Tuesday, May 5, 2020

Electronic Commerce on Business Expansion

Question: Discuss about the Electronic Commerce on Business Expansion. Answer: Introduction: The concept of electronic commerce came up with the advancement of computers and the need for fast transaction in business. It means the ways in which selling and buying of goods and services can take place by using the internet (Shaw et al. 2012). Initially this concept of electronic commerce emerged from a totally different aspect. The need for transferring funds from one account to another and from one bank to another gave the banks the idea of EFT. Nowadays, electronic commerce plays a significant role in business. The term came into existence into the business vocabulary since 1970s. The importance of this method has been portrayed throughout this report. In todays world, it is impossible to run a business at the national level without the use of modern information technology and computers ( Bharadwaj et al. 2013). To analyze the importance and impact of e-commerce in the business world this report has taken up Australias famous e-commerce website named Kogan. Then this report tries to find out the way in which e-commerce has been used in Kogans business model. Then it has been tried to show some strategy that can help in implementing electronic medium in the business properly (Gettler 2013). At last the report tries to find out any way, if possible, that may help the company to expand its business outside the purview of Australia and into the global market. Life-cycle stage and its relationship with Kogans business: The typical business model highlights several stages through which any business passes during its course of operation. The stages are known as life cycle stage (Yakuel 2015). The life cycle stage includes a detailed analysis of the companys growth right from the time of planning, incorporation, the initial stages of growth of the websites the stages of expansion and also the last stage where the company sees a decline in their business either due to other competitors or due to the employees leaving the company (Xue, Niu and Yu 2015). In this report the three important stages of life cycle of website namely the stage of exposure, stages of interaction and the stages of e-commerce has been described thoroughly with respect to the chosen e-commerce site Kogan. Exposure Stage: The way in which any company highlights their business at the initial start up level is known as exposure in their business. Electronic medium has been the fastest and cheapest way through which a company may efficiently brand its products in the market. The cost of advertisement in traditional method is comparatively higher than the cost of electronic advertisement. The cost of publishing an advertisement in a news paper is higher whereas the advertisement reaches out only to those people reading that particular daily (Decker and Erasmo 2016). On other hand if advertisement is done through electronic channels it will reach out to more people as in todays world all the people are regularly engaged in some work over the internet. Our chosen e-commerce website Kogan was first launched in the year 2006 by Ruslan Kogan. The company sells it products directly to the consumers without any intermediaries and is now the leading online store of Australia. At present within a span of only 10 years since its launch the company has been able to cater and deliver for more than 3,000,000 products to their consumers. It has been exposed in the market since its inception and hence the company has already crossed its exposure stage in e-commerce (Wittmann and Reuter 2013). Interaction Stage: The stage in business where the people or consumer gets directly involved in interaction with the company is interaction stage. Under this stage the website is not used for direct trading purpose but for communication purpose. A two-way communication is established in this stage between the consumer and buyer. People can know about the service of the company in details through the companys website (Li and Karahanna 2015). Kogan has succeeded in this stage of business. Through their website people gets well-informed about the various service that the company provides. A glance into their website is enough for people to understand that the company is a retail seller of almost every product that a consumer may need. The home page itself makes people aware of the different deals that are available for them. The page titled as Contact Us gives the consumer a scope to post any queries and have a direct interaction with the company. After this interaction the company tries to expand their business via e-commerce. Stages of E-commerce: E-commerce is the final stage in business where the actual transaction between the buyer and the seller takes place. Under this stage, the consumer reaches out to the seller by using the internet. They place their demands online through the companys website and gets their product delivered at home. On the other hand, there is the stage of E-business where the internet has been used to re-design and integrate the business. The two stages, namely E-Commerce and E-Business are often overlapped and considered to be a single stage in the business market (Mohapatra 2013). Australias renowned e-commerce company Kogan has been successfully trading in the market for nearly 10 years. They have been able to use the internet efficiently in launching their products and highlighting them in their websites. They have divided their home page into several sections out of which the section named Shop by Department helps people to find out their suitable products according to their department like groceries, electronic gadgets, dresses to be named as few. From this section people chose their needed products and it gets delivered at their doorstep. People can pay the company during the delivery time or beforehand by using their cards. In a way the varied method of payment has helped the people to purchase more goods even if they do not have liquid money at home. E-Commerce Strategy and evaluation of Kogans e-commerce: The sole purpose of e-commerce is to trade in goods and services by a company. According to Australian Business data, in the year 2015 the retail sales of Australia exceeded $50 billion. It has been seen that e-commerce in Australia specially the mobile commerce has been growing in leaps and bounds by almost 40% per annum. There are several strategies that a company must take in order to be successfully running their business via online portal. Few such e-commerce strategies have been discussed here and the well-known retail store Kogans e-commerce has been analyzed on that basis. The few steps to e-commerce business plan are: Mission: Through this process the company initially tries to set a goal for its business. It tries to understand the values that the customer may give to the business (Persson, Fridolfsson and Holst 2016). Strategy: The strategy part tries to organize the ways in which the company is going to move in the path of doing the business. Technology: The various technologies that the company plans to use to provide service to the people is seen through this stage. The company can use e-mails, sms, online portals and even mobile apps to reach out to customers of different age groups. Stakeholder: Stakeholders are the partners of the company who helps them to move ahead in the business. They should be identified properly for being successful in business. Engagement: This part of the strategy helps the company to modernize their service according to the need of the customer. Reviews are taken from the customer after they have been served with different goods of their choice (Cavusgil et al. 2014). There are few more steps that any company irrespective of their engagement in e-commerce and in general commerce should prioritize and implement as a part of their business plans. These are: Aims and proper business model, a clear concept of the objectives of the business, a business model to meet the objectives, marketing, management of the business and gathering contents, ease access to different technologies and platforms and maintenance of the business and planning for future improvement. Also there is a need of integrating the market under one-roof so that people do not need to visit other website for consuming some other stuff (Decker and Erasmo 2016). Along with these few other things that falls under the implementing strategies are maintaining a proper inventory and stock of products so that people never face delays in receiving their orders. They should be allowed to pay their bills in different modes so that they never face any hindrance in buying products and also they sho uld be treated properly after the purchase takes place as well. Maintaining a proper return policy and a secured payment gateway is absolutely mandatory for e-commerce. On the basis of the criteria, Kogans business model has been tried to understand. According to Ruslan Kogan, the CEO founder of the company stated that in order to sustain in the market there is only one law and that is to remain ahead of the competitors in the market. The mission of the business is to serve the entire Australian with their products and to expand themselves in the global market (kogan.com/au/contact-us/ 2016). They have successfully used the e-commerce networks to expand their business. Their strategy is to deliver timely service to customers and keep them happy. In doing so they required a proper inventory. Nowadays, they are improving their service by using algorithmic techniques and techniques through which the whole transaction can be made automating. According to Tess Bennett, people are now more reluctant to spend their weekends with family members rather than visiting the stores by themselves. Yet on other hand they expect fast delivery service of their produc ts and Kogan has been successful in this regard (Bennett 2016). Also the company has been maintaining a large stock of inventory and offering people the products at lowest price in the market. This has only been possible as the company caters to customers by directly taking the products from their respective companies and selling it to the customers without any intermediaries acting in between. Hence it can be said that the company has been very clear and thorough in implementing their e-commerce strategy in the market and thereby has been able to become the largest online retail store in Australia (Verbeke 2013). Shift from National E-commerce to International E-commerce: Kogan which was launched in 2006 expanded and became the king in Australian retail market stores. They are now selling their products at global market as well. Along with the Australian continent, they has spread their business in the territory of the U.S and New Zealand. Operating in indigenous market and in foreign market requires a shift in business strategy (Fernie and Sparks 2014). The steps that the company took for expansion and should also take in future whenever they plan to expand their business are as follows: The first and foremost thing that they require is to have a detailed survey of the market where they plan to operate. The demand generated in that market in the last few years can be helpful for understanding and predicting the future demands of that market (Boone and Kurtz 2013). Then the company should also try to find a suitable place where it can open up its inventory. Operating the business without proper inventory within the domestic periphery of the foreign country can lead to delay of services. Hence, keeping a proper stock of inventory can ensure that the company never becomes defaulter in serving at the right time. The next yet one of the most important step that Kogan must take before expanding its business in foreign country is to get a detailed review of all the existing e-commerce in that market that serves the same purpose as Kogan aims to do (kogan.com/au 2016). This helps the company in understanding the hindrance that it may face from its competitors who are already operating and well aware of the existing market. The laws and regulation of the country where the company plans to establish its company should be under the grasp of the company in order to avoid any legal issues. Finally it is important for the company to create an website keeping in mind the cultures of the foreign country so that any comment, picture or products published on the website does not hurt the sentiments of the people of that country. Conclusion: The report can be summed up by recalling few issues that has been found in the Kogans business model. The company has been quite successful in their business in the past decade and the success has been due to proper implementation of the business strategy within the company. As the company has been engaged in online trading the company has always upgraded its website as per customers demand. The company has passed its exposure stage long back and is now well-known in the market. It is now in its interaction and ecommerce stage. It has been developing well with a good established communication with the potential customers and is now trying to capture international market. As per the data it has already been seen that Australia has faced an increase in mobile commerce at an annual rate of more than 40%. Kogan being an Australian company and one of the top online service providers is responsible for a large part of this growth. The company has already put forward its first step in expan ding its business outside the Australian territory. By following few simple steps and changes in their basic business models they are sure to succeed in global market as well. References: Bennett, T. (2016). Kogan.com investing in algorithms, not stores - Internet Retailing. [online] Internet Retailing. Available at: https://internetretailing.com.au/kogan-investing-algorithms-not-stores/ [Accessed 27 Dec. 2016]. Bharadwaj, A., El Sawy, O.A., Pavlou, P.A. and Venkatraman, N.V., 2013. Digital business strategy: toward a next generation of insights.Mis Quarterly,37(2), pp.471-482. Boone, L.E. and Kurtz, D.L., 2013.Contemporary marketing. Cengage learning. Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L., 2014.International business. Pearson Australia. Decker, R.A. and D'Erasmo, P.N., 2016. Market exposure and endogenous firm volatility over the business cycle.American Economic Journal: Macroeconomics,8(1), pp.148-198. Fernie, J. and Sparks, L., 2014.Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan Page Publishers. Gettler, L., 2013. Stop selling and start buying the customer.Management Today, (May 2013), p.18. Li, S.S. and Karahanna, E., 2015. Online recommendation systems in a B2C e-commerce context: A review and future directions.Journal of the Association for Information Systems,16(2), p.72. Mohapatra, S., 2013. E-commerce Strategy. InE-Commerce Strategy(pp. 155-171). Springer US. 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