Digital Business - Business Expansion Requirement - Coursework Example

Digital Business Digital Business Introduction Business expansion is a risky venture for any business owner. There are both advantages and challenges for business expansion and each of them needs to be looked at critically in order to come to a great decision that will benefit the business (Laudon & Guercio, 2014). A business can expand in four main ways namely, internal growth, external growth, franchising and online growth. Internal growth entails acquisition of better equipment and hiring of highly qualified staff to help boost the quality and quantity of the output. External growth occurs through mergers and takeovers where a business acquires another business in order to expand its physical presence in the market. Franchising on the other hand involves the business leasing out its ideas to other business thereby opening up many branches in various parts. Online expansion of the business entails the business utilizing the internet to increase its popularity on the World Wide Web and get to more clients and customers surfing through the web. All these methods of business expansion require significant consideration before embarking on a journey to expand (Mann, & Sarah, 2000). Before deciding on which of the four methods a business has to follow to expand, the business owners have to first determine whether it is wise to expand the business in the first place. The owners need to assess their interests, the opportunities and challenges available for them both currently and in to the future. Business expansion requires a lot of strategy, planning and vast amount of resources. Some business owners and investors may shun away from the challenge of expanding their businesses and opt to remain smaller. A smaller business is much easier to run and manage. On the other hand, bigger businesses come with their advantages too(Cronin, 2000). For instance, bigger businesses enjoy greater economies of scale which is a huge competitive advantage. This implies that a bigger business can access raw materials cheaply, minimize production costs and gain a lot per unit cost as compared to smaller businesses. The bigger businesses are also in a position to determine market trends including product prices and exerting its influence in the industry and beyond. Business expansion therefore looks a very amazing prospect for most business owners. Without proper planning and failure to put in place structures to manage the growing business, the expansion process is bound to fail sooner or later (O’Brien, &Marakas, 2011). Among the four main ways of expanding a business, online expansion is merging as the best form of expansion. This is because of the challenges associated with the other methods in terms of costs, time, and manpower (Paul, 2000). One also needs to have a huge social pool of professionals to partner with and get advice. These are challenges cannot be overcome by smaller businesses that seek to expand very fast and compete with bigger businesses in the industry (Evans, & Thomas, 2000). Online expansion provides smaller businesses with similar prospects with minimal challenges. The online environment creates a level field for all parties to maximize their online presence, either for free or for some little cash (Rosena, 2000). The business environment in today’s world also seems to be favoring online businesses. Current research indicates that customers often visit the internet to find out more about products before finally making their purchase decisions (Lamont, 2001). E-commerce, which is the practice of buying products over the internet, is also gaining popularity across the globe. The efforts of globalization that aim at creating a world with no geographical boundaries, where people can communicate freely, share ideas regardless of their distance, are also playing a major part in promoting online businesses. How to Expand the Business Online For this business, dealing in computer sales as well as offering hardware and software solutions, online expansion provides the most viable option for business growth. In order to expand the business on the internet, the business owner has to consider various issues such as restructuring the company website to provide more information to visiting clients as well as making the website more interactive. The websites acts as a major tool of communication as well as an important tool of information about the company and its products (Chaudhury, &Kuilboer, 2002). The business should therefore be redesigned to contain information about the company, its owners, the products and services offered by the business, both online and offline contacts of the business such as email addresses, social media links, and telephone numbers. The email address of the business should be changed to include the suffix .co.uk, just like the company’s website. This will make the email address more authentic and official for business interactions. The website should also include a blog which will contain informative articles about the company, its products as well as industry trends. Another important element that should be incorporated to the website is a list of current clients and testimonials from the clients. This can be an important marketing strategy for the business, if potential clients can access views of other clients concerning the services of the business (Tkacz, and Adrian, 2009). Apart from the website, the business should also incorporate other significant online strategies that will accompany the website to facilitate online activities of the business. First, the business has to be present on major social media networks, where most of its clients interact. Some of the biggest social media websites include Twitter, Facebook, Instagram and LinkedIn. These social media networks provide the business with a great opportunity to interact with its clients and other businesses. Social media is also a vital marketing strategy for online businesses where the business can reach out to potential customers for its products and services. The business also needs to put in place structures to facilitate e-commerce, where clients can purchase products such as computers and other hardware or software products straight from the company’s website (Kotler, &Kotler, 2012). Ecommerce entails an online payment system and a method of delivering products to the clients after purchasing. With all these in mind, the business owner needs to have strategies in place to increase its online presence. Most of the services on the internet are not charged and with many businesses going online, the competition is stiff. This business therefore needs to make sure its website stands out from among the many websites on the Web, be active on social media, advance its online marketing strategies through internet marketing techniques such as email marketing, social media marketing, and Search Engine Optimization (SEO) (Trapscott, David, & Alex, 2000). Advantages of Online Business Expansion As aforementioned, online business expansion has its many benefits and challenges. The good news for this business is that with proper planning, the challenges can be trounced to ensure the business continues to enjoy the advantages that come with the online presence of the business. It is important for this business to plan adequately for this expansion after considering both the advantages and disadvantages of online business expansion. Some of the benefits or advantages that this business is likely to encounter with its expansion on the internet include low costs of expansion. Most of the opportunities to expand on the internet come at no cost. Social media networks for instance are free as well as other marketing techniques such as SEO (Burgess, Sellito, and Karanasios, 2009). The only costs that the business will incur are the website design costs and hosting charges, which are in fact minute as compared to expenses involved in other business expansion methods. Another advantage of going online for this business is the fact that it will give the business an opportunity to function 24/7, that is twenty four hours seven days a week (Eisingerich, & Kretschmer, 2008). Unlike physical businesses that work within fixed timelines of business hours, the online business works beyond the business hours and is accessible any time. Both potential and current clients can access the company on the internet through the website and social media networks. With ecommerce, the clients can make purchases of the products at any time of the day, even when the owner is absent. The other advantage of online business is that the business will be accessible all over the world. The internet will enable the business to go beyond geographical borders and reach out to potential clients all over the world (Kanter, 2001). This would never be achievable with expanding the business physically. The company will become an international brand, beating competition from other local businesses around. This will also be advantageous for the business because the business owner can also manage the business affairs from anywhere in the world. The proprietor does not have to be in the premise for him to run the business as he can access the business from anywhere on the globe. This makes online businesses much easier to manage (Smith, 2001). Online expansion will also make this business environmental friendly. This is because in the online business, the use of paperwork is highly limited as well as saving on energy that would have been spent on visiting potential clients to market the company and its products. This business can benefit a great deal from making marketing newsletters, catalogues and other business writings across the internet without necessarily having to print out copies. Online business expansion provides an opportunity for automation of most of the activities in the business. The business owner can easily automate payments and order placements, inventory management as well as customer support. This will help the business to manage its increased clientele without necessarily having to incur cost of hiring new employees. With an online presence, the business will have a professional face added to it. In the twenty first century, a majority of the world population have access to the internet. This implies that most of the company’s clients are already using the internet for other things, so it is only prudent if the business expands its online presence to reach out to these customers (Miller, 2002). Since most of the business expansion opportunities on the internet come at a lower cost or in most cases free of charge, it would look a little bit lazy and unprofessional if the business didn’t take this opportunity to expand across the internet and reach out to new people. Disadvantages of online Business Expansion Despite being very attractive in terms of the benefits online businesses enjoy, they also have their own share of disadvantages and challenges. One of the prime obstacles to doing business on the internet is security (Beynon-Davis, 2004). Security is a general term that includes all threats that a business is likely to face while doing business over the internet. This could be challenges with information security, viruses that can attack computer hardware and software, as well as privacy concerns. Information security challenges step in when the business uses third party applications to supplement its online presence through service automation (Gerstner, 2002). This poses challenges with regard to the information stored on the applications including both client and business information. The other security challenge is viral attack. There are many viruses in the internet that can attack vulnerable computer systems, thus making them operational. This can adversely affect business operations. There are also privacy concerns since most of the information on the internet is for public scrutiny. This poses security challenges in terms of how the public will use information such product information, client information or business information that is accessible to everybody (Kerin, 2012). Some competitors might take advantage of this information to outshine the business in terms of online presence. Online businesses also encounter challenges with websites crushing or if the internet goes down (Bonnet, 2000). This can cost the business a lot even if it is just for a few hours. On several instances, websites crush and internets become slower. The business owner will have to be very patient during such occasions and will need to seek knowledge from technology experts in order to restore business operations (Westfall, 2010). The other challenge is competition. Since most of the services on the internet are free or come at relatively lower costs, many people and businesses continue to take advantage of this situation and make use of the internet for their own benefit (Hochbaum, Moreno-centeno, and Catena 2011). This creates a highly competitive environment for conducting business. In the beginning, the progress may seem low and discourage someone but persistence is the key to it all. Business owners that do not have persistence and perseverance as a value are likely to have it rough expanding their operations across the internet. The plan for e-business and digital marketing Without a proper plan, any attempt to venture in to the online business environment is likely to be futile. The internet has so many people trying to outmarch each other and all it takes is proper planning and management skills as well as some persistence for one to succeed. A good plan for the e-business should include short term and long term goals and objectives, the SWOT (strengths, Weaknesses, Opportunities and Threats) of the business, its target clients and how it is going to reach out to these clients through digital marketing (Adcock, 2001). A sample plan for this business is as illustrated below Long Term Objective: To be one of the major suppliers of computers and computer services in the UK and all over the globe Short term objective: To increase the firm’s clientele in a bid to boost productivity and increase output of the business SWOT Analysis The business has various areas of strength including the willingness of the business owner to go ahead with the expansion plan, availability of the required resources such as computer skills, computer hardware and software and internet access. The weaknesses for the business include its small human resource, and the smaller size of the business with limited financial resources for physical expansion. Among the opportunities available for the business includes access to consultancy services such as this one that will enable the company maximize its potential, and the availability of the internet. Threats on the other hand include issues such as the security concerns that are associated with expanding the business on the internet. This SWOT analysis enables the business to assess itself and look at its external environment so as to have a lucid view of how both the present and future prospects look(Frieden, & Roche, 2006). With this analysis, the business will seek to maximize its strengths and opportunities while limiting its threats and weaknesses. Target Clients The business aims at reaching out to all computer uses in homes, offices and schools who need either laptops or desktop computers, or any hardware or software application to accompany their computer systems. The target markets will mainly be schools and offices and individuals who wish to own a computer. Digital marketing strategies The marketing strategies for any business are the main determinants of whether the business will fail or if it will benefit from its expansion program. A digital marketing strategy for this business includes all efforts to create awareness of the business and its products across the internet (Goldstein, & Lee, 2005). This business will mainly rely on the following strategies to market itself and its products; The business’ website This will be restructured to make it more interactive with all relevant information that prospective clients may need. Search Engine Optimization (SEO) After reconstructing the website for the business, the SEO techniques will be brought in to drive sufficient traffic to the website, through ways such as article submissions to online catalogues, directory submissions, and online press releases. Email marketing This will involve sending marketing emails to current and potential clients with promotional messages that provide up to date information about the company and its products. This can be done through online newsletters Social media marketing This includes marketing the business and its products on major social media platforms such as twitter, Facebook, and LinkedIn. This will be an excellent approach to interact with both current and prospective clients of the business Blogging This entails writing articles about the business, its products, and the entire industry in general providing information to the readers thereby bringing in more traffic to the website. The Possibility to Cooperate with Bigger, online Intermediaries There is always an opportunity to cooperate with other online companies that are in the same industry in order to benefit both businesses reach out to new clients. When this business gets such an opportunity, it should take it as this will be one way of accelerating growth on the internet and establishing strong professional relationships. This business can benefit a great deal from such arrangements as it paves way for the business to reach out to new markets (Amor, 1999). The bigger online companies act as intermediaries for small companies to develop and raise their online profile. There are three main different categories of online intermediaries namely the intra, inter and extra businesses. Intra businesses are those that are in the same industry with the business and mostly within the same location or with similar interests. Cooperating with such companies on the internet raises the profile of the business in the eyes of the clients as a very authentic business that clients would be willing to be associated with (Plant, 2000). Extra companies on the other hand are online businesses in other industries, but whose products and services are related to the industry of the business. Linking with such companies exposes the business to new markets and creates an opportunity to get more clients in areas that it would never have reached. The inter companies on the other hand are intermediaries that deal with products and services that cut across various industries. Cooperating with such companies will also expose the business new fresh markets on the internet (Badger, 2013). For this business, cooperating with bigger and established online intermediary companies such as eBay, Yahoo! Amazon, Apple Inc. among others can be a great opportunity for the company to accelerate its growth on the internet Conclusion In spite of the challenges identified earlier in relation to expanding the business on the internet, this still remains a vital step for the business to take. 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