Scenario 2 see the file in completed criteria Essay Example

Electronic Commerce

Seasons outfitters is a leading clothing retailer that has been operating in four different continents, with over 200 shopping outlets, and operations in across 35 countries. The company is headquartered in Prague, Czech Republic, and this is also where the company’s strategies are initiated. The company sells various items through its branches and some of their products include; tops, shorts, trousers, caps, and shoes among others. These products are sold directly to the customers through traditional brick and mortar stores whereby clients may pay directly either by cheque, cash or credit/debit cards.

However, with the increasing business competition coupled with global financial crisis, the company needs to expand to other continents so that they may increase on their sales and profit margin while reducing unnecessary expenses. The entire process of obtaining business permits, acquiring store leases, recruiting staff and other expenses associated with opening new offices is very expensive for the organization and the company itself has been forced to devise ways that could enable it to compete globally. Some of the ways that an organization such as seasons outfitters may venture into a foreign country include; direct venturing, strategic partnership and franchising. Direct venturing even though risky and expensive is preferred due to its higher profit margins and because establishing brick and mortar stores are very expensive, the company has decided to go the electronic commerce way.

Electronic commerce is basically any form of business transaction whereby parties interact electronically over the internet rather than the physical exchange (DTED, 2010).

With ecommerce, the company will only need to establish regional offices that will deal with issues such as logistic supervision from the company’s warehouses. This is so because the products will be ordered online and delivered to the customers addresses. This does not require any brick and mortar store to be set up but rather require ecommerce applications which are deployed and controlled from the headquarters, which will enable client to make orders. We also require a huge warehouse to stock merchandise, and a world class logistical system that will assist to deliver items to client’s location. This logistical system may be deployed in collaboration with one of the leading logistics company.

Benefits of Electronic Commerce to Seasons outfitters

When the company decides to venture into electronic commerce this means that some of the company’s operational activities will be conducted online through computer technologies and the internet. There are numerous benefits that come along with such an initiative (Wilcocks & Plants, 2000).

To begin with, the internet is vast with huge audience that consists of approximately two billion of the global population out of a possible seven billion hence representing a penetration rate of 28% (Internet world Stats, 2011). Asia has the largest number of internet users, even though the highest number of penetration rate comes from; North America (77.4%), followed by Australia (61.3%), Europe (58.4%), and Asia (21.5%).

This clearly shows that there is the market because the audience is already there regardless of the region whereby according to the Nielsen group (2011), over 84% of the global internet users have already shopped online.

Scenario 2 see the file in completed criteria

Fig 1.0 depicting internet users by regions. Internet world stats- http://www.internetworldstats.com/stats.htm Basis: 1,966,514,816 internet users on June 30, 2010 Copyright ©2010, Miniwatts Marketing Group

With electronic commerce it will be easier to market the company’s products across the globe. This is so because we can employ cost effective marketing concepts such as pay per click, affiliates, referral links, and e-mail campaigns. This will enable us to deliver digital catalogues of our products at a fraction rate that it would have normally cost us through hard copy printing technology (Fergusson, 1999).

Other benefits are improved customer relation and service, enhanced inventory control, minimal marketing and distribution costs, reduced cycle time, increased market reach and minimized costs of operations (Salnoske, 1997).

There are technological benefits as well whereby these involve automated processes that are embedded into electronic commerce related applications which in the end will directly impact on time and costs. With technology, the manual processes will be automated hence improving on administrative costs while reducing errors.

There are operational benefits which are mainly concerned with the quality of information flow, this is basically the timeliness, accuracy, and correctness. These benefits will directly contribute towards increased efficiency. Some of the notable impacts with operational benefits are improved cycle time, timely marketing, minimized operation costs, and enhanced inventory control management.

There are also relationship related benefits which include improved customer service, reputation and enhanced trust between trading partners.

In this particular research we are going to examine three key elements in e-commerce from a business perspective by focusing on the benefits, challenges and factors that would drive up success in each area. This particular research also involved survey from top 1000 Australia companies whereby the companies were chosen at random and they ranged from various service industries.

The benefits of e-commerce are either tangible or intangible.

Tangible Benefits

  • Acquiring Niche market Minimizing costs of operations Retaining and expanding the customer base Transforming the existing market chain Enhanced automation of processes Business efficiency

Intangible Benefits

  • Convenient Shopping Maintaining competitive advantage Customer Loyalty

Challenges

In order to enjoy the benefits from electronic commerce, the business has to find ways of overcoming the drawbacks. Some of the drawbacks identified were, technological, managerial and business related.

Technological Challenges

Technological related issues like acquisition costs, and systems malfunctioning Websites Security

Managerial issues

Personnel and organizations winning support from management

Business Challenges

Legal issues Clients old habits customer service

E-Commerce Success Factors

Some of the E-commerce success factors that were identified were divided into three major categories and these were summarized as: Technological, managerial, and business related.

Technological Success Factors

Advanced Electronic commerce infrastructure Integrating the website with the organizations business processes Integrating electronic payments secure transactions integrating website with features such as cataloging

Managerial Success factors

Solid organization structure Establishing alliances with clients, It providers, and suppliers Balanced project leadership

Business Success Factors

Market responsiveness Enhanced customer service Rapid delivery on and offline advertising

RESEARCH

We managed to develop a theoretical framework on the above three major topics which dwelled on the successes, challenges, and benefits in relation to electronic commerce. We managed to conduct some series of interviews with some 72 Australian organizations even though we haven’t included this on the paper whereby the data obtained assisted to refine the list of success factors, challenges, and benefits that organizations perceived were instrumental on their decision to venture into electronic commerce. We developed a survey based on the refined list whereby this list was sent to the company’s senior executives such as the Chief Executive Office (CEO), Chief information officers (CIO) and IT managers.

Survey Methodology

In this particular survey we dwelled on

Benefits of electronic commerce Challenges of electronic commerce Success factors

The information gathered were ordinal and presented on a Likert scale which is common with most business research. This was chosen because it enables participants to respond by giving some degrees of either agreeing or disagreeing. The questions directed towards participants were to rate the success factors, challenges, and anticipated benefits arising from deploying electronic commerce in their organizations. The purpose of this was to explore on the awareness and expectations of ecommerce by organizations before they deploy the technology. We had a rating of 1-5 with 1 being the lowest and 5 the highest.

Response rate

Out of the 72 companies, 24 responded which gave a response rate of 33.3%.

In order to rank the benefits, challenges and success factors, we calculated the median

Success Factors

Secure Transactions

Executive Support

Properly designed website

Strong partnership with technological vendors

Proper Project Leadership

Adequate resources

Website Updating

Rapid delivery

Responsiveness and market flexibility

Enhanced client service

Integrating website with business processes

Proper communication with customers

Integrating modern technology

Proper Organization Structure

Table 1.0 Success factors in electronic commerce

The above table (Table 1.0) clearly indicates the common identified success factors which included; secure transactions, executive support, and user friendly website.

Challenges

Technology Cost

Minimal Ecommerce knowledge

Supporting Budget

Manpower

Customer service

Change management

Measuring Success

Lack of enabling technological infrastructure

Integrating ecommerce applications

Reputable vendor

Table 2.0 challenges of electronic commerce

From the above table (Table 2.0) it can therefore be conclude that some of the challenges encountered when implementing electronic commerce includes infrastructure costs, manpower, and customer service.

Benefits

Increase in sales

Organization efficiency

Competitive advantage

Enhanced processes automation

Expanded clientele base

Minimized operation expenses

Extension of new technology application

Client loyalty

Safe e-commerce environment

Enhanced organizations image

Improved employee skills

Minimal inventories

Improved knowledge management

Niche market acquisition

Table 3.0 benefits of electronic commerce

The above table (table 3.0) indicates that the most achieved benefits were increased sales, operational efficiency, increased automation and competitive advantage.

Training

A vendor will have to be consulted on training of the organizations employees. This training will have to be done in stages whereby key employees such as those found in the IT department will be given priority.

Recommendations

In order to fully tap on the potential of electronic commerce, organizations have to be fully aware of the success factors, challenges, and benefits that come from electronic trading. In our research we have managed to identify and confirm these key factors that are critical towards electronic commerce implementation. These factors also indicate that electronic commerce is a very viable venture and when effectively adopted there is likely to be increased business.

References

Department of Trade and Economic Development (DTED). Electronic Commerce, retrieved 2nd April, from http://www.southaustralia.biz/library/Electronic_Commerce.pdf

Fergusson, M (1999). Revenue collection via the internet: Transaction cost components, collectors 1999 proceedings.

Internet World Statistics, 2011, World internet penetration rates, retrieved 2nd April 2011 from http://www.internetworldstats.com/stats.htm

Nielsen (2010). Nielsen online measurements, retrieved 2nd April 2011 from http://www.nielsen.com/us/en/measurement/online-measurement.html

Salnoske, K. (1997). Building trust in electronic commerce, credit world, Vol. 85 no 6. Pp.9-11

Wilcocks, L & R Plant (2000). Business Internet Strategy: Moving to the Net: Moving to E-Business, London, Random House. pp19-46.