STATEMENT IN THE PROBLEM
Shiny, James and Sam need to decide regardless of whether to partner with AOL or persist while using current combination of methods to attract customers and generate an increase in sales.
(Business model with AOL collaboration written in grey)
Income from Items
Revenue coming from Advertising
QUALITATIVE ANALYSIS – Advantages and disadvantages of every alternative
Reject the AOL Collaboration
•Would save $2million that would or else be used on the deal with AOL •Avoids having to pay pertaining to cost of exposures on AMERICA ONLINE
•Is able to retain complete control of the company
•Can spend the money elsewhere
oPrint and mail even more catalogs
oBuy exposure on tv
•Miss out on an opportunity of generating even more sales
oMore and more folks are using the internet and shopping online •Faces increasing competition from competitors who will be more focused on moving sales initiatives online •Could lose the offer to iTurf who is partnered with their biggest competitor, dELiAs Inc.
•Create a far more stable environment in a speedily changing environment •AOL may bump up Alloy's IPO stock price by simply 10%and support generate $55. 5 mil •AOL is a good medium going to their target market and in general can help enhance site trips, registrations, on the net orders and customer repository oMore than the usual third of visitors to the Alloy internet site used AMERICA ONLINE as their internet connection provider oMore individuals are going online and using the internet, specifically Generation Y oWill support Alloy boost sales as increasing numbers of competitors always enter the industry •Will help Alloy continue to build the 3Cs: Community, Content, and Commerce
•Would have to spend $2million
oMoney could be invested somewhere else that would help the company help to make more earnings than they will partnering with AOL •Risks giving up a whole lot of control to AMERICA ONLINE...