Case Study Plaisio Computers

Overview

Plaisio Computers SA was founded in 1969. At the time the company had one retail outlet in
Athens where it was selling office supplies. In 1986 Plaisio Computers opened a new specialized
store where it was selling computers, mainly TURBO-X. In 1996 Plaisio began selling its products
through catalogues. Orders could be placed by phone, fax, and mail. The main target group for the
catalogues was, and still is, business customers.

In 1999 Plaisio Computers SA enters the Stock Market. The same year the company creates its
first online store (www.plaisio.gr) providing this way to its customers an alternative way to place
orders. This was the first attempt of the company to enter the ecommerce business and it was
mainly addressed to consumers. In 2001 two new online stores are presented. The first one is
plaisio2b.gr, which targets business customers. The other one is plaisiowap.gr, which enables
customers to place their orders through their mobile phone.

Currently, the company specializes in assembling and selling PC systems, software, computer
peripherals accessories, office supplies, Mobile Phones, and special products like drawing
equipment. It has 655 full-time employees and 16 physical stores, 12 of which in Athens. Plaisio
SA owns all 16 stores and has no plans of using franchising because of the very low profit margins
in the industry. Additionally the company owns 2 Logistics centers and the building of the
Headquarters.

In 2003, Plaisio Computers S.A. realized profits amounting to 14.6 million compared to 9.0 million
Euros in 2002, representing an increase of 61.8%. Sales amounted to 181.9 million compared to
145.5 million in 2002, representing an increase of 25%. Earnings before Taxes, Interest and
Depreciations (EBITDA) amounted to 19.2 million compared to 13.7 million for 2002,
representing an increase of 40%. The increase in sales is due to a significant increase in the
Company's market share. It also be noted that returns on equity amounted to 28.13% for 2003
compared to 21.77% for 2002.

Plaisio Computers S.A. ranked among the 500 fastest growing companies in the EU, for the 4th
consecutive year ("Europe's Top 500 Job Creating Entrepreneurs").

During the period 1997-2002, Plaisio Computers S.A. achieved growth rates in the order of 184%
in terms of new job creation, as the number of its associates grew from 190 in 1997 to 540 in 2002.
The Company's turnover also showed an impressive increase of 630% within that specific period.
At the same time, the Company was also awarded the first prize for "Best Share Performance".
This special distinction was based on the data of a European-wide survey carried out by the Boston
Consulting group on behalf of the European Organization Growth plus.
Within the Greek domain, the Company's successful course was awarded the first prizes for the
"High Growth Rate" and "Best FTSE Small CAP 80 Company" categories, on November 25th in
a special ceremony during the International Investors Euromoney Conference. Also, it was
awarded the "Best Chain of the Year 2003" category of the Mobile and Telecom awards.

Plaisio Computers: A Greek E-Commerce Success Story

Plaisio Computers SA operates within the New Economy, specializing in Information Technology
market, Office equipment and Telecommunications. Its operation is focused in tailor-made built-
to-order computers and retail of a variety of software and hardware products, mobile and
conventional phones and office automation and equipment. Plaisio Computers SA possesses a
leading position in direct sales in the two out of the three sectors mentioned above, being the
Information Technology and Office equipment, while in Telecommunications sector the growth is
very significant.

Plaisio Computers SA operates through a unique multi-channel delivery system offering more than
15.000 products (Information Technology systems, Telecoms, Office Automation and Equipment)
ready for delivery in a percentage higher than 96%. It is a well-organized sales net that directly
covers the needs of the modern consumers, through three major channels:

• Brick and Mortar Channel (16 stores and a special department for large enterprises and
organizations)
Every day, more than 10.000 visitors, visit Plaisio stores. The previous year more than 3.000.000
consumers chose Plaisio Computers SA to be informed of the latest products in the market and
more than 1.500.000 trust the company with their purchases.

• Catalogue Channel (Sales through paper catalogues)

The second distribution channel of the whole sales net is sales through catalogues. This is a major
differentiation of the company from its competitors. The company issues analytical catalogues by
product category and delivers it through the newspapers network and its stores. With a total of 60
catalogues issued in more than 7.000.000 copies, Plaisio Computers SA promotes all its product
categories.

• E-Commerce Channel (www.plaisio.gr , www.plaisiowap.gr , www.plaisio2b.gr)

Plaisio Computers SA being a pioneer commenced in May 1999 the E-Commerce sales channel
in www.plaisio.gr in a time when the Internet penetration in Greek market was rather minor. The
owner and CEO of Plaisio Computers SA had the idea of the online shop and took the whole
initiative. Along with the company’s marketing manager, they decided to enter the new market
primarily targeting the consumer market. The decision process was quite informal and very quick.
After a few discussions and by taking into consideration that the company financially was in a
very good position, the decision was easily made. This movement was totally aligned with the
company’s strategy, which is to be the leader in the market, and provide every new option which
becomes available to its customers.
The development and hosting of the Plaisio.gr Wap Site was fully undertaken by the company
itself. They provided all the necessary equipment, and hired the necessary employees.
Additionally, there was some external help from consultants. Everything was built in-house and
everything is still being handled the same way. The development of the initial Wap Site lasted
about six months.

Plaisio Computers SA currently possesses a significant experience in this area. The Company has
succeeded to achieve managing of orders received through the Internet, with its the effective
logistics systems that has been restructured and operating since 1998. The Company's E-Shop has
completed 2 years of successful operation having:

• Over 11.500 on average visits per day

• 32.000 registered members
• Over 11.000 orders
• Turnover of 2.500.000 million Euros (from commencement)

The main advantage of the E-Shop is the way that it facilitates the user to browse an electronic
catalog, select from a large variety of products and have his order delivered wherever he wishes
within 24 hours, avoiding waste of time and transportation difficulty.

The B2B market makes the majority of its sales and profits. There are about 700 B2B customers
that are actively and on a daily basis using the site Plaisio2B.gr. According to the company its
competitive advantage lies in the customer service and after sales support. They want their
customers to trust them and view them as their partners rather than their suppliers. Furthermore,
Plaisio Computers SA tries to offer the greatest product variety in the best prices (they want their
prices to be at least as low as their competitors’) with the best customer service and the best service
quality. Plaisio Computers SA believe that they do offer all those they wish to and that they are far
ahead of the competition.

In November 2003, Plaisio Computers S.A. opened their redesigned and upgraded digital store,
www.plaisio.gr, where visitors are able to:
• Compare, on the spot, the specifications and prices of the products they are interested in.
• Assemble on-line a tailor-made PC, matching different parts, technical specifications and prices
and at the same time calculate the final cost and installments scheme.
• Access the investor’s area to read any information relating to the company's transparency and
communication policy with investors.

In addition, on-line customers can obtain updated information regarding:

• Their new help tool with the 37 most frequently asked questions (FAQs) and answers.
• A complete presentation of their stores, catalogues, services and special B2B department.

Last, but not least, the radically renewed site also provides clients with the ability:
• To keep up to date with their shopping basket, the products they have selected and their total
cost.
• To calculate, indicatively, the cost of delivery to customers in areas outside the Plaisio
distribution network.
• To access personalized services, by examining their past and present orders online.
Plaisio Computers SA has also commenced operating in wap site market, providing complete
solutions in m-commerce. The Company having the long experience of the Internet market has
easily adapted to the needs of the wap site market strengthening the presence of Plaisio Computers
SA in the E-Commerce high-growth market. It’s quite interesting that the company launched a
wap site, even though they knew all along that this could not be used by many customers and that
there was a great chance of this technology to become obsolete shortly.

All electronic orders are initially sent to a central database. A specific employee collects them
every 30 minutes and enters them in the central system. Apparently, there is no integration yet
between the wap Site System and the company’s ERP (SAP) and Data Warehouse System,
therefore the online catalogue does not represent the actual products available. Every order is
verified by a phone call. An employee calls the customer and verifies that all information in the
order is correct. This is the case because many of the orders that the company receives have
mistakes and/or omissions.

The B2B case in entirely different in terms of the order processing. The corporate customer logs
in directly to the company's ERP system, as if he was a Plaisio's Sales Representative. This gives
him enhanced convenience and versatility, since he is able to see all available information of his
account and have access to the Plaisio resources, such as stock available.
The Chairman and Managing Director of the company, Mr.George Gerardos quoted: "Our success
is due to the innovative for Greek standards multi-channel distribution and service organization:
this multiform and flexible mechanism relies on sales through stores, marketing 18.000 different
products purchased by 7.000 clients on a daily basis; 60 updated editions of product catalogues,
printed in 7.000.000 copies; the personalized services provided through our call centre, which
receives 10.000 calls daily and our e-shop, which receives 11.500 visits daily; the services we
provide through 13 technical support centers to 600 customers daily; and our
B2B department, servicing over 100.000 active corporate clients".

Thanks to its multi-channel distribution system, Plaisio Computers S.A. has succeeded in
combining systematically a high growth company profile (increase in sales 20 times over an 8 year
period, from 1995) with that of a market leader in the direct sales of PCs and office supplies sector,
with zero outstanding loans
Question.1
Which of the following is NOT a benefit of E-Commerce to Plaisio’s customers?
A. Anytime, anywhere product catalog and shopping?
B. More and cheaper products provision
C. Quick product comparison

Question.2
Which of the following E-Commerce models is best applied in the case of Plaisio computers?
A. Mobile Commerce
B. Business-to-Consumer
C. Business-to-Business

Question.3
Which of the following features is neither supported in the company’s Online Catalog
(www.plaisio.gr) or Paper Catalog?
A. Updated Product Information and Pricing
B. Product Availability for Purchase
C. Search and Comparison Facilities

Question.4
Which of the following phases of the customer service in E-Commerce is less evident in our
case?
A. Phase 1 Requirements
B. Phase 2 Acquisition
C. Phase 3 Ownership