Knowledge Management

Knowledge Management is an umbrella term for making more efficient use of the human knowledge that exists within an organization. The major focus of knowledge management is to identify and gather content from documents, reports and other sources and to be able to search that content for meaningful relationships. (http://www.findwhitepapers.com)

Essentially hmv.com could use knowledge management to help give them a better competitve edge over their main rivals. If knowledge management was unable to improve the business in anyway it would be very suprising.

Recenctly hmv.com used a from of knowledge management to help increase their customer numbers through advertising. In 2001 Hmv.com used a company called eGain. The eGain Campaign is an e-mail marketing and proactive customer service solution that offers functionality based on proven one-on-one marketing techniques for planning, targeting and executing high volume direct marketing programs. Basically this means that hmv took time to target their mailings based on customer preferences to ensure that emails only go to people who would be most interested in them. This means a higher percentage of emails will not be “wasted” on people who are never going to use hmv.com. Therefore more potential customers will recieve the advertising emails and hopefully like what they see and make a purchase.

Another imoportant form of knowledge mangement hmv.com have implemented is thast they allow their customers to rate the items which they have purchased. These ratings are then made available to all customers who can relate much easier to the review than the could to say a coporate review. This may not increase sales but it is a form of customer service and may incourage more customers to be loyal to the business. This may also prevent the customer service departments’ time being wasted by questions that could be answered in these reviews.

Staff employed at hmv stores are more than likely into their music/gaming or both which is probably why they are in the job. Their knowledge of new bands, albums, games and consoles will be plentiful but unfortunately is probably wasted as they probably only get it across to customers who ask questions. An online blog or a few pages on the website could display the staffs thoughts and knowledge of all this for potential and current customers to read. Kind of like the customers reviewing their purchases but more in depth and probably coming from people in a better position to be giving their opinion on the products.

Traffic Building

Search Marketing
SEM is a form of internet marketing which aims to increase a websites visibility in search engines.
Increasing visibility in a search engines gives a website more chance of being returned as the first site in the results pages. Hmv.com pays search engines to return their site at the top of the results pages (talked about in last weeks blog) these sponsored links ensure hmv.com is as visible if not more as its online competitors.

Online pr
PR is the practice of managing the flow of information between an organization and its publics. PR exposes a website to their audiences using topics of public interest and news items that do not require direct payment. These can be in the form of blogs or media alert services for example. Hmv.com have this year set up a site specifically for hmv blogging customers. http://hmv.com/blogs. HMVblogs is designed to allow communication with HMV.com customers, and to provide further leverage of the company’s “Get Closer” brand. Get Closer is hmv’s social networking site. The site allows users to import music and film files and create their own library. They will be connected to other users with similar tastes to form so-called ’spider clouds’ around the artists, genres or films that they have in common.

Online Partnerships
As Hmv.com is a leading player in its market in both high street stores and online, a partnership would be of no benefit. There would be no need for sponsorship as the hmv group is a huge company and more than capable of funding themselves. Co branding is more so for companies who create their own products. Hmv.com mainly sell products bought from suppliers and record companies for examples.

Interactive Ads
Advertising is a huge deal in e-marketing and will contribute a lot to traffic building. In the sites i have visited today i haven’t come accross an ad for hmv or any of its competitors, though in the time i have been writing this blog (with the tv on in the background) there has been an hmv ad on tv. For this tv ad to increase the traffic flowing to hmv.com the customer would have to go out of their way to access the internet and visit the site. Online advertising means the site is literally one click away when the advert appears, a lot more users would be inclined to access the site with one click than have to put in the effort of moving from the tv to the computer and searching fot the site or typing in the address.

Opt in e-mail
Opt in e-mail is when a customer is given the option to receive “bulk” e-mail, that is, e-mail that is sent to many people at the same time. Typically, this is some sort of mailing list, newsletter, or advertising. Obtaining permission before sending e-mail is critical because without it, the e-mail is Unsolicited Bulk Email, better known as spam. Hmv.com uses confirmed opt-in (COI).
A new customer is asked if they want to subscribe to the mailing list when they purchase a product a confirmation e-mail is sent to verify it was really them. Many believe the person must not be added to the mailing list unless an explicit step is taken, such as clicking a special web link or sending back a reply e-mail. This ensures that no person can subscribe someone else out of malice or error.

In this weeks blog I will be assessing search engines and where hmv.com appears for particular searches. The most popular search engine on the web is arguably google. This will be the main engine i will use.

Obviously if i search for HMV with google the results will display hmv.com at the top of the list. The highlighed link at the very top is a sponsored link, which means hmv.com pay google for this ad to appear there. Below this sponsored link begins the list of results returned from the search, hmv.com at the top again.

search results

This search is quite specific which is fine if the website address isn’t known. If however some one is searching for a product that hmv sell, say dvd’s, this changes the search results quite a bit.

If i searched for dvds for instance, which is where hmv.com generates a lot of its revenue, the first sponsored link is to one of its main competitors, zavvi.co.uk. Forgetting about the sponsored links and looking through the results, hmv.com doesnt appear in the 1st three pages. By this point i had lost interest looking for it. Most user would probably only look as far as the 2nd page at a push. In the first page alone both hmv’s main competitors, zavvi.co.uk and play.com, appear. These findings are almost exactly the same when “cds” and “games consoles” are searched for on google. Though with these last two searches hmv.com doesn’t even appear as a sponsored link.

When searching with various other engines, yahoo and ask.com, hmv appears again as a sponsored link but is not returned as a result in the 1st three pages. This prob doesnt effect hmv.com too much as they are sponsoring their links but if for some reason this was prevetned they would struggle to be recognised a head of their competitors when customers are searching for general goods which aren’t exclusive to hmv.

Cloud Computing

Cloud computing is becoming the next big thing for smaller businesses who are expanding at a high rate. There are three basic layers to cloud computing, Application, Platform and Infrastructure. Companies use these layers differently to suit their needs.

Infrastructure is the foundation layer of cloud computing. This is where things start and companies begin to build their web site. Cloud hosting is contained within the infrastructure layer. Usually a business would create their web site and have it hosted on a dedicated server. A few people use the website to begin with and then word spreads and more and more people begin to use the site. Now the website has become successful but customers may start to get frustrated as the sheer volume of users will slow the service down as the equipment can’t cope with the demand. This means that the company has to buy or rent more servers and set them up or get someone else to set them up which costs a lot of money and takes a lot of time. Cloud computing aims to solve this problem. With cloud computing you have access to computer power whenever you need it. If your site is hosted on a cloud server and more people start to visit it you may need more power dedicated to your site. Thanks to cloud computing you can scale up the amount of computing power you need from the cloud almost instantly. Having this at your disposal means you can keep you users happy with out them noticing a change. If your business starts to slow down and you find that you need less computer power, which will cost less, you can release servers back into the cloud. This reduces costs for the business since you only pay for the service you use. Cloud computing allows you to concentrate on building your business and not waste time and money worrying about your hardware.

Cloud computing has great potential with smaller businesses and e-commerce. Businesses selling products rather than providing a service may benefit more from cloud computing as they may find that business picks up and dies off around different seasons. Most commercial products will be more in demand in the run up to Christmas for instance. This may mean that a business will attract more sales from its website and this could mean more computing power may be needed. To buy/rent another server to cover this wouldn’t make sense or be cost effective and the increase in sales would have to be anticipated to give the business time to set up the new server. Cloud computing eliminates the need to anticipate a boom in sales as almost instantly the business can increase its computing power to the level needed. When the seasonal sale boom is over the extra power added can be released back into the cloud instantly so the business only has to pay for the power it needs to run the site efficiently. Also if there is no increase in sales then money won’t have been wasted buying or renting server power as with cloud computing the business only has to increase power if and when its needed.

Larger more established companies who have already spent a lot of money on their sites and servers over the years won’t be willing to throw all that time and money away to move to cloud computing as readily as smaller companies. Cloud computing controls all the hardware and equipment used for hosting a site. Big companies like to be in control and know everything that’s going on, so not being able to control the hardware and equipment may well be off putting to them as they could view it as a big risk leaving an aspect of their business in the hands of “strangers”.

Supply Chains

Hmv.com uses mostly a pull approach to supply chain management. Hmv can only really improve service quality and not the quality of the product. The purchasing cycles and response times of queries and orders are almost immediate. Information is shared between hmv.com and its suppliers allowing low levels of inventory to be kept without the risk of losing a sale. By focusing on the pull approach to supply chain management hmv.com are allowing they to constantly deliver value to its customers.

Hmv.com uses virtual integration in its everyday running. Most supply chain management activities are controlled outside of hmv.com, who in turn keep a close relationship with its suppliers. The business is not totally reliant on linked third parties as hmv.com has numerous stores to back up its supplies. These would only need to be used in extreme circumstances.

HMV Canada is partners with Bell in an exclusive distribution agreement. Bell Mobility’s superior wireless products and digital content distribution capabilities are available across the country in HMV Canada retail locations. This partnership leverages HMV Canada’s role as the nation’s leading retail entertainment destination with its media focused customers. Bell Mobility itself is also partners with Solo Mobile and Virgin Mobile; these companies will also offer products and services at HMV Canada locations.

Hmv.com’s procurement is maintained simply by long term partnerships and repeat purchasing. The products and services that hmv.com provide are obtained from a very limited number of suppliers. Using the same supplier for a long time not only shows loyalty but gains respect from the suppliers itself and this will ensure competitive prices

Threat of substitute products

Hmv.com is as open to the threat of substitute products as much as any other business. Fortunately for hmv it has long been established as one of the major businesses of its kind in both Europe and Asia. Hmv has two major competitors which offer only substitute services but identical products; this keeps the market competitive both online and in store.

The threat of the entry of new competitors

In order for a new competitor to be able to compete in this market they would need to launch their business on a global scale, this is almost completely unfeasible due to the shear amount of money it would take. Due to the way the music industry is going the amount of music being sold as hard copies is dropping more and more. This therefore opens the door to business like i tunes which are entirely online and distribute no hard copies. However music has become a very small side of HMV.coms revenue with the majority being generated through dvd and games consoles.

The intensity of competitve rivalry

 As mentioned previously in this post, and others, hmv.com has two main competitors(play.com and zavvi.co.uk) hmv and zavvi are not so competitive when it comes to price as they are both reliant on mainly store based sales, and with their stores more than likely being close together in every major shopping town. This tends to keep the prices similar in these two business and they try to compete more through innovation and marketing. Play.com on the other hand are an entirely online based business and compete alot more through price as they have less overheads to pay.

The bargaining power of customers

Straight up bargaining with hmv.com is never going to happen. Prices are set by the company and thats what has to be paid. Being unable to bargain online is over come by the ability to shop around through a vast range of suppliers, shopping around via the internet greatly increases your chances of finding the same product for a better price. This being the case prices is likely to be forced down through increased customer knowledge and price transparency.

Bargaining power of suppliers

Suppliers of products to hmv.com are the same suppliers that supply all other similar businesses. It would be unfair for these suppliers to charge different prices to different companies for the same product. This means that the suppliers could use this as a source of power over these businesses. As the companies cannot get these specific products from anywhere else they may find this source of power pressurizes them into operating in accordance with the suppliers wishes

HMV.COM

As a website hmv.com is relatively slow, infact 65% of websites load faster than hmv.com’s average of 3.2secs. This slower speed is probably due to the amount of graphics and promotion ads used one their homepage that i mentioned in a previous blog.

When searching for data on hmv.com i came across some remarkable statistics. hmv.com has a traffic ranking of 274,787 in the world according to http://www.alexa.com. That is a drop of 258,118 places in three months. This may not mean anything on its own but when compared to its main competitors today, play.com (globally ranked 909) and zavvi.co.uk (globally ranked 14,898 ) it is quite a shocking fact. Also in the last three months the number of global users who visit the site has dropped 94%! These figures show a significant struggle for hmv.com to compete in this market. However hmv.com.hk, the Hong Kong branch of the business shows i higher level of interest from users around the world. Hmv.com.hk isglobally ranked 3,639 a massive 271,148 places higher than the main site itself. More astonishingly 72.9% of hmv.com.hk users are based in the UK!

Global rankings in the last 6 months

The technology used when perchasing from a site like hmv.com is relatively common nowadays. Simple home computers with internet access are used to visit the site and navigate it easily. The site uses a “shopping basket” so when buying you can add multiple items to your shopping basket to save you from having to purchase one item at a time. When an item is chosen the website queries its database to see if the item is an stock. if so the sale will continue, if not a message will be displayed telling the uder that the item is out of stock and if/when it will be available again. Once an item is purchased the website then updates the stock level in the database. This is all done automatically by the website itself with no real human interaction apart from the user selecting the item. The user enters their postage and payment details which are process again automatically and stored temporarally. Once the payment is complete the order is passed through to the dispatches department who package the item(s) add the postage labels and post. Various pieces of software are used to create somewhat complex codes in order for the site to work as it does. this requires a team of IT professionals to maintain the site and keep it fully functional. After all if the users cant order products through the site then there will be no sales.

Due to the boom in mobile internet access thanks to technologies such as EDGE (Enhanced Data rates for Global Evolution), used on mobile phones such as the i phone and htc’c touch diamond, and UMTS (Universal Mobile Telecommunications System) internet is almost available everywhere we go.  Shopping via mobile phones would be by far the most convienient form of purchasing today. Certain things will need to be considered though, for instance, The website itself. Trying to open a website designed for a desktop web browser using a moblie phone will no doubt cause problems. A smaller simpler version specifically for use on a mobile phone would have to be devised. Also the payment options may have to be considered. Whipping out your credit card on a packed bus or train for 5mins while you try to type the numbers in isnt exactly the most sensible thing to do. Maybe an online account could be created with a limit so orders could be made without needing to enter payment details. Then accounts could be paid off another time or if the user has credited their account it can be automatically deducted.

THIS IS HMV

hmv.com is an online music store. Providing all the services and items you’d expect from a high street music store at the click of a button. The website provides a search box for the site itself and categorizes the stores item to make navigation simple and effective. Pictures and descriptions are provided for each item giving the user a better understanding of what they are purchasing. Advertising graphics along the top and side of the page give a consistent layout. The website also provides a shopping basket. This allows shoppers to buy multiple items at once. When browsing a customer can add items to their basket with out have to navigate away from the current page. Once shopping is finish the customer can take their shopping basket to the checkout and remove items or edit quantities.

 HMV music is part of the hmv group which controls hmv music stores and Waterstones book stores. The majority of turnover comes from stores located all across the world. The hmv website is just another channel to access the business.

The first HMV shop was opened in 1921 at 363 Oxford Street, and has developed into one of the world’s leading retailers of music, video and games. HMV prides themselves on providing an authoritative range and depth of selection that is superior to that of its competitors, including hard-to-find recordings and a large number of back catalogue titles.

Hmv was originally owned by EMI until 1998 when HMV group was formed. HMV group acquired HMV and Dillons from EMI and Waterstone’s from WH Smith. Waterstone’s and Dillon’s brands were subsequently merged and the HMV group grew from there. In 2006, the HMV group also acquired Ottakar’s and this has also been merged with Waterstones.

HMV Group operates from approximately 692 shops in 7 countries and total retail floor space of 3.6 million square feet (following the disposal of HMV Japan). For the full year ended April 2008, HMV Group had a turnover of £1,936.1 million (April 2007 £1,894.5 million) and an operating profit of £66.2 million (April 2007: £54.0 million).

HMV is split into hmv UK & Ireland and hmv international.

HMV UK & Ireland operates from 250 stores, as at April 2008. Sales in HMV UK & Ireland for the full year ended April 2008 were £1,079.0 million (April 2007: £932.2 million) and operating profit was £41.4 million (April 2007: £24.3 million). Music represents 30% of HMV UK & Ireland sales, DVD 46% and games and technology 21% (other related products 3%) as at the full year ended April 2008.

HMV International operates from 129 stores and a total 566,000 sq ft, as at April 2008.  HMV is Canada’s market leading music retailer sales in HMV International for the full year ended April 2008 were £231.6 million (April 2007: £215.1 million) and operating profit was £8.5 million (April 2007 £13.4 million). HMV Canada’s largest product category is DVD at 47% of sales for the full year ended April 2008, with music 44%, games and technology 8% and others 2%.

HMV operates from six stores in Hong Kong and two stores in Singapore, over a total 58,500 sq ft.

HMV and Waterstone’s employed on average 11,200 full time employees for the year ended April 2006 (HMV UK & Ireland 5,000; HMV Asia Pacific 1,700; HMV Canada 1,300; Waterstone’s 3,200).

Internet Usage in the UK

Internet has become a key factor of life for over 60% of the population according to stats published in 2008.

Thanks to the internet almost anything we need is just a click away. Its become a daily task for people in this day and age to use the internet for business and pleasure, checking emails, online shopping, even internet banking have become 2nd nature to the majority of the population.

From the research i have carried out i find that the huge increase of UK internet users from 2000 to 2008 is largely to do with the introduction of broadband. The difference in download speeds compared to a regular dial up connection is phenomenal. Todays culture has become impatient to a certain extent, “must haves” have become “must have now” and broadband technology makes that possible. iTunes is a perfect example of this, albums and singles that could be ordered using internet would usually take a day minimum to arrive but now a few minutes and they’re yours.

Before researching this topic i thought that the percentage of users would be alot higher. Considering everything i have done for this blog, research, posting, typing, taking five mins her and there to talk to my friends in different countries and download a few songs, has all been done from my laptop sitting in my living room without so much as a cable being connected. Being at uni now and growing up with internet always being around i just assumed that everyone used the internet. It is a huge part of my life and according to internetworldstats.com it is a factor in 38,512,836 other peoples lives. The world revolves around the internet and the yearly increase of usage shown above and modern day technology suggests that in a few years there is potential that everyone in the UK will be using internet.