Feasibility of Establishing an Online Retail Site for the Business - Essay Example

Online Retail Store Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 14th September, 2012. Contents Contents 1 Appropriate revenue model for the business 2 Technological infrastructure to be used 3 Benefits and challenges of the marketing and promotion strategy 4 Major hardware and software suitable for the retail business 5 Legal and ethical issues 6 Introduction This report sets out to investigate the feasibility of establishing an online retail site for the business. This will be done in the following way: Investigation and discussion of the advantages of an appropriate revenue model for the business Investigation and explanation of technology infrastructure that will be used in the setting up of a robust scalable website Identification and discussion of the benefits as well as challenges of a suitable marketing and promotion strategy Identification and discussion of the major hardware and software suitable for the retail business Description of legal and ethical issues that might arise in the development of the site Identification of the advantages and challenges of taking the business online and Recommendations for the online business initiative. Appropriate revenue model for the business Solid revenue model are seen as been among the major foundations for sustainability of the business. A clear definition of the revenue model for the retail business will assist the retail in staying focused on the target as well as on the niche market. The model will also ensure that it gives the business a concise foundation for the development of a service and product development plan and a firm foundation for the marketing plan of the retail business (Karl & Meyer 2010, p. 12). There exists various revenue models that are been applied in the modern day business world but not all of them that are in line with each organization. Thus businesses are therefore required to make a selection from the available revenue models so as to come up with the most appropriate revenue model for the business. The most appropriate revenue model that can be the retail stores can apply is the affiliate partnership revenue model. Affiliate advertising is terms incentive that is solely based on the sales performance and the advertisers promote the business products. This is mainly carried out using two financial models that is the cost per acquisition (CPA) or through the revenue share. In regard the this the revenue share seem to be the most appropriate one, in the revenue share model the affiliate earns a certain percentage of the money that the business will earn and this is based on the number of customers that the affiliate will send to the stores (Karl & Meyer 2010, p. 90). Technological infrastructure to be used Technological infrastructures are mainly applied in almost all businesses that have gone online so as to connect all the functions and parts of the firm and link the firm to the customers, suppliers and their allies. Thus an organization needs to invest on its technological infrastructure so as to create value in the organization. The technological infrastructure that will be used in the establishment of the online retail store website includes: the standards and shared infrastructure shared information technology services, human information technology infrastructure and the information technology components (Siegel & Millison 1997, p. 44). Benefits and challenges of the marketing and promotion strategy Marketing and promotion activities are usually carried out so as to increase awareness and buyers of the company’s products. The retail business needs to apply marketing and promotion activities so as increase the customers who are likely to purchase clothes from their stores. There exist different types of promotional strategies that company can adopt and among them is the promotional product. Organizations therefore need to complete the campaign as well as the strategy that is in place. The promotional strategy that can be really adopted by the retail store is follow-ups with the customers. The benefits associated with this promotional strategy is that it tends to attract customers more since they feel that they are valued and wanted in the organization (Porter 1998, p. 78). The disadvantage of it is that some customers are not frequent users of the internet and thus they may not see the follow-up or they may take it with a negative attitude thus influencing on the future purchases of the products. The marketing strategy that is adopted tends to different based on the situation or at times based on the kind of business. The marketing strategy that the retail store can adopt is product differentiation. The retail store can differentiate itself from the competitors in the market by branding its products. The benefit that is associated with this kind if strategy is based on the fact that it serves as a source of competitive advantage for a company and the retail store will be able to compete favorably with the major players in the industry (Hooley, Nicolaund & Piercy 2011, p. 99). The major challenge of the differentiation strategy is that it is costly. A number of differentiation strategies support advanced services, durability, performance and durability and this cost are catered for by the customer of the products. Major hardware and software suitable for the retail business When developing a website for retail business certain software and hardware’s are needed so as to make the website run effectively and to assist in achieving the started business goals. Computer hardware is termed as the physical devise that a person can be able to touch while on the other hand computer software is termed as the intangible components of the computer system. Software is seen as a collection of the instructions as well as code that has been installed in the computer system. In regard to this the monitor and the mouse can be termed as the hardware since they are tangible (Lloyd 2008, p. 18). The operating system and the internet browser that is been used by the users to visits the required pages can be termed as software since they are intangible. The hardware and the software need to work collaboratively so as to deliver the required results though at times a computer can run without installation of some software or hardware but it really depends on the type of software’s that are needed for that particular business. The software’s that will be required are the operating system, graphics programs, office applications and suites, collaborative software’s and utilities and tools. The retail business will also need to have some pricing software’s and software’s that can make used of credit cards, this will ensure that they are able to offer their products to large groups of people who have be in different geographical areas. Dream weaver software would also be used in the creation of the website (Lloyd 2008, p. 20). The hardware’s that are suitable for the retail business includes a mother board it acts as the central circuit board that makes up the computer system. The other hardware that is suitable for this kind of business is the output and input devices. They refer to the interfaces that are used by the different functional units to communicate to each other or at times it may be referred to as the signals that are sent though the available interfaces in the computer system. Legal and ethical issues A businessman needs to measure both the negative and positive sides of the legal and ethical considerations when planning to take the business online since it is an important aspect in expanding the outreach of the products that are developed or sold by the business. The most prominent legal and ethical issues that need to be considered in the development of the website for the online retail store are intellectual property, trademarks and licensing (Beaird 2010, p. 67). In regard to these the retail store ought to ensure that all the material used in the website is genuine and they have not in any way or another adopted materials from other websites. This will in turn create uniqueness in their website and it will also assist them a lot in that they will have adhered to all the legal issues which are associated to taking the business online and they will operate freely. Another ethical and legal issue in creation of the business website the business should ensure that the content in the website have not been copied from other sites and they should also aim at introducing a new and creative layout of the website thus they cannot be reported to the authorities or be sued by other firms for copying their content or layout (Beaird 2010, p. 77). Another ethical and legal issue that the retail store needs to consider is related to the software used in the website. The retail store ought to ensure that the software is original and they have not been pirated. Pirating software are seen as been unethical and also one can be charged under the copyright law thus to avoid all these the retail business can aim at using genuine software in their website. Advantages and challenges of taking the business online A number of businesses are opting to marketing their business using online means, this is mainly attributed the advantages associated with development of a website for your business. The fist advantage of taking the retail store online is based on the fact that their organization and the products will over time have a repeated and maximum exposure to the customers and there are no advertisement costs that are associated with it (Siegel 1997, p. 88). Another advantage of taking the business online is more sales which are as a result of automated follow-ups. Taking the business online has another advantage in that it increase the market reach. Most business which has an online presence is able to attract a greater number of customers from the several media that are available in the internet. The media include but are not limited to internet searches, social media such as twitter and facebook, blogs and social book marks. Through this the business will be able to reach more customers and thus make more sales and it could have been if they were offline. Despite the numerous advantages that are associated with taking the business online, businesses are also faced by a number of challenges. In most instances taking a business online enables the business to reach a wider audience, but the start up cost may at times be high. This may be due to the cost of the hardware’s, software as well as the maintenance costs. Another challenge is based on the fact that through a website the business may loss the human touch with the customers. The other challenge is related to technology (Siegel 1997, p. 90). By taking the business online, the business tends to rely heavily on technology and technology is vulnerable to various technical faults. In instances when the site does not respond in the correct manner the customer may feel irritated and may opt to buy products from your competitors. Recommendations for the online business initiative Based upon the outcomes form the investigations that have been carried out the following recommendations need to be taken into consideration so as to come up with a scalable and beneficial website for the retail store. The organization needs to adopt clear mechanisms and policies so as to ensure that the website good management and governance of the website. Good management and governance of a site leads to additional profits in that they will have clear knowledge of what the customers wants and this will be communicated down eventually leading to the provision of better products to the customers. The website needs to be reviewed from time to time so as to link with the strategies that have been laid out by the organization. The website need to be in line with the strategies of that specific organization and thus the managers ought to ensure that website is in line with the core strategy of the business and in instances when it is not alterations need to be done. Another recommendations is the website ought to have enough staff members and they ought to be fully trained and funded, this will ensure that they work to their level best to provide the best to the customers and this will eventually lead to a higher number of customers purchasing form them. Another recommendation is based on ethics. The website that is been developed needs to adhere to both the legal and ethical issues. A great number of people are no longer purchasing from organization that are not ethical so as to attract more customers the retail store needs to perform its operations in an ethical manner. And lastly, the organization needs to ensure that the website have the most current standards. Technological advancements have been on the rise for a number of years now. Some of the standards which were been used previously are no longer applied and if they are they do not perform to the expectations of both the company and the consumers. Thus retail store need to ensure that it uses the most current and up to date standards in their websites. References Beaird, J 2010, The principles of beautiful web design, Site Point, Australia. Hooley, G, Nicolaund, B & Piercy, N 2011, Marketing strategy and competitive positioning, Prentice Hall, New Jersey. Karl M & Meyer, R 2010, Profit from Software Ecosystems: Business Models, Ecosystems and Partnerships in the Software Industry, Norderstedt, Germany. Lloyd, I 2008, Build your own website the right way using HTML & CSS, Site point, Australia. Porter, M 1998, On competition, Harvard business school, Harvard. Siegel, D & Millison, D 1997, Creating Killer Websites, Hayden Books, New York. Siegel, D 1997, Secrets of successful websites, Hayden, New York. Read More