Knowledge Management and E-Commerce

Question: Discuss about the Knowledge Management and E-Commerce. Answer: Introduction: According to Palma et al., (2014), Knowledge Management (KM) is the planning, motivating, organizing and controlling of people in an organization, which helps to ensure that the knowledge related assets are improved and are employed effectively. The assets include knowledge in the form of documents that are printed such as the patents and manuals. The process involves acquisition, refinement, sharing and utilization of knowledge. The goal of KM is to improve the knowledge of the asset that is present in the organization to have an overall improvement in the behavioral pattern of the organization and the performance of the organization. The social processes of KM include the practices within the community which helps in organizing the groups of people who have a common interest and the networks that are followed to allow people with low knowledge to interact with people having higher knowledge. Therefore, the processes of KM are concerned with people and are less based on the technological front than what most people believe (Premkumar et al., 2014). E-commerce concept It is the process of buying and selling goods and services through the medium of internet. It is a framework, which includes the transactions related to supporting the creation of revenues other than the selling of goods, which helps in creation of revenue. The activities include the creation of demands for the goods, offering support in sales and providing service to the customers. It also promotes the process of communication between business partners (Flanagin et al., 2014). On comparing with the traditional commerce and the e-commerce practices, it is seen that the e-commerce sector does not possess any stores or outlets because the physical interactions between the buyer and the seller is not present. Technologies such as web and telecommunications play a huge role in facilitating the success of this method of commerce. Traditional practice includes magazines and flyers to make the customers aware of a new product and the information related to it whereas ecommerce uses the web sites and online catalogs to do the same. The communication process that is followed in traditional commerce are mails and phone calls, faxes and letters whereas the ecommerce sector uses e-mails, web sites, and the internal networks that are available for the communication process (Mangiaracina, Brugnoli Perego, 2015). Knowledge Management and E-commerce of Fonterra The market size of china is vast with the growing urge for the ecommerce sector so that the products can be delivered to them. The company capitalized this opportunity as it saw that it was one of the ways to become the leading brand in the country again. The company launched its Anchor brand of dairy through proper and careful study of the market in which it was very successful (Pavlovich, Sinha Rodrigues, 2016). The demand for premium milk and its products was on the rise for the Chinese consumers as they relied on Europe for the products where the advantage was taken up the Fonterra group. The milk scandal that happened in China was a very bad experience for all the dairy farms that operated there since there were the issues regarding the supply chain management. The supply chain of the company was very well maintained which helped the company to establish their brand as a premium one. One of the main factors for the success of Fonterra was that the government encouraged the Chinese people to increase the intake of milk every day (Delaney Haworth, 2016). According to Nilsson Rydberg (2015), one of the main factors for the consumption of imported goods was the result of urbanization. It was seen that there was a shift to the cities by the Chinese people, which directly resulted in large consumption of consumer goods. Fonterra did a careful research of the market and gained knowledge on how milk was becoming a recognized consumable item for the Chinese people, they identified the prices and targeted the key players that would help them to establish themselves in the market. The company saw that Mengniu and Yili, the two companies controlled almost 80 percent and 84 percent respectively of the entire milk market. The companies had around six brands and a very well maintained distribution channel. Fonterra in their research concluded that they would target the mothers who were the purchasers for the entire family in terms of the nutritional factor. The company did a thorough three months research of the market and further spent six months on developing the concept and testing the products as the market kept on changing every day. The company used the local offices as their partners to gather information of the markets, as they would have a better sense in the everyday activities that were taking place rather than the Fonterra group. The company also took the help of local networks such as Weibo and WeChat to communicate with the local agencies so that the recommendations can be received from places like Shanghai. It is because it was this place where the company had earlier worked when they had first entered the Chinese market so they had a clear idea of how Chinese consumers use and exploit their mobile and social networks (Shadbolt Duncan, 2014). Product launch The company launched its product near the Yangtze River delta, as the primary target was the consumers of Shanghai, which included around 150 million people. The number of consumers targeted by the company for the launch of its product was as big as the size of Western Europe (Woodford Lucock, 2013). According to Galtry (2013), the company chose Shanghai as it was the location of the head office for the company and for the ease of distribution by the company. Shanghai is also one of the most urbanized and highly dense places in China with respect to the supermarkets and hypermarkets, which was in line with the strategy of the company. Ecommerce in China According to Driver et al., (2015), one of the brands of the Fonterra group, Tip Top will be sold online through Tmall, which is one of the leading ecommerce network providers in China, which is headed by the Alibaba Group. The Zhuhai Ice Technology who are specialists in this case will handle the distribution of the frozen products. The company took a flexible trial approach by using the e-commerce technology to test whether the Tip Top brand would be ready to capture the Chinese market in the future. One of the biggest markets for the Fonterra group is China, so the company took this risk to offer the people with some more benefits. The company through this program will understand the market in terms of sales platform and the format of the product, which needs to be changed according to the changing demands of the consumers. It was necessary for the company to get in to the take-home sector so that they can capture the opportunities that will arise in the market as soon as possible . Tip Top initially launched the two-litre tub range and offered novelty sticks as well as the bulk scoops. The Chinese consumers would be able to order the six most popular flavors of Tip Top that are vanilla, chocolate, Hokey Pokey, Cookies and Cream, Neapolitan and Strawberry. This was done to ensure the Chinese consumers that they were buying the same products as the consumers of Australia and New Zealand would get. The kind of product, the packaging style and the flavors that are available would be the same as to what the consumers purchased in the other countries, which would bring the assurance of the Chinese consumers with respect to the quality and authenticity of the product (Singh, Pangarkar Heracleous, 2014). Conclusion Therefore, it is seen that the tactics applied by the Fonterra group was indeed successful in gaining a competitive advantage over the rival dairy farms operating in China. The company spent many months in researching the markets to its core and understanding the nature of it. The target consumers were identified in a proper manner and the company was keen on supplying the products to them, as it would result in the consumption of the family wholly. The company made a strategical move in launching the product in Shanghai because it had the combined power of its main office and the growth in population as its main advantage. The launch of one of the most popular ice cream brand of Fonterra, Tip Top was launched in China following the e-commerce sector through Tmall. This launch was a trial in the ecommerce sector as the company wanted to test the reaction of the Chinese consumers in the market. The company provided the same quality of food product with the same kind of packaging and a ll the flavors that was available to the Australia and the New Zealand consumers. This proved as an added benefit to the company as the consumers in China were attracted to the product and ordered huge quantities of products through the online media. This proved to be turning point for the company in the online business sector as the company was able to establish its brand image in the minds of the Chinese consumers. Reference List Delaney, H., Haworth, N. (2016). Partnership in Practice in New Zealand: Improving Productivity in Fonterras Whareroa Site. InDeveloping Positive Employment Relations(pp. 305-325). 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