E-commerce Analysis
Executive Summary
The report seeks to analyze The Book Emporium’s intended approach to adopt an online business as one of the critical ways of enhancing the provisions of its services. This is focused on ensuring that the company resurfaces from its current economic downtown. In analyzing the online environment, the report did focus on analyzing SWOT analysis on online businesses within the company’s industry, determine the most effective and efficient publishing platform the company will use, establish the significant business model to be used by the company, revenue model as well as the pricing strategy. The key strengths identified form the report include enhanced electronic payments systems, which are fast, efficient and easy to use, cost-effective Marketing, High capacity of expanding the customer base, expected e-business improvements, and has low entry barriers. On the weaknesses associated with this type of business include having no direct interaction with clients and sellers, thus making it impossible to affect the decision-making process; shipping cost tends to be high than the costs of the products and high customer expectations. Some opportunities would include 24/7 availability, Industrial growth as the sectors, B2B sector shifts from $730 to $9500, and growth is highly expected to be growing, and Increased market growth as the number of online users continues. On the critical threats, the company is exposed to competition, fraud, privacy concerns, and future legislation. Based on the nature of operations, the company will use both the B2B and B2C as a critical business model. On a pricing approach, a competency-based approach, the cost-based approach seems adequate to enable the company to have a competitive edge and make profits after considering their production cost.
1.0 Introduction
A company’s economic stability relies on its ability to provide services and products sustainably across its customers. The inability to meet the needs of the customers would render it ineffective and bankrupt. For the Book Emporium, the need to adopt online business is an approach that would not only change its business operation but also alter its business culture and nature of functioning. Yunanto & Paizal (2019) provides that online business is one of the key business trends in the modern enterprise, which has seen most of the companies, such as Amazon and Alibaba, grow. The online business primarily helps an organization access a broader market base, which increases sales and the possible growth of profits. Besides, online business has also provided by has been demonstrated to have low operational cost, a factor which enables companies to enjoy more profits compared to brick and mortar businesses. Don't use plagiarised sources.Get your custom essay just from $11/page
2.0 Business Environment
2.1 SWOT Analysis
Strengths
Online business, as explained by Awais & Samin (2015), has been one of the currently growing and accepted forms of business across the globe has attracted both local and multinational companies. The use of online companies, as argued by, has key strengths associated with financial operations, marketing, geographical aspects, price, communication, and energy barriers. According to Yadav & Sharma (2017) online businesses while focusing on the firms to the business model and B2C models’ transactions are conducted through electronic payment channels which they term to not only comfortable but faster and can be done from any part of the world at any time of the day.
The other strength associated with online businesses is the fact that advertising the company’s products and services would relatively be less costly in comparison to the conventional offline systems. Moreover, there exist several different free internet marketing tools for promoting the company’s brands, including the use of target emailing, SMM, and SEO. Adopting online business also enhances the company’s ability to expand its client base, a business’s services, and product provision globally. The price of selling directly to customers at a relatively lower process that the market values will help the organization reduce its number of market agents. Other strengths related to online businesses, as explained by Awais & Samin (2015) also include the entry barriers and communications. The ability of the company to have direct consumer communication through the Business to Consumer model once an order is placed or ordered enhances the company’s good relationship with customers. More the startup costs associated with entry to online businesses are relatively lower than regular offline companies.
Weakness
The critical weaknesses associated with online business are illustrated from Yadav & Sharma’s (2017) research include; high shipping costs, psychological effects of the company, high customer expectations, and personal aspects. Moreover, in various situations the shipping costs mostly for individual who might relatively far tend to be much higher than a product cost, this sometimes might hinder the need to deliver some products or if the shipping costs are included in the product customer might be discouraged to purchase due to possible price hike. It would be argued that several customers might be referring to purchase product personnel by visiting the market rather than buying through the internet. This also led to other weaknesses of customer expectation as some of the clients might expect the same level of service form small businesses and industry giants like Alibaba or Amazon. This issue might lead to customer dissatisfaction.
Opportunities
Online businesses have many opportunities to the current form of operation for the company. Some of the significant opportunities include global influences, 24/7 availability d, market growth, and industry growth. It’s estimated that the online retail industry and sales between 2015-2019 experienced incredible growth having recorded a B2B sales of from $730 to $9500 billion, B2C sector recording sales from $70 to $360 billion. This shows that online business growth is highly anticipated, and it continues to grow at high rates, a factor that positions any company to benefits from this expansion. On the other hand, Awais & Samin’s (2015) research estimated that there is an increasing number of daily Internet users. As of December 2019, there were 3 billion online users representing almost 34% of the world’s population. This assures the businesses for market growth. Besides, being a systems-controlled business selling online will allow the company to takes orders around the clock every day of the week.
Threats
Online businesses are exposed to different threats, the inclusion of fraud, competition, privacy concerns, and future legislation. On fraud threats, some of the clients have significant concerns about fraud and misuse their financial data. The fact forms an entire segment that is not likely to do business or make purchases via the internet. On privacy threats, some of the clients prefer not to provide their details for fear of being misused (SAYEL & SABHA, 2017).
2.2 Publishing Platforms
There are different types of publishing platforms the company can use to enhance its publishing goals. Some of the significant critical platforms include Joomag, mag+, and Quark. Quark platforms provide an end to end content automation channels that allows the creation, management, publishing, and delivery of content across the web, print, and digital channels. Through the platform, the publishers can develop regulatory documentation, policies, and procedures investment researcher reports or interactive marketing communications. Joomag is an online publishing channel that pays attention to each phase of the publishing lifecycles. Mag+ is also another online platform offering the users software for creating content apps. The platform is characterized by critical features of semble, designed, offline support, video, audio, branded apps, social sharing, in ap purchasing, subscriptions, and app analytics.
Of the three, the company would opt to use Joomag, one of the current user-friendly platform. The platform is generally efficient and effective, having a better and friendly feature such as starting options as the user can begin a publication from scratch by choosing a predesigned template or uploading a PDF. The platform is also useful as it allows interactive elements, has multi-platform optimization, enables social media sharing, enhanced branding, has comprehensive tracking analytics, has SEO tools, and, most importantly, excellent CRM.
3.0 Expected Business Improvement
3.1 Business Model
The company will primarily focus on two forms of business models of B2B to consumer form of business model. Business to the business form of the model is a business model that would involve the company selling its products directly to the consumers. The other business to the business model will include selling the company products and services to different businesses (Xu & Chen, 2020). This would include providing services or products to other companies such as wholesalers and retailers. The company would have these two forms of companies purposely to cater for the diverse number of customer needs. The activities to businesses form of business model is characterized by different features ranging from more revenue per sales, enhances the company’s access to more users and user IDs, a better niche marketing research’s focused on trade channels, less price sensitivity, has long sales cycles, contain more complex model and target market and has a less potential strategy focused on-trade channels.
3.1.1 Business to Business
Using the business to the business form of business model is very advantageous form the fact that it enhances market predictability, better sales contain lower costs, and includes a data-centric process benefit. The use of the model would be termed much effective and sustainable; Davies & Iankova (2018)experts predict that B2B online businesses are expected to reach $1trillion by 2021 in the US alone, and this is also expected to be replicated across the globe. Further, 60-75% of the people have started referring to research purchases before engaging a salesperson. The need to adopt the approach is also justified form the fact that the millenniums fundamentally use mobile devices and other social media channels for products purchases and research shows that 73% of the millennials have at least shopped online definitely expressing how the company would tap wide and diverse potential customers through online businesses.
Mingione & Leoni (2020) would argue that one of the significant benefits of the B2B model is that it depends on sufficient and factual data to streamline the entire processes. Under the approach, the business can avoid other business errors, and the type of business helps the business to forecast. Mingione & Leoni (2020) support the fact that B2B contains lower operational costs and enhancing better sales for the company. In his argument, he states that B2B is a useful model to online businesses on the benefits that it improves Supply chain management, a factor which does not only enhance the loyalty of customers but also enhance customer satisfaction. As a result, this results in improved sales. The model as well increases the company’s ability to showcase its products and services and unlocking efficient upselling and other opportunities such as cross-selling. On the other hand, on the lower cost benefits, based on the adequate supply chain management processes, the online business models result in lower costs for the businesses. Under most of the situations, the business’s work will be accomplished throng automation, a fact that will eliminate possible business errors and undue business expenses. Besides, in comparison to the other forms of business strategies such as C2C, or C2B, B2B business model has more market stability. B2B sectors grow gradually and can adapt to different complex market conditions (Kavak & Özdemir, 2020). The approach enhances the company’s ability to strengthen its online services and creates more opportunities by getting potential customers and resellers.
3.1.2 Business to Customers
Business to Consumer business model is one of the other crucial models that can primarily help the organization grow both on its market, sales, and profitability. Yin & Pan (2020) argues that the company can develop an online store, benefiting from the increasing promotion of brands and, at the same time, getting more revenue from the consumers who prefer using the internet as a source of shopping. With the current developments of Internet tools, different, innovative, and new ways of market products are being developed. The virtual stores by the company will provide a good option of e-commerce directed at businesses, whether small or big.
3.2 Revenue Model
A company-specific revenue model refers to the process through which the company will be making money by specifying how it will be going to charge for its products and services. Based on the nature and the operations of the company, the company will adopt two forms of revenue models, including the transactional revenue model and the web sales revenue models. The transactional revenue model, as argued by Yunanto & Paizal (2019), is a model win which the company will provide its products or services and clients paying for them. The model would involve the company making a one on one interaction with the customer in the purchasing period or provision of services through online channels and will have to make payment once specific products or services have been derived. As much as Dimitrakopoulos & Uden (2020) would argue that the method might be competitive to other rivals, its key benefit is based on the fact that clients are more attracted to this type of experience due to its simplicity and the broader set of options.
On the other hand, as the company intends to embrace online business, it should always be prepared to manage orders done online. This demands the adoption of web sales. Through this, clients will pay for a service or a product except that clients must first to the company’s web search to make a transaction. Though it would be argued that the relationship with the customers is incompatible with web sales model, the model work in a broad variety of offerings including hardware, software, and even subsection services positively enhancing the company’s market base, taking a board marketing base and provide a convenient and modernized form of operations (Kelen, 2015).
3.3 Pricing Strategy
Pricing forms one of the crucial parts of the e-business concept, and the pricing approach for the company should be established on the basis of market research. Price is always set based on the competition, and this might have a direct impact on market share. It would be illustrated that the company is currently using a flat-rate pricing strategy of 30% on all books sold covering the marketing, publishing, and standard cover design. Basing the current operations of the company, two pricing strategies would be adopted, including cost-based eCommerce pricing and a value-based pricing approach. Using cost-based eCommerce pricing would definitely be useful in ensuring that the company attains its possible expected profits, while a value-based pricing approach would be sufficient in covering the value of the products offered.
3.3.1 Cost based Ecommerce Pricing
Cost-based pricing or termed as a cost-plus pricing approach, enables the company to set prices without significant customer or market research and ensure a minimum return on each product sold (Casier & Verbrugge, 2017). As the name provides, the pricing approach takes the cost of each of the company’s produced products and adds the markup percentage on top of that (Illustration 1). This forms the most popular choice for new online sellers, as it only has two variables to consider: what a product cost you to make, advertise and fulfill and the profit one would like to build on the product (Krämer, 2018). As much as some of the company’s services or products have predetermined costs such as online book publishing and online book sales, some of the products such as online marketing standard cover design, book editing, and bespoke cover design can have varying prices based on the cost of production and the expected profits.
Illustration 1
The company’s selling price of its products will be set at accost plus a particular profit margin. The company will first be calculating the cost being incurred to make or acquire its products, and add its desired profits to determine the last selling price. The approach will help the company in ensuring that it means it recovers all of its costs and earning some profits for the business (Amaral & Guerreiro, 2019).
3.3.2 Competitor Based Ecommerce Pricing
Competitor based approach would simply include monitoring the other company’s processes and setting the prices relative to theirs. The competitor-based pricing depends on checking to see what prices similar organizations have published for their products and then primary pricing the company’s products similarly (Thalken, 2018). The use of this approach is considered effective as it will improve the company’s sales if the prices will be set below its competitors, enhanced traffic, wider target audience, and simple way of keeping tabs on competition (Illustration 2) (Taylor & Hollenbeck, 2019).
Illustration 2
4.0 Online Payment, benefits and risks of changing current business
4.1 Online Payment
By going online, the company will demand to adopt and embrace the online payment system through which customers will be paid money. The company will adopt five major payment channels: PayPal, Apple pay, masterpass, American Express, Google Pay, stripe, Venmo, and Authorse.Net. Once payments are made, they should be secured within the company’s wallet for each channel of which a notification will be sent to the systems of the benefit matching any given orders made.
4.2 Benefits
Online business, as argued by Yunanto & Paizal (2019) as ben one of the current strategies through which companies are diversifying their product and service provision as The Book Emporium has no obligation to have a competitive edge by the incredible market base and increasing its sales through online businesses. Online business and the expected changes on the company’s business would be advantageous form the point that they would help the company reduce its overhead cost, enhance easy accessibility of the market, widen its market base, the potential for rapid growth and
Through only businesses and change in its activities will possibly expand the company market beyond its local clients very quickly. One might consider a strong demand for the products in other nations which can respond to by targeted marketing, proving the company website with different languages and possibly partnering with other oversea companies. Though a more defined and effective digital marketing, the company can boost its sales.
4.3 Risks
Just like any other business operation, online business is prone to risks, and the company’s current change of business operations might affect its operations. For instance, one of the possible risks the company is early exposed to is the risk of fraud and cybercrime issues. As noted by Yunanto & Paizal (2019), current growth in technology has really affected the online business risks considering that some of the companies have had issues with stolen customer data and other security issues from the criminal.
5.0 Conclusion
The need to adopt e-business improvements to the business, the company would have to adopt critical different business environments based on the pricing strategy and revenue model. This would definitely include utilizing B2B, B2C as key ricing strategies, then competitive pricing approach, and cost-based approach as a revenue model. Adopting e-business will have a positive impact on the company as this will enable the company to go global and lower its costs. Adopting the business enhances the customer base and enhanced revenues. It’s evident that as technology increases, online business, characterized by both e-marketing, and e-commerce has been growing a factor that has seen most of the organization shifting most of its services to online activities. The online business currently embraced by some of the firms such as Alibaba, eBay, and Amazon is an approach that has made them access the global market, expand their markets, and expand their service provision. In relation to The Book Emporium, adopting online business would definitely be an effective and efficient way of enhancing not only their service provision but also improving their market base and reducing other overhead costs associated with storage, and marketing. As a way of enhancing it effectively enhances online stability and maximizes profits, it would be recommendable that the company focuses on the specific target market, manage shipping costs wisely, optimize site’s speed, and embracing social media in marketing.
References
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