79th Academy of Management Annual Meeting
Digitization and artificial intelligence technologies are reshaping the way of doing business and the landscape of business competition/collaboration. Five Alibaba top executives will share their view and practical experience on new retail, new logistics, new education, new governance, and new value system. All these experiences showcase how technologies help establishing an inclusive and enabled world.
This case describes the development and struggles of Opple Lighting (Opple), a leading Chinese company in the lighting industry. Opple explored and developed an e-commerce business in response to the threat of emerging e-commerce retail channels in the online lighting market. There were significant differences involved in running an e-commerce business versus a traditional (offline) sales business in this industry, and most of Opple's management team disapproved of the development of the e-commerce business division; they believed that e-commerce operations would inevitably cannibalize the existing offline business. How would the e-commerce business division gain the needed approval and support from the other business divisions? There were "hidden rules" behind the murky pricing practices in the traditional lighting industry, whereas e-commerce stressed price transparency. How could the e-commerce business be operated to avoid direct conflict with the offline sales channels? Traditional lighting products were characterized by a long product development cycle with a large-scale supply-chain distribution channel, whereas e-commerce lighting products emphasized small batches with rapid development and updates. How could the e-business departments resolve the challenges and conflicts in production, logistics, new product development, and distribution between traditional and e-commerce sales?
This case details how Opple grew its e-commerce business from zero to RMB 1.5 billion in five years and optimized its e-commerce supply chain by reorganizing its product development process, manufacturing, logistics, warehousing, marketing, and after-sales service. It also looks at how Opple adjusted organizational structure changes, encouraged innovation, overhauled talent management, and improved its performance management systems to eventually achieve rapid growth in sales performance. In 2017, sales revenues for three-commerce division were nearly 2.1 billion yuan, representing 25% of Opple's total revenue and making the e-commerce business a new growth engine for the company. That division also encouraged changes to Opple's culture, organization redesign, and incentive scheme, helping to drive rapid growth in the company's other businesses and – more importantly – providing the necessary incubation period for several other Opple businesses.
organizational structure adjustment
traditional enterprise transformation