Executive Summary

1 Introduction

2 Description of the Creative Kitchen’s business model

3 System Components
3.1 Resources
3.1.1 Architecture and related costs
3.1.2 Infrastructure
3.2 The Creative Kitchen as a system

4 Creative Kitchen – a virtual community supported by CRM
4.1 Key Success Factors

5 Scalability and sustainability of the Creative Kitchen
5.1 Profitability
5.2 Differentiation from Competitors
5.3 Competitive advantage

6. Customer data collected on the website

7. Outsourcing of the CRM functions

8. CRM cooperation with the business partners
8.1 Centralized contact center
8.2 Coordinated campaign management

9. Partner Relationship management

10. Internal knowledge management and decision support systems

11. Considerations

12. Conclusion

Appendix A
System requirements
Appendix B
Channel of communication with customers
Appendix C



Figure 5.1: First steps to build long-term customer relationships

Figure 8.1: CRM operations between the Creative Kitchen and its partners


Table 6.1 Data collection and leveraging

Table 8.1: CRM operations and benefits

Executive Summary

The present report looks closer at the eBusiness model, the Creative Kitchen, which was developed in a previous assignment in the subject HGM 554 eBusiness Design for Competitive Advantage. The Creative Kitchen is a virtual community targeted at people that are interested in cooking and meeting others with the same interest. The aim of the business model is to facilitate personal atmosphere and to build up contacts among the community members. The Creative Kitchen is an interactive website that constantly collects information about its users to answer their individual needs and wants. Partnerships with six cooking schools in Germany, with sellers of kitchen accessories and utensils and with the online bookshop “amazon.de” are formed.

The main aim of this report is to focus on a specific business function within the business model. The Customer Relationship Management (CRM) side of the business model is looked upon in detail. The main reason for choosing to focus on CRM is the growing importance for a business to be able to handle the large amount of information and data it has access to and can create in today’s society (Bergeron, 2002).

The focus on CRM include looking at what kind of information that needs to be collected from the customer, how it is collected and what it is going to be used for. The collected data are; user recognition data, demographic customer data, site traffic and usage, purchasing behaviour, customer feedback and informational needs. Further the report describes the needed CRM operations and the benefits created for customer, partners and for Creative Kitchen itself. This includes multi channel contact centre, e-mail response management and coordinated campaign management.

The report concludes with underpinning that the technological applications are simply the mean to generate strong relationships for mutual benefit between customers and the networked business of the Creative Kitchen. However, by understanding both the limitations and advantages of implementing a CRM system, it can help Creative Kitchen to become a sustainable business for the future .

1 Introduction

This report is initiated to develop an eBusiness model design for a selected business function. Based on the Creative Kitchen, a virtual community for cooking lovers, the focus shifts toward the implementation of customer relationship management (CRM). The CRM market is predicted to grow from $8 billion in 1999 to more than $24 billion by 2003 (Dyché 2002). In comparison to the traditional product orientation with its major concern to sell as many products and services as possible, the integration of CRM requires a customer-centric business philosophy. Although today’s worldwide companies are declaring themselves to be customer-focused and support this statement by investing millions of dollars in CRM-related technologies, they often neglect that there is more than just buying the right technology. CRM is not only about technological applications, but also about the creation of strong relationships that increase customer value and motivate customers to remain loyal to the business (Dyché 2002). The Creative Kitchen is a virtual community that integrates customer information with business action and views CRM as a coherent business strategy embedded in the culture and way-of thinking of the business.

The focus on CRM was chosen because of the growing importance of being able to handle the large amount of information and data that an eBusiness company has access to and can create in today’s society (Bergeron, 2002). To be able to handle this information in such a manner that it becomes a competitive advantage for the business is one of the key focus points for the Creative Kitchen. By collecting information and utilising it to it’s fully potential it can help a company to become better at offering the right product or service to the right customer at the right time and price, via the right contact point (Kalakota and Robinson, 2001). Since the Creative Kitchen is a “click-only” business, the strategic assets of the company mainly lie in how they are able to build and maintain relationships externally and internally. By successfully understanding and implementing CRM, the Creative Kitchen can become a competitive and sustainable business for the future.

2 Description of the Creative Kitchen’s business model

The Creative Kitchen is an interactive web site for all people who love cooking and who are keen to learn more about it. The web site is designed to provide a virtual meeting space for people with similar cooking interests to form a community. Like any other virtual community, the Creative Kitchen creates value in several ways (Turban, McLean & Wetherbe 2002). Members input useful information to the community in the form of comments, feedback and information needs, thus creating value. This input is retrieved and accessible to be used by other members of the community and by the Creative Kitchen and its marketers. Since the Creative Kitchen community is made up of like-minded individuals, opportunities exist for business transactions, exchanging and collecting information on both the groups attitudes and beliefs as well as on their interactions and interaction dynamics (Turban 2002). The Creative Kitchen then absorbs and utilizes this important customer information to provide up-to-date cooking trends, tips and recipes. To offer expert knowledge about cooking, international specialities, and healthy nutrition, the Creative Kitchen cooperates with six German cooking schools, with sellers of kitchen accessories and utensils (Fissler, Alessi and Zwilling) and with the online bookshop “amazon.de”. Thus, members of the Creative Kitchen are enabled to easily take advantage of the unique opportunity to perfectionize their cooking skills (Aronson 2002).

3 System Components

Information about the system requirements, channel of communication, and promotion can be found in the appendices (appendix a, b and c).

3.1 Resources

To perform the activities that underpin customer value, the Creative Kitchen relies on three resources classified into three categories: tangible, intangible and human (Afuah & Tucci 2001). The Creative Kitchen’s tangible resources are its Internet connectivity, its network equipment including the CRM applications, desktop computer and cash reserves; its intangible resources include the reputation and relationships established with customers, partners and suppliers; and the human resources are the employees’ skills and knowledge.

3.1.1 Architecture and related costs

The architecture of the Creative Kitchen is designed to combine the business objective with technology to operate cost effectively and efficiently (Turban, McLean & Wetherbe 2002). The cost drivers for the Creative Kitchen and its architectural design are identified as hardware, software, network, data, procedures, and personnel costs. Hardware costs include the server cost, network devices, and communication lines. Software costs mainly incur from the installation and maintenance of an e-commerce software package build in the operating system. Services costs arise from outsourcing the hosting of the web site to an application service provider (ASP), from outsourcing the CRM functions, as well as from general costs for the Internet access and domain name registration. Personnel costs include the hiring of a service administrator, salaries, and the training/retraining of the Creative Kitchen’s management team.

3.1.2 Infrastructure

The infrastructure of the Creative Kitchen is designed with open standards to provide common connectivity that also allows for the expansion to include new members. To become a successful online community web site that directly connects with end users, customer data storage, customer interface (front end), transaction process and integration with back end systems, as well as security systems have all been established and connected to build one common system. To attract more cooking lovers to become members of the Creative Kitchen community, the web site is designed to be easy to navigate and fast to download. Besides, to encourage members and visitors to ask questions, to share their experiences, opinions and views, the site is culturally sensitive, operates under simple rules and is easy to access. This information is then transformed into tacit knowledge by the processes installed from the Creative Kitchen.

3.2 The Creative Kitchen as a system

Systems theory helps to look at the Creative Kitchen from a broader perspective. Systems theory offers a new perspective to interpret patterns and events in the organization by considering every part but then connecting all together (Senge 1992). The interrelations of the parts, e.g. the coordination of the supplier interfaces with the Creative Kitchen interface are crucial for the success of the business. Both might perform well on their own, but the challenge lies in connecting and combining the separate parts together. Although the focus of this paper is restricted on one business function, it is assumed that this aspect can be easily and favourably integrated in the various other functions of the Creative Kitchen.

4 Creative Kitchen – a virtual community supported by CRM

By definition, virtual communities consist of individuals bound by a similar interests or goals whose individual knowledge and experience provide the building blocks of innovation. The key challenge for the Creative Kitchen is therefore to harness that knowledge and experience and transform it into products, processes and services that add value for the end users, thus using the reverse value chain. Turban (2002) identified three critical success factors for the Creative Kitchen community:

(1) Defining a process for interaction and collaboration
(2) Providing the technology to support the interaction process
(3) Stimulating and promoting strong people relationships



ISBN (eBook)
File size
516 KB
Catalog Number
Institution / College
Swinburne University of Technology, Melbourne – MBA
CRM eBusiness model learning organisation reverse value chain



Title: The Creative Kitchen