case report

2272 Words Jul 15th, 2018 10 Pages
Situational Analysis
Overview
     Egghead Software is in its twenty-first year of existence, beginning as a retailer for computer software products. Realizing the booming growth of e-commerce, it moved its business to the internet, transforming to Egghead.com in 1998. Egghead.com’s focus is on selling refurbished computer hardware and software, as well as new products to small and medium sized businesses. Egghead's competitive advantage is the choice it allows for consumers to purchase computer products at a flat price, or in an online auction. In 1999, Egghead.com realized over $5 000 000 (U.S.) in year-end sales. The current issue that Egghead management is facing is how to deal with customer backlash, and
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‚     The increasing competition from other companies is a threat for Egghead.com. Now new customers will be hesitant to use the internet to buy its products due to this security problem. Rival companies will jump in to gain more clients and to annex a larger share of the market.
‚     The limitation of the internet. This is a threat for Egghead.com since many small or middle businesses in third world countries do not have the resources or do not use the internet for daily operations and, thus, reduces the potential customer base for the future.
Problem Identification
     The critical decision that Egghead is presented with is in how to deal with customer backlash, and re-establish trust and a sense of security among Egghead customers. The most significant cause of the problem faced is arrogance on Egghead's part. They believed that their site would not fall victim to the attack of a hacker. Another cause of the problem at hand is competitive pricing wars. Egghead did not want to increase expenses on security in order to price-compete with competitors. Lastly, over-growth of the company may have caused this breach of security. The company became too large to be able to deal with security effectively. The problem at focus is crucial to Egghead because they may loose a large portion of their customer base if this

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