OF BUYERS: ................................................................................................ 6

4.3 THREAT OF SUBSTITUTES: ............................................................................................................. 6

4.4 BARGAINING POWER OF SUPPLIERS: ............................................................................................ 6

4.5 COMPETITIVE RIVALRY: ................................................................................................................. 7

5.0 SWOT ANALYSIS: ............................................................................................................................... 8

5.1 STRENGTHS: .................................................................................................................................. 8

5.2 WEAKNESSES: ................................................................................................................................ 8

5.3 OPPORTUNITIES: ........................................................................................................................... 9

5.4 THREATS: ....................................................................................................................................... 9

6.0 SUCCESS FACTOR: ........................................................................................................................... 10

7.0 CONCLUSION: .................................................................................................................................. 12

8.0 RECOMMENDATIONS: .................................................................................................................... 13

9.0 BIBLIOGRAPHY: ............................................................................................................................... 14

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1.0 INTRODUCTION:

Jagged peak was vision by Demirdjian in the late 1990’s while dealing with an online computer retailer.

After waiting for nearly a month he called up service call centre and was astonished to find out that they

could not locate his order or could not locate if the product is in stock, it was from this incident

Demirdjian decided to develop an on demand, web-based order management solution. He eventually

developed software applications to create a supply chain software platform that could be used as a

single multi channel system with one database, one administrative environment and one branded

customer experience.

At the beginning he founded IBIS (Internet Business Integrated Solutions) in 1999, it was just a

information presentation layer base website and eventually converted into transaction layers, working

from home he build up EDGE Jagged Peak’s flagship brand.

He later felt that he needs additional expertise in fulfillment to address the entire cycle- from customer

order to delivery. IBIS and Compass marketing services base in St. Petersburg, Florida formed a merger –

one an emerging leader in web-based technologies; the other a stalwart, warehouse and fulfillment

company.

After the merger the three people i.e. Demirdjian, Vincent Fabrizzi and Daniel Furlong who were highly

expertise in their respective field came together for one company Jagged Peak. Demirdjian had over 20

years of senior management experience in different field while, Vincent J. Fabrizzi was the CEO and co-

founder of Compass Marketing Services. Together with Daniel Furlong in 1988 they founded Paradigm

Communications leading to $60 million in revenue and 160 employees.1

1 Source: Jagged Peak Case Study

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Jagged Peak main business was to offered e-commerce software and fulfillment services, but due to

their wide breadth of services, they were not able to define their value proposition, USP, Market

Positioning nearly ten years of operation. They were able to survive dot com crash as well as they were

having Fortune 500 clients but the list was too small. Furthermore, economic crisis in 2008-2010,

significantly impacted the retail and consumer goods industry that they served. They also faced difficulty

in deciding company mission and vision as well as value proposition and target market after nearly 10

years into the business.2

2 Source: Jagged Peak Case Study

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2.0 PRODUCTS AND SERVICES:

Jagged Peak offered EDGE enterprise level business management software that let users manage every

aspect of their demand chain; it manages entire demand side of supply chain. The software platform

contains advanced functionality required to conduct Internet based business and also consolidates

demand that originates in any other demand channel, including electronic data exchange (EDI) and

point-of-sale (POS).3

The company was able to offered flexible models which differentiates their products from their

competitors. They also provide Software-as-a-service (SaaS) model with a more flexible and affordable

model. In 2008, the company launched a series of EDGE variants in the market.

EDGE FF - friends and family private online marketplace

EDGE M3 - marketing materials management

EDGE DAM - digital asset management

EDGE PWR - product warranty registration

EDGE ROM - repair order management (reverse logistics)

EDGE B2B - business to business e-commerce

EDGE B2C - direct-to-consumer e-commerce4

Fulfillment Services:

Jagged peak also offered fulfillment services to its clients, although it did not generate significant

revenue but it did provide distinct advantage over other ecommerce providers.

Aces:

3 http://www.jaggedpeak.com/event/page/pageCode/platform

4 Source: Jagged Peak Case Study

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The company developed a unique metrics called ACES, Achieving Customer Experience Superiority it

measured the component of customer experience as they relate to order fulfillment.

AcroBoo:

In 2008, company created a new division, AcroBoo Commerce, to help clients sell products online

through web store fronts – a solution that minimize channel conflicts for companies with traditional

retail storefronts. It helped them to provide with new revenue stream.

eChannel Management:

Stores were not generating significant margins due to highly competitive industry. In addition, low

priced grey market and counterfeit products were being marketed in the same channel as authentic

items. In weak economy, consumers benefited from low priced items but retailers were earning measly

margins which affected their ability to offer quality customer service (Pereira, 2008). Ultimately,

consumer brand images were suffering and manufacturers that did not have a minimum advertised

pricing (MAP) policy could do nothing to stop declining margins, during this time the company

discovered a new source for their clients that will provide brand protection solution as an value added

services.5

5 Source: Jagged Peak Case Study

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3.0 BRANDING AND PROMOTIONAL STRATEGY:

The company was a self start up and had little money to advertise and build brand recognition and over

the top they were competing with big technology firms having multi millions marketing budget.

The executives used their past dealings contact to get into giants like Tag Heuer, Swatch, and Nestle.

The company offered beta programs to their clients in exchange of the rights to use their names on

testimonials and promotions. In 2001 and 2002, Deloitte and Touch listed Jagged Peak among America’s

fastest growing technology companies. The company was also ranked third among Florida High

Corridor’s “Fast 50” companies in 2001.

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4.0 PORTER’S FIVE FORCE:

4.1 THREAT OF NEW ENTRANTS:

The threat of new entrants in ecommerce solution and fulfillment services is high as there are no

stringent laws pertaining to this industry. There are lots of small companies who offer same type of

services although there services are not that much efficient.

4.2 BARGAINING POWER OF BUYERS:

In general, bargaining power of buyers is high as there are lots of other companies offering similar

services though Jagged Peak offers one solution to all the problems. The clients are free to choose the

company or provider according to their need, budget and time constraints.

4.3 THREAT OF SUBSTITUTES:

There are no direct substituted of the services that Jagged Peak offers, and it’s the only company in the

market who offers EDGE platform addressing all the specifications of the clients. Jagged Peak also

started to offer its EDGE solution in different variants and according to the customer requirements and

subsequently they also established ACES and AcroBoo leading further superiority in its service offering.

4.4 BARGAINING POWER OF SUPPLIERS:

Jagged Peak as a company requires money for support its value chain activities at this stage of its

business as well as to meet up with the expectation and setting up IT infrastructure also requires

significant amount of investment and for R&D facilities. The bargaining power of suppliers is low at this

stage of Jagged Peak as slowly they have started to report profit from 2011.6

6 http://www.prweb.com/releases/2012/3/prweb9347219.htm

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4.5 COMPETITIVE RIVALRY:

The competitive rivalry is high as there are lots of direct competitors and as well as big giants like FedEx

and UPS who has started to expand its services in this field and they can spend multi million dollars on

advertisement as compare to Jagged Peak as they solely rely on word of mouth advertising.

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5.0 SWOT ANALYSIS:

5.1 STRENGTHS:

1. Market Presence: Jagged Peak has been one of the pioneers in the e-Commerce Industry. They

have survived the Dot-Com Crash as well as the 2008-09 Recession. The company has been a

prominent player since more than 10 years, which developed a good amount of reputation in

the industry.

2. EDGE: The Software EDGE is their main strength in terms of various software platforms available

in the market. This software offers flexible business models for every user. The efficient

performance as well less implementation time has attracted companies such as Tag Heuer, Louis

Vuitton etc.

3. Acroboo: A new division which offers web store-fronts for niche products. This shows the

company’s diversified as well versatile operations.

4. Flexible Solutions: Jagged Peak doesn’t only offers software platforms to multinational

companies but also to medium and small scale industries. It covers a wide-array of services for

all the fits.

5.2 WEAKNESSES:

1. Complexity: Too many services and platforms have created confusion within the organization.

The top-level management found it difficult to sum-up the company’s vision in few sentences.

2. No vision: The Company doesn’t know where they want to be in future or in coming 5 years.

They catering the needs of their customers and now its getting difficult to keep all the eggs in

one basket.

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3. Brand Recognition: Weak Web-presence and promotion led to low brand recognition. Even

though they have successfully penetrated into the top 500 fortune companies, but there are

many competitors which are fighting their way up.

4. Channel conflict: Its getting hard for the management to decide on which channel should they

concentrate on, Traditional Retail Channels or Direct Online Sales Channel.

5.3 OPPORTUNITIES:

1. ACES: The Company’s new unique technology to measure the components of the customer

experience has humongous potential within the industry. Experts believe that ACES can improve

Jagged Peak’s position as well as can make EDGE a superior software platform. They need to

address more attention towards this unique feature, which can attract many companies such as

Forrester, Accenture etc.

2. Online Sales Channels: Now days most of the retail companies are creating an Online channel

for Online Sales. It leads to potential opportunities for the company which already is having a

trouble selecting one particular channel.

5.4 THREATS:

1. Competitors: As the industry is growing, more and more companies have plunged in. Jagged

Peak is already fighting for Brand-recognition; the severe competition might lead to serious

problems for the company. If the customers are not aware of what do the products offer no

matter how better they are, then everything goes to waste.

2. Emerging Trends: Day by day, the trends are changing, The Company needs to cope-up with this

emerging trends. The company has been focusing on innovation within the products, but their

weak brand-recognition can add up to this threat.

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6.0 SUCCESS FACTOR:

Combination of ecommerce and fulfillment service:

Jagged Peak was the first company who successfully offered a combination of ecommerce solutions and

fulfillment services, although the later not generating significant amount of revenue still it proved to be

a value added service to its clients who wants to take advantage of fulfillment service of Jagged Peak.

The software was able to handle all the activities that take place during and after the order process.

Their flagship platform EDGE can apply the most complex demand management decision rules and

delivers perfect orders to the appropriate systems.

Leveraging the Executive experience:

Jagged Peak top executive Vincent Fabrizzi’s experience in advertising industry helped Jagged Peak to

not waste money on advertisement instead he leverage his relationship in past dealings in advertising to

get Jagged Peak foot in the doors of several Multi-national corporations like Swatch, Nestle and recent

being LVMH, Davidoff, Switzerland tourism, Swiss Airlines, ESPRESSO etc.

Different variants of EDGE:

In 2008, the executive at Jagged Peak started to think of alternate ways to differentiate it and generate

revenue during economic crisis. They soon came to realize that Jagged Peak was able to provide

affordable, off the shelf, web-based software solutions as a new opportunity for product marketing.

Fabrizzi launched different variants of EDGE platform to solve variety of business problems.

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Direct online sales channel:

In 2008, retail industry was facing worst crisis in U.S. ever, clients were approaching Jagged Peak to

develop direct-to-customer online sales channel but they were also afraid of traditional retail channel

conflict. Although not being a leader in D2C but still they were the early adopters, the challenge against

them at that time was to convince non-adopters of using D2C and take advantage of it.

Affordable and Time Saving Platform:

In 2009, a breakthrough happened when a global consumer products company approached Jagged Peak

and asked to develop new distribution centre, B2B, B2C Web based stores, and provide order

management in Canada. In general, this requires integration of different solution from different

providers. The company was able to solve this within sixty days and one-tenth of the cost as compare to

its competitors and they were offering this service in sixteen weeks. This was unheard still in this

industry, and after that they realized competitive advantage over its rival.

Multiple Execution Point:

Jagged Peak was able to attain what other believe was unattainable- to connect multiple execution

points-from initial customer contact through final order disposition in real time, with a single solution.

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7.0 CONCLUSION:

Jagged Peak is now one of the pioneers in the e-Commerce Industry. Since their inception, the company

has seen many ups and downs; they fought the Dot-Com crash and 2008-09 recession also, whereas

other companies couldn’t do it. The CEO Paul Demirdjian has led the company from the front, that made

them not only successful but also one of the fastest growing company. Various versions of EDGE has

catered the needs of their customers.

The company has flexible services as well as software platforms for various sized customers. One of the

reasons to success is the flexibility & various versions which the company offers to their customers. Even

though they had weak promotion & branding strategies, they perforated the top 500 fortune companies

due to word-of-mouth.

Jagged Peak has been an exception for being successful without having any vision. Top-level

management realized the necessity of having a mission and vision and also underwent some changes.

New strategies were created for efficient web-presence.

Many opportunities lies ahead and the management think that they are ready to face it. The company

evolved and has made changes internally.

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8.0 RECOMMENDATIONS:

1. Advertising

2. Vision, mission and Competitive advantage

3. R&D

4. Concentrate on Fulfillment services

5. Continue with e-Marketing

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9.0 BIBLIOGRAPHY:

http://www.prweb.com/releases/2012/3/prweb9347219.htm

http://www.jaggedpeak.com/event/page/pageCode/platform

http://www.jaggedpeak.com/

Jagged Peak Case Study