Business Processes in Practice: Make-to- Stock vs. Make-to-Order (Apple Case Study)

dell-vs-appleA good example of a company that uses the make-to- stock strategy is Apple Inc. Apple uses the make- to- stock process for Macs sold in its Apple stores. The company first estimates the consumer demand for its Mac computers. It then calculates its available  manufacturing capacity and the quantities of raw materials it will need to build enough computers to meet consumer demand. Apple’s strategy is to purchase raw materials and reserve manufacturing capacity ahead of time to maximize the cost efficiencies of buying materials in bulk quantities and doing large production runs. Apple and its contract manufacturers then produce a specific quantity of each Mac model and ship them from the factory to the Apple stores and other retail outlets for sale. When customers come into an Apple
store, they expect that the computer they want to buy will be there and that they can take it home immediately after purchasing it.

 

Because Apple uses a make-to-stock strategy, the company must pay extremely close attention to both its retail sales and the amount of finished goods inventory it has in stock in order to estimate its demand as accurately as possible. If Apple overestimates the demand for a particular product, the company will be stuck with a large inventory of very expensive finished goods that customers
don’t want to buy and that will decrease in value while they sit on the shelf. Conversely, if it underestimates the demand for a product, customers who want to purchase the computer will be told it is out of stock. They will then have two options: place a back order and wait until the store gets resupplied with inventory, or shop for the product at a different store. Either outcome will make consumers unhappy and could result in lost sales.

In contrast, one of Apple’s major competitors— Dell—employs a make-to-order production strategy. Dell was the first company in the industry to build computers only after they had received a fi rm order and thus knew exactly what product the customer wanted. Because Dell does not have many retail outlets like Apple (although it has recently tested some retail partnerships), the company
relies primarily on telephone and Internet sales channels for the majority of their sales. In contrast to Apple customers, then, when Dell customers place an order, they anticipate that they will have to wait a few days for the computer to be produced and delivered.
After the customer places an order, Dell typically assembles the computer from raw materials it has on hand and then ships it directly to the customer.
Unlike Apple, then, Dell does not need to be very concerned with estimating demand for its finished products because it knows exactly what customers want based on customer orders. However, Dell must be extremely careful in purchasing raw materials and managing its production capacity. Because its production runs are very small—sometimes one computer at a time—it must estimate its raw material needs and production scheduling based on an unknown customer demand.
If Dell mismanages its production planning process, it is especially susceptible to an oversupply or undersupply of raw materials and shortages or idleness in production capacity. If Dell does not have sufficient raw materials or production capacity, customers will have to wait much longer for their computers to be shipped.
Conversely, if the company has excessive raw materials or unused production capacity, it loses money.
Although Dell’s customers are accustomed to waiting a few days for their computers to arrive, they probably will be upset if their deliveries are delayed for several weeks due to a shortage of raw materials or a backlog of production orders. Alternatively, Dell’s profitability will suffer if its production lines are idle or its warehouses are filled with unused raw materials.
Both Apple and Dell have chosen a production strategy that maximizes their profitability. Apple believes that by controlling the entire buying experience through their Internet and physical stores, they can attract more customers. This strategic objective drives Apple to place a much higher emphasis on having products available in the store when a customer comes there to shop, which increases the likelihood that she or he will make a purchase. In addition, Apple realizes significant cost savings through large, planned production runs and close coordination with retail sales data generated by their online and physical stores. For all these reasons, the make-to-stock production process is probably the best strategy for both Apple and its customers.
In the case of Dell, the make-to-order production process fits well with the company’s rapid assembly and standardized products. Dell’s customers are comfortable ordering a computer that they have never seen because they know that Dell uses high-quality, industry-standard components. They also trust Dell to ship them a finished computer in just a few days, and they are willing to wait
for it to arrive rather than pick it up in a store.

In essence, the preferences and behaviors of each company’s customers determine, to a great extent, the production process for each company. Apple’s customers want to touch and experience the product in a retail store, whereas Dell’s customers are content to
buy something over the phone or the Internet. Each company has optimized its production process to match both its specific set of customer requirements and its internal profitability goals and cost structure.

Source: Adapted from Magal and Word Essentials of Business Processes and Information Systems. John Wiley & Sons, Inc. (2009).

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Three steps to address before optimizing for search engines

Before we get to incorporating keywords in your copy…

A search engine will never buy a product from your site. Only people will buy.

So while every page must address the priorities of search engines, the primary purpose of the text on every page is to help, engage, and sell to your visitors.
Keep that sense of priority in mind. Pages that are written with search engines as their primary audience do not work well with real people, and they convert very poorly.

Keeping in mind that our primary audience is prospective customers, here are three steps to address.

Step 1: Make your text helpful
A website is a hard place for people to find what they want. In a physical store, you can usually take in the whole place with a single glance. With a catalog, you can leaf through the pages from beginning to end. But on a website, you have dozens of pages linked together, you can see only one page at a time, and it’s much harder for people to find what they want.

Keep that in mind and write text that helps people find what they are looking for. Anticipate what kind of help your visitors want. Figure out what three or four things 80% of your visitors will be hoping for. Then make those three or four topics prominent on your homepage and write text to take visitors by the hand and walk them through a simple pathway of pages that culminate in the order page.

Step 2: Engage your visitors and help them to like you
If your visitors quickly come to like you, they will feel more comfortable. They will feel safer and will be more likely to buy – not just once, but many times. In your case, you already have a likeable subject…dogs.
So write in a style that will make vegetarian dog owners feel comfortable. Write to them in the same tone as you would speak to them over the kitchen table, sharing a cup of coffee together.

And don’t forget your great-grandfather! How wonderful to know that the roots of this vegetarian dog food business lie in the work of your family from three generations before. Do you see how well that ties in with the fundamental values of a vegetarian?
Write a whole section and use multiple pages to address the history of your business. Show your visitors how your values as a family and as a business tie in with their own beliefs and priorities.

Step 3: Make the sale
Once you have helped people find what they want, and made them feel comfortable about buying from you, now is the time to make the sale. Don’t be shy. When you get people to the sales page, you want to maximize conversion rates. Write copy that sells.
How do keywords figure into all of this?
Once you have your complete site figured out, and have outlined pages that are designed to attract, engage, reassure, and sell to your human audience, it’s time to optimize those pages for the major search engines.

Pages that are written with search engines as their primary audience do not work well with real people and convert very poorly.
Look through the subjects of the pages you plan to write, and use Wordtracker to find the best keywords for those pages. Make a note of the best keywords for each page. Pick a secondary keyword…and also make a note of related keywords.
Now comes the interesting part. Now we are going to set you apart from people who write their pages for search engines instead of for humans.
It isn’t hard to find keywords with Wordtracker. Mostly it’s a matter of putting in the hours. What is harder is to incorporate those words and phrases into a web page without compromising the message to your human audience.

How to use your keywords without spoiling your copy:
If you want the “secret” to incorporating great keywords into the flow of your content and copy, here it is: forget about the search engines.
I mean it.
This is where most people stumble in their efforts and produce second-rate text for their pages.
People think they are including the keywords for the benefit of the search engines. They are not.
Sound confusing? How can a search engine have a preference for a particular word or phrase?
So banish the search engine spiders and bots from your mind. These great keywords Wordtracker has found for you are valuable hints as to what and how your prospective visitors are thinking. They give you clues about what people want and the kind of language they are using.
Identify keywords that are frequently used by your prospects but are yet undiscovered and unused by your competitors.
Finally, it’s time to write.
Use the keywords as your guide to writing pages that meet the interests of thousands of prospects. When you include these words or phrases in your page titles, headlines, sub-heads and text, it’s not to “please” the search engines, but to say to each reader, “Yes,  you’re in the right place. This is where you’ll find what you’re looking for.”
In other words, with every step, you are writing the text to please, help, and serve your human readers.
You are writing pages that are intensely relevant to your prospects’ interests. And when you do that at every level, including the addition of those phrases people are using in their searches, the major search engines will reward you.
Why? Because, to serve the needs of the people who use them, search engines look for pages that are highly relevant to people’s searches.

In conclusion…
Simply use the keywords as part of the process of writing content and copy that helps, engages, and sells to your visitors.

Behind every search is a person.

The terms typed into search engines reveal a surprising amount about visitor intent. Know as much as you can about your potential customers, and use keywords that reveal intent to purchase your dog food products.
Step One: Understand Your Prospects
Start by considering your potential customers’ motivations and intent.
• What types of questions will they be asking?
• What are they trying to accomplish?
Use these questions to start a list of keywords to research.

Two Types of Buyers
Some of your buyers will be methodical and logical, asking a lot of “how” and “what” questions. How to have a healthier dog? How to improve my dog’s diet? How to have a vegetarian dog? What are the benefits to my dog? What are the ingredients? What is the highest-quality dog food?
Other prospects are more emotional and relational in their approach. Spontaneous and humanistic types are concerned with the experience and the results: best-tasting dog food, best-performing dog food, healthiest dog food, extending a dog’s life.

How To Think Like Your Prospect
Remember that a dog owner does not have to be a vegetarian to see the benefit of feeding their dog vegetarian dog food.
Other questions you can ask: Why are they vegetarian? Is it primarily health? Is it primarily cultural, love of animals, spiritual? Where are they at in the buying process?

Step Two: Think Broad and Wide
Take your list to the Wordtracker Keyword Universe. Use it as a starting point to research specific terms, and also use the thesaurus feature. Gather a few broader terms around “vegetarian dog food.” Make sure that they are specific enough to match your business.
On the Web, traffic costs, so think quality keywords, not quantity. Now you can start adding terms that match most closely with your visitors’ intent in relation to what you sell.

Step Three: Prioritize for Conversion

Prioritize the keywords not just on the amount of traffic potential, but by clear intent. You must also take into account the ability of your product to present the value that will convert this traffic. It is okay to add terms with very little traffic potential if they have a high probability of converting.
These are the terms you will not only want to optimize your pages for, but terms that you will want to be present in your content. If you want a bigger bang, then you will also want to use these keywords in your anchor text.

They asked and you had their answers; that’s how to convert.

Why Keywords Matter

People describe things in different ways. The words you use in your business may be very different from the
words your customers use. For example, Gerry McGovern explains, “low fares” is an airline industry term (121
searches predicted at time of writing); “cheap flights” is a term potential customers will use (8,057 searches
predicted per day). Use industry terms instead of customer terms and you will not be found. These three cartoons
show what happens:

search

The message is clear. If you’re not getting enough search engine traffic to your site, you’re not using the words your customers use.

Build Keyword Rich Inbound Links

To rank well in search engine results you need to score well on both ‘on the page’ and ‘off the page’ factors. On the page factors are about what is on your own pages and therefore within your own control: off the page factors are the links from external websites to your own and these are much more difficult to control.
Most external links will use your domain to link to you, but if you can persuade them to link to you using keyword rich linking text (sometimes called anchor text), then you’ll get a significant search engine boost.

So while AbeBooks.com would be pleased with a link like http://www.abebooks.com, they would be even more pleased with a link like used books from AbeBooks because the linking text contains one of their important keywords, ‘used books’.
For many website managers and owners getting an external link of any kind is achievement enough, without having to manage the even more difficult task of persuading an external website to link to you using specific keyword phrases of your choice.

So how do you get keyword rich inbound links?

if you can persuade external sites to link to you using keyword rich linking text then you’ll get a significant search engine boost.

In an earlier section, we showed you how to choose product and publication names to get such links: and there are other methods that if you persist will bring you many valuable links.
But before we list them, you need to do some preparation:
• Start by choosing 5-10 of your most popular keywords that you’re going to use in your initial link building campaign.
• Now write variations of the links that you’d like to use. For example to create the link used books from AdeBooks, I’d write the following html:
<a href=”http://www.adebooks.com/”>used books from AdeBooks</a>
You’ll want to create a variety of inbound links using different variations of linking text.
There are simple steps you can take to start getting keyword rich links. They include:
(i) Simply show people how you’d like them to link to you.
Write the html, make it available and ask people just to copy and paste the code into their own web pages.
(ii) Buy directory links or text ad that allow you to specify the linking text.
(iii) Build contacts and relationships within your industry. Be generous in linking to useful external resources and you’ll find that the people you link to take notice and your generosity will often be rewarded with links back to your own site. If you’ve built a good relationship, people will be glad to use the linking text you suggest.
(iv) Write newsworthy press releases and use services such as www.prweb.com to distribute them. For a small additional fee they will allow you to embed links into the body of your press release.
(v) Write and publish quality articles and blog posts on your own site.
Make sure that you include important keywords in the titles of each article or post. People will generally use those titles when they link to you.
(vi) Quality news and information sites in your industry will often accept well-written articles for publication. When they do, they’ll normally publish a signature box describing what you do and linking to your site in whatever way you specify.

Using keywords in website copywriting

So you’ve done all your keyword research and you’ve found the best keywords for your website. How do you use these keywords to improve your website copywriting so that you rank well on the search engines and attract the type of customers that you are after?

Example of good website copywriting
Well, let’s start with an example of a well-written and highly ranked website in a competitive sector – digital cameras. I’ll go to Google and do a search, say for “digital camera”: at the time of writing, here are the results:

digitalcamera

See how the titles of the top organic searches all include the search term ‘digital camera’. The words that appear in the title are completely within your control: the title tag is the most important place to put your primary keyword.
So the top organic result comes from http://www.amazon.com who have succeeded against 63 million competing pages – a great performance. So what can we learn by following the link?

Let’s have a look:

digitalcamera2
Look at how the keyword ‘digital camera’ has been used in the title, the heading, linking text and the body copy.
This is a well optimized page. But have a closer look at the title in the next diagram – it contains another important keyword, ‘camera and photo’.
This keyword is also used well in the website copy.
So how does this page perform for the search ‘camera and photo’?
Does the page rank as well as it did for ‘digital camera’?
Here are the results from Google:

cameraphoto
Top again with over 24 million competing web pages. A very nice piece of work and one you should try to emulate. The person writing this copy really knew what they were doing.

Using keywords in your web copy 

Here are the steps I’ll go through to create a piece of optimized web copy.
1. From the keyword lists you have chosen for your site, pick a primary and a secondary keyword that you’ll want to rank well for with the article.
2. Write the title of the article making sure that you include the primary keyword in the title. You can also try to fit in the secondary phrase but if you find it hard to do so and still maintain good English, then don’t worry about the secondary keyword in your title. I try and keep the title to around 50 characters in length.
3. Write the description tag using both the primary and secondary keywords. This should describe what the article is about and should be around 200-250 characters long.
4. Write the first paragraph which should be a summary of the overall article and should include both primary and secondary keywords.
If you’re not sure about how to do this, have a look at my first paragraph here or study good newspaper writing. You’ll find that journalists tend to summarize the story in the very first paragraph.

Get writing, get publishing, measure what happens – and then do it even better next time.

Choosing your best keywords

In the previous lesson, The Keyword Matrix, we developed two spreadsheets for chocolate and related terms, one of 85 search terms using the free trial and one of over 5000 terms using the full version.
The spreadsheets gave a prediction of the daily searches for each term:
The ‘predict’ figure is the first metric you should look at. High scoring keywords will be the most popular words in your marketplace – the words people use when they’re searching for your products – so ‘gifts’ for a luxury chocolate site, ‘cheap flights’ for a travel site.
But of course there is a problem. Because the keywords are so popular, lots of sites will use them. You will face a lot of competition and much of that competition will be good at search engine optimization.
An experienced SEO will welcome this challenge and will apply skill and hard work over a number of months to compete effectively. But a novice SEO will find it virtually impossible to compete for these highly popular keywords. What then should the novice do?

Strategies for a novice SEO 

search2I think there are three strategies you should follow:
1. Include the most popular keywords in your website copy, even though you may not rank well for them. Your customers will expect to see these keywords, and search engines will take note of them. By including them, you lay a foundation for the long term: slowly but surely as you add more content, your rankings will rise.
2. Use the most popular keywords along with ‘qualifiers’, either geographic or sector specific. So while it might be difficult to rank well for ‘chocolate gifts’, it is not such a challenge to rank well for ‘chocolate gifts Buffalo’ targeting a geographic area or ‘corporate chocolate gifts’ targeting the business sector.
3. Look for niche keywords or markets that others haven’t yet found. Such keywords have the magic combination of being relatively popular searches, but having little competition.

Slowly but surely as you add more content, your rankings will rise.

Here’s what each of these terms mean:
• Searches is the number of times the exact keyword appears in our sample of people’s searches.
• Predict is the number of times over a 24-hour period that we estimate the exact keyword will be searched for over all engines.
• Google is the number of results that Google will return for the exact search term in quotation marks (you can also choose other search engines).
• Google KEI (Keyword Effectiveness Index) is a calculation of the “effectiveness” of each keyword, taking into account the predicted
searches and the number of competing pages.

1. Include the most popular keywords in your website copy.
This means including the keywords that have a high ‘predict’ figure into your keyword strategy.
2. Use the most popular keywords along with ‘qualifiers’. Look at the Google competition figure. If this is too high, add a qualifier to the keyword. So, instead of optimizing for ‘chocolate gifts’, optimize for ‘chocolate gifts Buffalo’.
3. Look for niche keywords or markets that others haven’t yet found. Pay close attention to the Google KEI column.
As with all things in search engine optimization you have to use a mixture of solid data AND human intelligence. Keyword research is not a simple oneoff task. You will achieve much more if you investigate the tools, think about what they tell you about people, and develop your own ideas and methodologies.

A final tip to expand your keyword list 

If you optimize well for a phrase such as “chocolate gifts”, you may also pick up traffic from people who are doing the longer search ‘corporate chocolate gifts’. So having an idea of these longer phrases can help you estimate your overall market.
Wordtracker reports on exact search terms only, so keywords such as “corporate chocolate gifts” do not influence the count for “chocolate gifts”.

Now you’ll have gathered and prioritized many relevant keywords. We’ll explore how you can use these keywords in your website copywriting so that you attract much more of the traffic you want.