E-Commerce Trend in the Global Retail Market - Essay Example

Research Project Table of Contents Chapter 2: Literature Review 3 2 E-Commerce Trend in the Global Retail Market 3 2 1 Evidences of E-Commerce inGlobal Retail Market 3 2.1.2 Factors Influencing the Advent of E-Commerce in Retail Market 7 2.2 Issues Experienced by Tesco due to Aggressive E-Commerce Trend 8 2.2.1 Increased Cost 8 2.2.2 Ineffective Pricing 9 2.2.3 Organisational Inefficiency 9 2.2.4 Ineffective Promotion 9 2.2.5 Loss of Competitive Advantages 10 2.2.6 Ineffective Global Penetration and Expansion 11 2.2.7 Loss of Market Share 11 Chapter 3: Research Methodology 12 3.1 Research Approach and Design 12 3.2 Data Collection 12 3.3 Data Analysis 13 3.4 Ethical Considerations 13 Chapter 2: Literature Review 2.1 E-Commerce Trend in the Global Retail Market 2.1.1 Evidences of E-Commerce in Global Retail Market According to Eid (2011), the global e-commerce has been in the increasing trend. This increase in the sales of retail products is not only limited to few nations, indeed it is notable among different nations. The report by A.T. Kearney, Inc. (2015) suggests that the countries that have considerably witnessed of the increasing trend of e-commerce include China, US, UK, and Japan. Besides these nations, several other nations have witnessed of increasing trend of e-commerce. These nations include Germany, France, South Korea, Russia, Canada, Brazil, and Belgium, among several other nations. The report by A.T. Kearney, Inc. (2015) also reveals that the US and China are among such nations that have a significant online market size. It is also notable that the UK, Japan, Germany, and France, are also among such nations, which have considerable online market size. A.T. Kearney, Inc. (2015) in its report also suggests that Hong Kong, and Singapore, is among such nations that have a significant infrastructure, which largely contribute to the growth of e-commerce. The other nations including the US, UK, Japan, South Korea, Germany, France, Belgium, Australia, Canada, Netherlands, also have considerable development in infrastructure, which significantly contribute to the growth of e-commerce. In the report by A.T. Kearney, Inc. (2015), the nations such as Denmark, the UK, Germany, South Korea, Hong Kong, Netherlands, and Sweden are considered to possess potential consumer behaviour, which has led to the growth of e-commerce in retail in such nations. It is also notable that the other nations such as the US, Japan, France, Belgium, Australia, Canada have considerable potentiality in consumer behaviour, which has led to the growth of e-commerce market in such nations. However, the report by A.T. Kearney, Inc. (2015) also suggests that apart from China, and Venezuela, very few nations have considerable growth potential in e-commerce retail industry. The underneath tabular description represents the current scenario of e-commerce retail industry in some of the nations. Source: (A.T. Kearney, Inc., 2015) According to the report by A.T. Kearney, Inc. (2015), majority of the nations do not possess a considerable potentiality in e-commerce retail market. This is largely because of the fact that although the e-commerce retail market is growing positively in the global context, but it is in decreasing rate. It is only notable in China, Venezuela, and few other nations, where retail e-commerce market is growing at an increasing rate. The underneath graphical representations depict the global e-commerce sales in retail and the revenue collected by US e-commerce retail industry. Source: (A.T. Kearney, Inc., 2015) Source: (Statista, Inc., 2015) According to the report by the report by A.T. Kearney, Inc. (2015), there are certain retail products, which have witnessed significant increasing trend in the e-commerce market. These products include electronics, different types of services, books, fashion and apparel, music and games, among several others. However, Gangeshwer (2013) conveyed that some of the retail products, which have failed to attract the online market. These include house hold products, grocery products, and products for kids including toys, and others. Some of the other products that have comparatively less market share in online retail market include the sports and outdoor products, beauty or cosmetic products, and home furbishing products. The underneath tabular representation depicts the online market share of different retail products. Source: (A.T. Kearney, Inc., 2015) 2.1.2 Factors Influencing the Advent of E-Commerce in Retail Market According to Augusto & et. al. (2012), there is certain factors that have contributed to the advent of e-commerce in the retail market. Augusto & et. al. (2012) conveyed that one of the major factors is that the customers of the online retail market do have the opportunity to purchase products at any time. This is unlike in the traditional form of retail shops, where the customers are able to purchase products for limited hours in a day. This significantly attracts the customers of retail market to purchase through online platform. Moreover, Ahmed & Ibrahim (2011) also suggested that the retail organisations have the opportunity to access to the global customers, without establishing retail outlets. In this regard, Hasan & Harris (2009) also conveyed that the non-requirement of establishing retail outlets considerably reduces the organisational costs. Eventually, it supports such organisations to gain competitive advantages through reducing the products’ price. Jebur & et. al. (2012) also conveyed that the e-commerce organisations have the considerable opportunity to attain the global retail market at an ease. This significantly encourages the e-commerce retail organisations, which correspondingly lead to the advent of global e-commerce retail industry. Maniam & et. al. (2012) conveyed that the rise of e-commerce in the retail industry from a global perspective is also because of the effective penetration of the internet technology throughout the world. It is notable that a considerable number of global customers have smart phones, or computers, or other devices that supports internet technology. Thus, the easy access to internet technology has been considered as one of the significant factors that has contributed to the advent of e-commerce in the global retail industry. Mohamad (2009) commented that there is another factor, which contributes to the advent of global retail e-commerce. This is the reduction of operational cost due to a major reduction in the inventory cost. This has largely encouraged the e-commerce retail industries to conduct its business process globally and more effective. 2.2 Issues Experienced by Tesco due to Aggressive E-Commerce Trend 2.2.1 Increased Cost Murphy & Narkiewicz (2010) conveyed that one of the major issues experienced by Tesco due to the aggressive e-commerce trend by its competitors is the increased organisational cost. It is notable that the competitors of Tesco have a considerable advantage to of reducing the cost at the minimum possible level. Moghavvemi & et. al., (2012) commented that the organisations that have incorporated e-commerce had been able to reduce the inventory cost up to a significant level. Such organisations also do not have the requirement to establish retail outlets. This has considerably reduced the organisational cost in its business process. Considering such advantages of e-commerce to the competitors of Tesco, it is eminent that Tesco has a significant issue of higher operational cost as comparison to its competitors. 2.2.2 Ineffective Pricing According to the report of Tesco Plc. (2013), another issue experienced by the organisation due to the advent of e-commerce in the industry is the ineffective pricing. The organisations experienced a considerable issue on pricing the products at the level of its competitors. In this regard, Ndyali (2013) conveyed that the reason behind such ineffective pricing by Tesco is due to the high cost of the organisation in comparison to its competitors, which have implemented e-commerce. Such organisations that have reduced operational costs are able to minimise the products’ price. However, the report of Tesco Plc. (2013) suggested that the organisation has not been able to minimise the price due to comparative high operational cost. This eventually has caused a major issue to the organisation. 2.2.3 Organisational Inefficiency The report of Tesco Plc. (2011) also suggested that the organisation has experienced another major issue due to the advent of e-commerce, which is the organisational inefficiency. In this regard, Mentis (2013) commented that the organisations, which have incorporated e-commerce, the customers are able to purchase products in any time and in any date. This largely implies in the improvement of organisational efficiency. However, according to Remenyi & Brown (2012), Tesco do not have such form of facilities to serve its customers in all time. This signifies the organisational inefficiency with the advent of the aggressive e-commerce trend. 2.2.4 Ineffective Promotion Fernie & Sparks (2014) commented that Tesco also experienced ineffective promotion of the products due to the aggressive e-commerce trend. This has caused one the significant issue that have restricted the organisation to communicate effectively with its customers. In this regard, Niranjanamurthy & Chahar (2013) commented that the retail organisations, which have incorporated e-commerce in its business process, are able to communicate effectively with its customers. The reason behind such is that majority of the people in the modern era available in online platform. Thus, selling products to the customers through online platform provides an additional opportunity for effective promotion. Besides this, Teece (2010) also suggested that e-commerce provides opportunity to the organisations to improve the customers’ insight. The customers are able to compare different brands of products effectively. However, according to Zafar & et. al. (2014), such benefits to e-commerce is not experienced by Tesco. Thus, it creates a major issue to Tesco, which restrict the organisation to promote effectively with its customers. 2.2.5 Loss of Competitive Advantages According to Piercy (2012), Tesco has witnessed considerable loss of competitive advantages due to the advent of e-commerce. In this regard, it is notable that the organisations, which have incorporated e-commerce in its business process, have experienced low operational cost. Moreover, Cooke (2014) also conveyed that the e-commerce organisations also have been able to improve its efficiency level due to all time purchase opportunity. Such organisations also have effective pricing strategy and are able to reduce price at a considerable amount due to the low operational cost. These organisations also attain considerable promotion through selling products online. Ndubisi (2013) also suggested that such benefits of e-commerce are not experienced by Tesco and hence, it provides competitive disadvantage to the organisation. Moreover, it is also worth mentioning that the loss of competitive disadvantage is a significant issue to any organisation, which is considerably witnessed by Tesco. 2.2.6 Ineffective Global Penetration and Expansion Laudon (2011) conveyed that the lack of efficiency and the absence of competitive advantages have caused the ineffectiveness of the organisation in global penetration and expansion. In this regard, Whiteley (2013) commented that the retail organisations, which have incorporated e-commerce in its business process, have been able to effectively penetrate and expand in the global retail market. This is largely because the organisations do have to establish retail outlets at different locations. The organisation by establishing limited number of operational centres can effectively penetrate and expand the global retail market. According to the report of Tesco Plc. (2011), this is unlike in this organisation. Thus, it is eminent that the aggressive e-commerce trend by the retail organisations has significantly caused Tesco’s ineffectiveness in global penetration and expansion. 2.2.7 Loss of Market Share The report of Tesco Plc. (2011) suggests that the organisation has lost considerable market share due to the increasing trend of e-commerce in retail industry. It is notable that the organisation has lost significant competitive advantages and revealed ineffectiveness in global penetration and expansion due to the advent of global e-commerce trend. The report of Tesco Plc. (2014) further illustrates that such effects of e-commerce trend have resulted in to a considerable loss in market share of the organisation. This eventually affected the financial strength of the organisation. Thus, it is eminent that the advent of e-commerce industry has caused a major issue to Tesco in its business process. Chapter 3: Research Methodology 3.1 Research Approach and Design For the effective conduct of the current study related to the determination of problems experienced by Tesco due to the advent of e-commerce trend in the global retail market, qualitative research approach is considered as the most suitable (Creswell, 2013). This largely because the study does not demand for the determination of any relation between two more attributes. Thus, qualitative research study is considered as the simplest and the most appropriate approach. Moreover, for the effective conduct of the study both primary and secondary data considered. The reason behind the consideration of the primary and secondary data for the study is that it provides comprehensive research outcome, which would be highly reliable. Furthermore, the current research is designed to interpret and analyse the collected data in a qualitative manner. This eventually leads to the attainment of reliable research outcome (Creswell, 2013). 3.2 Data Collection The data collection in the current study includes both primary and secondary sources. The secondary data are collected from the research articles relevant to the current study. Moreover, it is also worth mentioning that the secondary data are collected from some of the trustable and reliable sources, which include books, journals, and other reliable online sources. In addition, secondary data are collected within 5 years of publications (Patton, 2014). This would provide the research outcome in better relevancy to the current day context. On the other hand, primary data are collected from the 100 randomly selected respondents through questionnaire. However, the respondents for the study exclusively include managers and staffs of Tesco. The reason behind such is that the workers of the organisartions are expected to be more aware of the problems of the organisation from the advent of e-commerce, which eventually supports in deriving reliable study outcome. The questionnaire includes both open-ended questions and close-ended questions (Fanning, 2005). 3.3 Data Analysis One of the decisive steps in the current study is the analysis of the data that are collected from both primary and secondary sources. In this regard, it is important to note that the primary data are analysed in a qualitative manner through undergoing descriptive study, which includes both graphs and charts. On the other hand, the secondary data are analysed through logical interpretations. Moreover, in order to conduct a comprehensive study, both primary and secondary data are inter-related to derive more reliable outcome (Grbich, 2012). 3.4 Ethical Considerations Ethical consideration in a study is extremely important for increasing its acceptability throughout the world. In this regard, it is worth mentioning that both the primary and secondary data collection do not raise any ethical issues. The secondary data do not infringe any of the copyrights violation. On the other hand, primary data collection through questionnaire also does not attempt to reveal any of the confidential information related to Tesco. Moreover, it is also eminent that the overall study does not attempt to raise any of the ethical issues (Hammersley, Traianou, 2012). Read More