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An Analysis Of Proposed E Commerce Strategy Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 2767 words Published: 1st Jan 2015

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The rapid enhancement in the field of technology has necessitated businesses to consider the implication of technology in performing their business activities. The technological development along with the need for pursuing higher growth by way of internationalizing the business activities in international markets is highly in demand for the businesses to stay in the market. The higher level of competition has fostered businesses to make use of digital technology in their operational activities in effectively meeting their customer’s need. Most of the businesses are indulging in e-commerce practices in effectively performing their operations across boundaries. E-commerce is an important medium of presenting the business offerings to customers, as it involves the usage of technology that aids businesses in reaching wider markets easily. E-business is considered as new mantra for businesses in the modern world as it not only facilitates the development of business activities worldwide but also allows them to advertise their products and services in a more effective and efficient manner (Plant 2000).

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This report is aimed at performing a preliminary analysis of the proposed e-commerce strategy for ABC organization which has been to expand its reach to international markets and serve a wide range of customers globally. The organization presently deals in electronic products that cater to the needs of electronic items for a large number of customers. ABC organization is in immense need of expanding its operation in the international markets particularly because of increasing competition from the local competitors in Australia. As a result, the e-commerce strategy in the form of achieving expansion in the international market would allow ABC to cope up with the intense level of competition and achieve sustainable growth. The strategy of ABC is to develop a website through which it can be possible to offer its products and services in the international markets. In performing the preliminary analysis of the e-commerce strategy, this

report makes an evaluation of the environmental analysis through the application of important marketing tools such as porter’s competitive forces analysis. Apart from this, the report will also include an assessment of the potential of e-commerce strategy in meeting its strategic goals and objectives. The role of website in satisfying its key stakeholders along with the major risks that ABC has to face in expanding its business in the international market will also be critically assessed in this report.

Environmental Analysis of the Proposed E-Commerce Presence

The assessment of the ABC organization implies that it is currently based in Australia and company is planning to expand in the international market. For instance, the target market as decided by the company for expansion is Indian market. This is because; the Indian market is growing one for the electronics products which can offer large opportunities for higher growth of the organization. Thus, the proposed e-commerce presence of the company can be identified as the Indian market through the integration of technology in its existing operations. A complete environmental analysis of the proposed e-commerce presence of the company has been performed below:

Value proposition of the e-commerce strategy: The proposed e-commerce strategy of expanding to Indian market by ABC for its electronic products through website would likely to provider higher value to its target customers. The major benefit to customers from its expansion to international markets in India is the accessibility to a wider range of electronic gadgets offered by the company. The company specializes in providing higher quality electronics product at reasonable rates and as a result, it becomes a better opportunity for the customers to avail the extra benefits offered by the company. The e-commerce strategy will not only be effective in

delivering value to its customers in the Indian markets in terms of making a wide variety of electronics products for Indian customers, but it would also enable the organization to outperform the competition easily and sustain its business effectively. Further, it will be a new experience for the customers in the Indian markets as the e-commerce strategy by ABC organization will enable them to have access to wide range of electronics products. Another important feature of electronics product by ABC that will create value for its customers is the faster delivery of products to the customers after the order is placed. This will be made possible through an effective supply chain management (Currie 2004).

Core competencies that can be enhanced through e-commerce presence: The e-commerce presence will help ABC organization in enhancing its core competency of quality electronics product at reasonable prices because the volume of sales would automatically increase from expansion to Indian market which will allow the company to attain economies of scale. The ultimate efficiency can be achieved in terms of reduced cost of products which can easily be transferred to final consumers for the purpose of value creation for them. Core competencies are usually critical to an organization and an improvement over the core competency leads to the attainment of competitive advantage. In case of ABC, the e-commerce presence in the international market allows an opportunity to enable the development of core competency of enhancing the supply chain management functions of the organization, as it aimed at ensuring quicker delivery of electronics products to its international customers (Epstein 2004).

Market analysis and trends of expanding to Indian markets: In case of the given proposed e-commerce strategy of expansion of electronics business of ABC organization to Indian market through website, it becomes essential to perform a market analysis of such market

so that better expansion and ultimately, improved growth can be achieved from such strategy. Market analysis implies the analysis of all the major factors present in the proposed market so that necessary strategies can be developed and the potential for success in such market can also be identified (Doole and Lowe 2008). The market of India for the proposed e-commerce strategy is considered to be effective as the trends and statistics shows that the internet users are growing at a rapid pace in the Indian market. For instance, the statistics shows that India accounts for 2% of the e-commerce in the Asia pacific region, but the increasing population and literacy rate in the country has increased the number of user’s base for such e-commerce from $2.1 billion in 2008 and is expected to increase $6 billion by 2011 (Where Does e-Commerce Stand in India 2011).

Despite having the payment challenges, the market for e-commerce is expanding at a rapid pace in India. For instance, the facts shows that India has the number of people transacting online in India will likely to increase to 39 million by 2015. With respect to e-commerce market in India, the estimated online transaction will improve and there is expected a growth to $24 billion by 2015 from the current state of $6.3 billion (Indian e-commerce Market Estimated to Grow to $24 billion by 2015 from the Current $6.3 billion 2011). This signifies that the e-commerce activities will be performed at a rapid pace in such markets which will provide opportunities to the e-commerce dealers in achieving higher growth (Charman-Anderson 2011). This shows an increasing trend for e-commerce related practices in the country which would be highly beneficial for the proposed e-commerce strategy of ABC organization.

Overall, the market analysis and trends for e-commerce in Indian markets shows a positive trend which would likely benefit the traders who performs their business activities over internet.

E-commerce strategy evaluation through Porter’s five forces model: The porter’s five forces model is highly useful in performing an analysis of the overall industry. The five forces model includes the assessment of the industry from five different points that would be highly beneficial in the given case of making an assessment of the proposed e-commerce strategy of expanding to Indian markets for electronics products by ABC organization (Turban, 2010). An evaluation using the important five forces model for electronics industry in India is performed as follows:

· Bargaining power of buyers: Buyers are those who purchases thee products and services offered by the company. The buyer power is considered to be large when there are few dominant buyers in the industry. In case of e-commerce for electronics products, the buyers are considered to be the final consumers as there are no such major buyers that account for larger sales of electronics products in India. This implies a lower buyer power for electronics products in India which will benefit the proposed e-commerce strategy of ABC organization.

· Bargaining power of suppliers: Supplier power is considered to be moderate in the sense that there are various online suppliers of electronics products in India such as LG electronics, Samsung, Nokia, E-bay and many more. As there is no one major players accounting for most of the supplies for electronics product, the supplier power is considered to be moderate (Singh and Anand 2010).

· Threat of rivalry among existing firms: As far as the threats of rivalry among existing firms, it is considered to be higher because of the presence of large number of suppliers of online electronics product in India. Apart from major e-commerce dealers for

electronics products such as e-bay, Amazon etc and various global companies such as Samsung, Sony, Microsoft etc, the Indian market comprises of large number of local retailers that provides cheap electronic gadgets at reasonable rates and thereby intensifies the level of competition.

· Threat of substitutes: In case of electronics industry in India, the threat of substitutes is considered to be lower because the substitute product for electronics is not available. Consumers have to purchase the electronics products as the need for such electronics product cannot be satisfied through any other product alternative.

· Threat of new entrants: Although the threat of new entrant is higher because of existence of large numbers of electronic dealers in the country and also higher infrastructure cost, but by way of considering electronic medium of doing business, the threat of new entrants can be eroded. For instance, the proposed e-commerce strategy of ABC organization will not likely to face the problem of new entrants.

Overall, the porters five forces analysis for electronics products in India shows the availability of large number of suppliers which intensifies the competition and as a result, ABC organization need to consider the development of effective strategies for its expansion to such markets.

Strategic Goals and Objectives of ABC

The proposed expansion to Indian markets through the development of website will be helpful in addressing a wide range of strategic objectives and goals of the organization. For instance, the major strategic goal is to pursue expansion to international markets so that higher growth can be achieved. Further, such international expansion also allows the opportunity for

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sustenance of the organization as ABC is facing the problem of intense competition in its local market in Australia from a large number of local players. Thus, the main strategic goal of ABC can be considered as achieving international expansion that can effectively be possible through its website, as the website will be designed in a manner that would be highly suited to Indian customers. In pursuing the strategic goals of international expansion, the major objectives of ABC will be:

· To offer wider range of electronics products to its customers in Indian markets so as to allow them a choice to make a selection.

· To offer quality products at reasonable prices so that customer can be attracted initially and a strong brand reputation can finally be developed.

· To present the information about its offerings in its website in a manner that attracts its customer at the first instance.

The attainment of all these objectives will help in the successful accomplishment of the strategic goals of achieving higher growth in the e-commerce electronics industry in India.

Key Stakeholders need from website

Different stakeholders have different needs from the e-commerce website. For instance, the key stakeholder i.e. customer want the availability of large number of electronics products at cheaper rates and this could easily be fulfilled through the website of the company, as it allows the company to display entire information of all its offerings and as expanding in the form of e-commerce is not highly costly for the company, the wants of customers of availing electronic products at cheaper rates can also be achieved. In addition to customer, the investors want higher

return on their invested fund which can be achieved through success in the business expansion of organization through its website. The satisfaction of its key stakeholder i.e. the customer would lead to the attainment of key goals of the website of the company which has been to provide wider access to customers for electronics in India. By way of performing a rigorous marketing of website, a better reach with the customer can be established through website and thereby, a better fit between the goals of the website and the organization can ultimately be possible.

E-commerce business model

There are large numbers of e-commerce models that are available to businesses in performing the expansion of their business activities in international markets. In case of ABC organization, the business models that will be used for its e-commerce website is Business to Consumer model (B2C). As per the B2C model, the target of businesses is to sell its offerings to individual customers through its website. The B2C model is an important model of e-commerce that is being implemented using the web. As in case of ABC organization, the strategic goals of the organization has been to perform international expansion and to focus on the consumers for electronics in Indian markets, it can be effectively facilitated through the B2C model of e-commerce. There are various such examples that have effectively used such B2C model in achieving success globally such as Amazon, Walmart, BestBuy.com etc. B2C is internet only stores that provides offerings to its customers through internet only and as identified, there lies an important opportunity for e-commerce in the Indian markets, and the strategic goal of achieving higher growth can be possible through the consideration of such B2C e-commerce model (Morley and Parker 2009).

Potential risks from e-commerce strategy

From the proposed e-commerce strategy of the organization, there are various potential risks that company has to face and thereby required to make effective considerations for all of them. For instance, the major risk is the risk of failure of such strategy because of existence of higher level of suppliers in the electronics industry in the Indian market. Secondly, the increasing threats from hackers also lead to security risks to the organization, and as a result, effective planning is essential in order to effectively deal the security issues from the e-commerce strategy. The third major risk from the e-commerce strategy to ABC organization is the lack of experience of dealing with international customers. As the company has its operation in the Australian markets presently, the lack of international experience would cause severe problems in dealing with the customers internationally. The e-commerce strategy would also pose the risk of currency exchange, as dealing with customers in India would require ABC to make necessary arrangements for performing is operation in Indian currency. As a result, the fluctuations in the exchange rates would increase the risk of the organization and it might be possible that company has to bear losses. All these are the major threats to ABC organization from its e-commerce business strategy of expanding to Indian markets through its website.


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