The Process of Developing E-Commerce - Term Paper Example

? STRATEGIC BUSINESS PLAN FOR AN ONLINE STORE By Executive Summary This paper is a strategic business plan for an online store that deals with the sale of electronic devices, including mobile phones, DVDs, and home appliances among other electronic devices. The online store lacks a plan, thus the reason for its lagging behind in growth, even though it is new in the market. In this paper, various issues concerning e-business have been explored in relation to how these can be integrated into the business plan of the online store. Focus has been given to thinking about the process of developing e-commerce, as well as the benefits and challenges of e-business. From these, some insights into appropriate strategizing for the business are offered. Furthermore, there is a comparison of the online store in this context with other similar stores in the United States. The identified online stores are considered the top competitors of the online store in the market. Nonetheless, in order to overcome some of the challenges and ensure growth, a SWOT analysis of the store is explored in order to understand important aspects in the internal and external environment of the online store. In the conclusion, focus is given to the attribute of a leader. These are discussed as part of the strategy to ensure the growth and survival of the online store. Nonetheless, this paper bases on different e-business issues to develop a strategic business plan for the online store. Table of Contents Introduction 4 Background 5 Current Thinking Relating to the Topic 6 Relationship to current/other organizations 10 Conclusion 11 Appendices 13 References 14 Introduction One of the fastest growing business fields in the world today is e-business. Internet usage has experienced an overwhelming growth. It is estimated that the number of internet users in the world has grown by 400% between the years 2000 and 2010. For this reason, different companies have looked for ways through which they can interact with customers online. One of the ways is through setting up websites. Here, companies offer different services to their online customers, who might not be able to reach the physical stores. In addition, some businesses have become internet-based, with no physical stores. Nonetheless, the number of businesses that are online-based continues to grow today (Torabi, 2011). In order for any business to be successful, it must have a strategic plan. This maps the strategy that the business will adopt in order to attain its goals (Basi, 2000). I have special interest in entrepreneurship, and this study program has made me knowledgeable in matters of entrepreneurship. Therefore, using the knowledge acquired in this program, this strategic business plan is meant for an online store, which deals with cell phones, iPads, and other electronic devices. Since this is a new online store, this strategic business plan should help the store to establish itself in the online market. According to Basi (2000), when developing a new business, an entrepreneur is faced with various business-related issues. This paper will therefore, focus on some of those issues. Furthermore, this paper will explore the current thinking relating to e-business. This is important, as it will offer insights in major areas the strategic business plan should base. In addition, the paper will include a comparison of the store in the context, with similar online stores. Since this paper also discusses with marketing in e-business, there will be a SWOT analysis of the online store. This will help to identify major factors in its internal and external environment, which is important in the development of strategy. Background The online business store was developed mainly to sell cell phones, iPads, and other electronic devices directly to customers. The prices of the electronics in the store are made affordable in order to attract more customers (May, 2010). The products sold in the store are ordered directly from manufacturers and importers. The headquarters of the online store is centrally located, in order to make the process of delivery and distribution efficient. In addition, the store sells a wide variety of electronic devices, including cell phones, cameras, music players, DVDs, speakers, home appliances, and computers, among others. This gives customers a wide range of options. The online store aims at satisfying the needs of customers, thus strategies to sustain the customer base are considered. One major strategy is special offers. Customers who purchase in bulk are entitled to different offers, depending on the amount of products purchased. Furthermore, customer service is highly upheld. This includes delivery of products, as well as addressing of customers’ concerns. Most importantly is the website of the store, which will be developed in a manner that makes it easier for the customers to navigate the store (May, 2010). The main vision of the online store is to develop a good reputation among its customers and the public. The store will therefore, base on its prices, customer service, and delivery to ensure a good reputation. In addition, the online store aims at ensuring that it achieves a steady flow of cash, thus maximization of profits and ensuring low levels of losses. The store will also ensure that it has long-term business partners, as this is important for its survival and co-existence in the market. Since the store faces competition from other big, established, and profitable companies, efforts will also be aimed at ensuring that the online store becomes trusted and reliable among the people in the U.S.A as well as those outside the country. Considering all the plans and aims of this online store, it is important a small online store develops a strategy, which will enable the plans and goals to materialize (Sandberg, Robinson & Pearce, 2001). This is the major reason why a strategic business plan comes in handy. Part of this strategic business plan for the online store will address important issues on e-business, which are relevant and of influence. Overall, this strategic business plan proposes different factors and a business environment that can be conducive for this particular online store, and which can enhance its productivity and profitability. Current Thinking Relating to the Topic This paper mainly addresses the aspect of e-business and as e-commerce. This is because a strategic business plan for an online store has to include different factors related to e-business, as an online store is categorized as e-business. For this reason, focus will be given to current thinking on e-business and e-commerce. This includes major arguments that have been developed presently, and in the recent past concerning e-business, as well as the different perspectives of various scholars on e-business and important factors that influence it. There are different ways through which people understand e-business and e-commerce. However, the main idea remains that most companies in e-business are internet based. Therefore, internet plays a major role, and is the defining factor of e-business and e-commerce. Rowley (2002) explored the aspects of e-business and e-commerce in an extensive and intensive manner, including how this is practiced, as well as the guiding rules of the processes. In her book, Rowley (2002) defines e-commerce as, “doing business electronically across the extended enterprise. It covers any form of business or administrative transaction or information exchange that is executed using any information and communication technology” (p.2). From this definition, it is evident that any type of business can adopt e-commerce, as long as operations and procedures of the business are based on information and communication technology. On the other hand, Rowley (2002) also defines e-business as, “a wider concept that embraces all aspects of the use of information technology in business. It includes not only buying and selling, but also servicing customers and collaborating with business partners, and often involves integration across business processes and communication within organization.” (p.2). Compared to e-commerce, e-business is wider in scope, and focuses on different relationships in the business. A business might choose to develop e-commerce years after its founding. On the other hand, it is possible for a new business to adopt e-commerce even before it becomes operational (Canzer, 2006). However, in this case, the online store dealing with electronic is entirely internet-based, meaning it adopted e-commerce in entirety. Nonetheless, before setting up an online business, it is important to follow a procedure or steps, beginning from the start to the end of the setting up process. Therefore, since the online store in question is not yet well established, this means it is still in its developmental stage. Therefore, part of this strategic business plan will focus on the thinking of scholars concerning the development of online business. This will then be important in helping the online store to adjust to the right procedure in order to ensure firm establishment. Developing e-commerce is a process that involves different stages. According to Rowley (2002), four major steps are involved in the development of e-commerce. Therefore, if any entrepreneur thinks of establishing an online store, they must put into consideration the four steps, in order for their online business to become functional and successful. In other words, the online store in the context of this strategic business plan must adhere to these stages in order to realize success in the online market. These four steps can be summed as contact, interact, transact, and relate. In the first stage, the business ensures its presence on the internet. This is a basic step and primarily involves setting up of a functional website for the online business. The website should contain basic information about the company, including the contact information and physical location, among others. This is an important stage, as the corporate information published on the website determines the kind of corporate image the company will have (Rowley, 2002). The second stage is about interaction and communication. Here, customers get the opportunity of getting in touch with the company through the developed website. At this stage, it is necessary that target marketing is adopted. Additionally, news and major happenings in the company can be communicated to customers on the company website. The third stage involves finances. Here, the company engages in online transactions, fulfillment of customer orders, and interaction with business partners. In the final stage, the company integrates a complete internet capability. Additionally, the relationship with customers becomes two-way. The online store in this context has not successfully reached the final stage. Therefore, these stages will be reconsidered in order for the e-business to be fully-fledged (Rowley, 2002). Due to the increased number of internet users and adoption of e-business by companies, different scholars today have explored the benefits of setting up e-business. Focus has also been given to the challenges, which companies adopting e-business might face. Nonetheless, such thinking by scholars will guide the strategic business planning of the online store in context, since this will help in guiding the business on how to maximize the advantages of e-business and how to address the challenges that are identified. Tan (2003) notes that a major benefit of e-business is that it offers global promotion. The internet is a global platform, thus anyone around the globe can access the business through the website. E-business also promotes convenience on the side of customers. The internet breaks the geographical and availability barriers, thus customers from across the world can engage in online shopping. Rowley (2002) also notes that e-business enhances the customer service experience. Compared to physical stores, it is easier for customers to customers’ needs to be addressed through the internet, as customers do not have to travel to the company premises. This also enhances communication between the customers and the company. Another major benefit of e-business according to Rowley (2002) is that it requires low costs to operate and maintain. There are no offices and warehouses, thus low infrastructural costs. The number of staff is also small, especially for small online businesses. Additionally, marketing costs for an online business are low, as the company engages in direct marketing on its website. Canzer (2006) identifies competition as the major challenge of e-business. Although this is advantageous, to the small upcoming online store, this is a challenge. In this case, it is less costly to set up an online store, and this removes the barrier to new entrants. With many online stores, there is a tough competition, as they are all in the same position. Security is also a challenge to e-commerce. When the store exchanges information with its customers, it is possible for a third party, including hackers, to gain access to the customer information, which should be confidential, and this might discourage online shopping. Finally, trust is a major challenge for online businesses. Some customers think they might fail to receive their products after making payments. This issue is worsened by online thefts that are common today. However, there are different ways to overcome the challenges. In this case, the online store will base on stated the benefits of e-business to gain stability and a competitive advantage. For the challenges, the online store will work on building trust with customers, ensuring the privacy and confidentiality of customer information, and investing in customer service. Relationship to current/other organizations The online store in this strategic business plan is not the only online store in the USA, as there are other many online stores. This online store specializes in electronic devices. There are many similar online stores in the electronics industry. For this reason, it is possible to identify some of the online companies specializing in electronics, and explore how this relates with other online stores in the USA. The main online store that also deals with electronics, apart from other products is Amazon.com. Compared to the online store in this strategic business plan, Amazon.com is more established, and considered the leader in the world of internet shopping. This offers a wide product range, including a variety of electronics. Additionally, the prices at this store are affordable to customers. According to Torabi (2011), Amazon.com offers one of the largest databases of user reviews for electronics products and cleverly organizes the feedback. Most importantly is the how highly Amazon.co is globalized. Most people across the globe have either heard about Amazon or shopped there. Therefore, this does not compare with the online store in this business plan, as this is small and not well-established and globalized as Amazon.com. BestBuy.com is another online store that also deals with a wide product range, including electronics. This store has the best deals on electronics, thus popular among online shoppers. This is also highly globalized, and its customers are drawn from different parts of the world. Additionally, it is easier for different customers to access the website as this is done in different languages, including Spanish and English (Torabi, 2011). Newegg.com also offers low-priced electronics to its customers. The products offered are also wide in range, and offers free shipping to its customers for any product purchased (Torabi, 2011). These three are among the top online stores, which most people identify with. The fact that these stores offer a wide product range attracts more customers, compared to specialized product line in the case of the online store in this strategic business plan. Nonetheless, since all these online stores have a greater competitive advantage, they can be considered the major competitors of the new online store in this context. Nonetheless, in order to succeed in the electronics industry and online market, and compete favorably with top competitors, this online store should develop a marketing strategy. This involves measuring resources of the company and utilizing them to gain a competitive advantage. This also includes different market analyses, which will guide the implementation of strategy. Nonetheless, in this case, a SWOT analysis, which includes the analysis of internal and external factors of the online store will play a major role (refer to Appendix). Although it is advisable to conduct a SWOT analysis after some years in the market, this is important in this case, in order to enhance the successful penetration of this new online store into the online market. Conclusion In order to manage a business or a company, one needs to possess critical leadership attributes. Since an entrepreneur runs the online store in this strategic business planning, the entrepreneur should be a good leader in order for the online store to grow. In this case, therefore, it has been possible to identify three critical attributes, which the leader must possess. The first attribute is realistic optimism. Here, the entrepreneur must have the ability of recognizing challenges in the market, and still maintaining confidence that these will be overcome. Having realistic optimism also means that the leader will set realistic goals for the online store. The second attribute is that of the leader seeing potential in them and in other people. This is important, as it helps a leader to be dedicated to their work. In this case, the entrepreneur will undertake all efforts to ensure the growth of the online store. Thirdly, a leader should find order in chaos. In the present business environment, numerous factors affect a business. When these do, a leader should be capable of finding balance and order, instead of letting these influence the business negatively. Nonetheless, it is important for any leader to possess these three attributes in order to ensure the survival of their business in the present imperfect business environment. Appendices SWOT Analysis This method helps in market analysis, and analysis of the resources of the company in relation to the company’s business environment. Strengths and weaknesses measure internal factors, while opportunities and threats fall in the external environment. Strengths The online store will sell its products at the most affordable price in the market, as these are directly sourced from manufacturers. Additionally, customer service is core to the strategy of this online store, thus this will attract customers and maintain them. Weaknesses There is high competition from the large and well-established online stores, as the online store in this context is still new. Additionally, the specialization of the online store in electronics alone provides a low product range to customers, and this might drive some customers away. Opportunities The online store as e-business, has many opportunities for growth. There are also opportunities for the store to make great sales and profits in the market. The rise in online shopping is a positive influencer in online business, and this store expects to benefit from it. Threats Competition remains a major threat. The competitors of this store such as Amazon.com have stable positions in the market, and this makes it challenging for the store to stabilize easily in the market. In addition, there are no barriers to new entrants in e-business, as setting up internet business is less costly. Therefore, competition for this store remains a constant factor. References Basi, B. A. (2000). Putting together a strategic business plan. Supply House Times, 43(7), 89-90. Retrieved from http://search.proquest.com/docview/220007208?accountid=45049 Canzer, B. (2006). E-Business: Strategic Thinking and Practice: Strategic Thinking and Practice. New York: Cengage Learning. May, G. (2010).Strategic Planning: Fundamentals for Small Business. London: Business Expert Press. Rowley, J. (2002), E-Business: Principles & Practice. London: Palgrave Macmillan Limited. Sandberg, W. R., Robinson, R. B., Jr, & Pearce, J. A., II. (2001, Oct). Why small businesses need a strategic plan. Business and Economic Review, 48, 12-15. Retrieved from http://search.proquest.com/docview/209593326?accountid=45049 Tan, P. (2003). Success with Online Retailing: For Small Businesses. New Jersey: iUniverse. Torabi, F. (2011). Online Shopping: 6 Best Places to Buy Electronics. CBSNews. Retrieved from http://www.cbsnews.com/8301-505144_162-41542865/online-shopping-6-best-places-to-buy-electronics/ Read More