Q.11 Using your chosen e-commerce company, analyse their strategy for management of the upstream and downstream supply chain.
Concepts that should be included are as follows:

• Push vs pull supply models
• Vertical integration vs disintegration vs virtual integration
• Partnership management and value networks
• Procurement and fulfilment strategies

Within the website I have chosen, www.aeropostale.com, I have found push and pull factors that they use to manage their upstream and downstream supply chain. Companies will use push factors such as the following to push the products into the customers hands. This is all about customer demand for products therefore Aeropostale must respond to what they think the customer will want. To do this they use images which will attract a certain age group to their website especially young people. The images show mainly attractive models wearing the Aeropostale clothing which will attract people to want to look like them therefore they will buy the products to look like them. Another way they can push the product into the customers hands is through their use of the wish list which is available to the customers when they are looking through the products. This will give the company an idea of the types of products customers are looking for and if the product is unavailable they can quickly update this and inform customers through sending out emails with advertising techniques of the type of clothing they were looking for without having to be in direct communication with the customer.

They can use pull factors by following the steps of the customer moving through their website and seeing what they are interested in. One form Aeropostale have one their website of doing this is by including a wish list for each product. This will give the company an idea of what each customer is interested in if they use this link. They will also be able to see what they like by picking up details of other purchases they have carried out.

Vertical integration describes a style of management control. Vertically integrated companies are united through a hierarchy with a common owner. Usually each member of the hierarchy produces a different product or service, and the products combine to satisfy a common need. It is contrasted with horizontal integration. Vertical integration is one method of avoiding the hold-up problem. Aeropostale is a fashion retailer that would not consider themselves as a vertical integrated company.

I would consider Aeropostale as a vertical disintegrated business as they have various stages for their production and distribution of their products to the production of their products. Aeropostale also have their clothing made in Europe, Asia and Central Americain countries in factories where other clothing for other companies are also made.

Aeropostale would be considered a value network as they produce various types of clothing at decent prices which makes it attractive to younger people and the clothing is of high quality and attractive for most age groups. As the clothing is made in low costing countries Aeropostale will make a high profit as manufaturing and production costs will be kept low and they will be selling the products at a high price in order to make profit. Aeropostale have joined with GSI Commerce Inc., a leadering provider of e-commerce and multichannel solutions to provide Aeropostale with a full-service, integrated solution, including e-commerce technology, order management, customer care and fulfillment, and interactive marketing services through GSI’s marketing services division, gsi interactive.

Aéropostale provides customers with a focused selection of high-quality, active-oriented, fashion and fashion basic merchandise at compelling values. They also own Jimmy’Z which provides customers with a broad selection of California lifestyle-oriented merchandise, targeting trend-aware young men and women. They maintain control over their proprietary brands by designing and sourcing all of their merchandise. Their Aéropostale products are sold only at their stores and online through their e-commerce website, www.aeropostale.com , while Jimmy’Z products are sold only at their Jimmy’Z stores.

A third party provides fulfillment services for their e-commerce business, including warehousing their inventory and fulfilling their customers’ sales orders. They purchase, manage and own the inventory sold through their website and their recognize revenue from the sale of these products when the customer receives the merchandise.