Internet Marketing
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Sandvik – setting the internet revenue contribution
1- Use of the internet in this case has lead to huge improvements in links with as the name says is a company that makes cutting tools, specialty steel and mining and construction equipments. Its annual IT budget is Skr 1 bn. They have formulated their IT strategy in 1969 but it was recently that the IT moved from serving the company to benefiting customers. Transferring its 30 year old IT experience to the age of the web requires more than an understanding of the technology; because one of the major challenges would be “soft things” or to getting people to understand and accept that this is part of their daily work. In addition Sandvik steel try to find solutions for its customers and its extranet enables users to obtain worldwide stock information, catalogues and training aids, as well as take part in online discussions. All Sandvik steel, e-business activities are mainly directed toward enhancing links with customers. Customer value comes when their product is used, not when its purchased. Therefore they not only allow customers to buy tools over the web but also to design their own products, within parameters set by the company, and receive advice on how best to use them.
Sandviks e-business strategy had to take account of the fact that choosing the right cutting tools and using them effectively can save around 10% of the total cost of manufactured components.
It also had to avoid channel conflict, the bypassing of its traditional sales outlets. They do not want to bypass traditional channels and lose sales and customer relationships in the process. It is the relationship with the customer including greater personalization and an extended reach into global links which will be the most important pillar of its e-business strategy in the long-term.
To Sandvik it is what provides real competitive advantage. Shifting existing