Integration of Web Technologies with Business Models - Essay Example

Table of Contents Pages Introduction 2 Internal and external analysis 2 SWOT analysis 2 PESTLE analysis 4 Porter’s analysis 6 The E-Business for Improvement of business Operations 7 Online Consumer behavior 8 B2C website model 9 The dell business model 10 E-Hubs 11 The NMA e-business strategy 12 Improvement of competition 12 Electronic data interchange (EDI) 13 The ways that e-business and e-commerce can support the improvements 14 Electronic commerce 15 Advantage and Risks of Implementing E-Business and E-Commerce 17 Conclusion 18 Bibliography 19 1. Introduction In order to capture and compete in the global market it is essential for a business to create strategies for development of e-business. E-business refers to the company run on the using internet technologies to promote the profitability of the business. Although, there has been a failure of various electronic commerce initiatives but e-commerce is still of significant use to the economy of many companies. To understand the importance of the e business in the company, the case study will focus on the Gulf Agency Company that is a global leading provider of shipping and logistics materials. However, the company does not utilize the e- business modules in an efficient and effective manner due to the challenges and threats in the industry. The case will evaluate the areas of weakness of the Gulf Agency Company due to the failure of utilizing the e -business and discuss the various e business modules that it can employ to improve the situation. Meanwhile, the case will articulate its failing of the company based on the e-business can evaluate the areas for growth and development. 2. Internal and external analysis of GAC 2.1 SWOT analysis The SWOT analysis of the GAC will help in highlighting the areas of the business inefficiencies and ineffectiveness in its current business processes due to lack of an efficient and effective e business. In order to implement the e business in the company current situation is vital to emphasize thoroughly on evaluating and monitoring an internal look of the strength and weakness of the company. Meanwhile, it is crucial to evaluate the external look of the opportunities and threats that may arise in the process of implementing or using the e business (De Wit, 2003, P. 56).Thus, the SWOT analysis assist to examine the effectiveness of management providing clear comprehending of the e business before any action is taken. The process of undertaking internal analysis closely parallels of performing external audit that is done by the company’s representatives, managers and employees. The internal look analysis is based on the management, marketing research and development and the information technology system. The significant source of the strength of the GAC in its business operation is the availability of adequate financial resources and well trained staff in functional area strategies. However, instead of the company concentrating too much on its strength it is vital to look for the weakness that would diminish the organization ability to offer quality products and services. Most of the weakness of the GAC business operations arises are recognized from the perspective of the customers so that to have an honest evaluation of the failures the company is facing and will affect the future of the company. The company is currently facing the weakness of not having a proper management system in that time and balanced scorecard has not been incorporated with the tailored training of the business that make it prone to challenges. Meanwhile, in current company’s research shows that to combat the difficulties of economies of scale the company needs expansion in its business portfolios so that to reach a wider market by way of diversification of products in the market and doing mergers. Further, the interview conducted on its employees revealed that there was an inefficient and ineffective of the e-business techniques that caused problems in outsourcing. The company needed to implement outsourcing approach across the branches throughout the world to reach its customers. The outsourcing strategy would reach global customers without them refusing the services that exist in other geographical region in the business portfolio as to maintain the company in the strategic position. Moreover, the external analysis of the company includes the economic, political, economic, social and technological factors (PEST). By analyzing the impact on each key external factor on the business, the outcome can be used to take advantages of opportunities like e-business and make contingences for the threats that may arise. The external factors offer the basis for the company to make a decision o whether to take the action in embracing new opportunities that will help in improving the situation in the company. Thus, opportunity should always offer a competitive situation that can be achieved and they consist of having a global outreach to maintain the global customers. Meanwhile, opportunities provide service to clients with multiple ranges of services using various portfolios that other rival firms are not utilizing in the global market. 2.2 PESTLE analysis GAC management believes threats are out of hand span and like other worldwide business, GAC encounters fierce competition in various regions, technological changes, and exposure of global recession. These factors can help the company to consider opportunities to reach the unmarked strategies locations because they can help in contending against the adversaries in the business operations. The company has a strong platform of the e-business modules that help in environmental solutions via technological mobility. It comprises high speed internet connections and computer tools to connect the company with the global market. However, the inefficient and ineffective manner in which the company utilizes the e-business has led to lack of awareness within the management using technological tools. The company has created the management ability to meet new technological advancement that has helped the company to solve the environmental problems vial technology means. The accessibility in a ship to shore communication has faced problems due to server limitations as a result inefficient and ineffective manner in which the electronic commerce is implemented. The company requires technical investment on the logistic and solution that will help in opening new channels of marketing and managing. The company has suffered lack of adequate development of the investment in other regions due to lack of adequate advanced technologies. The significant threat of the technological factor in the company is that the infrastructure in the company is not matching with the shipping technology. Meanwhile, there is a threat in the incompatibility of information technology in various industries in the company such as shipping, airlines and logistics. However, the company has potential technological advancement communication opportunity in the automation of the equipment mobility via a strong information technological infrastructure. On the social factor, the company has formulated effective policies and procedures that promote positive ethical standard throughout the business operations. This has promoted building a relationship with buyers and suppliers via long term commitments and encounter transactions. The company has introduced internal training via opening academy that offers employees skills and knowledge about the various operation areas of the company. However, the training has lacked leadership training in some regions due to inefficient and ineffective manner, in which the e-business is being utilized in the training academy. Meanwhile, the employees work for long hours due to lack of effective way of management of the time and the problem requires the change of roster for operation staff to reduce the overworking. Meanwhile, there is a lack of long term training schemes during the academy courses due to lack of efficient incorporation of e-business techniques in the training courses. Meanwhile, the company faces less performance measurement in some of the branches that have affected the profitability and effective gains of the company that requires the company to improve in its time and balanced scorecard. The company faces racial boundaries in some culture that affect the marketing and outsourcing of its products in these regions. The political environment in the GAC has promoted full benefits of competitive advantage in regional and company level. Meanwhile, it has created health relationship with other countries, and has created full assistance to authorities in terrorism related issues. However, lack of involvement in some local council’s activities in some region is not consistence with the company’s relationship and attitudes. There is a threat from unfair training that exists in some regions that influence profitability and gains of the company. On the economic issues the company has adequate access of capital because it is at a better position of securing world business contracts with key oil producers. However, due to the reduction of the profitability and gains, the customers demand to reduce service quality against management policy of the company. Meanwhile, the sales generation is reduced due to the bulk state of the sector that affects the production activities in the company, and creates stiff competition from other countries. Thus, the wide range of products from other rival industries affects the customer’s consumption and the economic growth in various regions. 2.3 Porter’s analysis Borgatti and Foster (2003, P. pp.991-1013) indicate that the concept of a five porter forces analysis is a useful tool in strategic management critical to the progress of the organization. By introducing the right porter forces in the right way, GAC can make a difference and bring an outcome of success to any twenty first century business disciplines. Thus, GAC can measure the firm’s attractiveness for exit or entry, analyze competitive trends and formulate future strategy by help of the porter forces analysis. The availability of substitutes for the GAC’s products and services has affected the power of the company in the global market . Globalization should always provide a competitive advantage that can be defended. GAC substitutes environment provide global outreach that assist in maintain the bargaining power of buyers. It also provides service to consumers with a range of services using various portfolios, unlike its rival firms. GAC management believes entry threats exist within out reach of a hand span and as like other global business. A significant logistics firm operated within similar cost, and was associated with the government’s regulation of prices that offer little incentive for the logistics to reduce costs. Therefore, for many products, customers demand more of the differentiated feature as the price increases that provide unique opportunities for substitute’s entry. The GAC has invested large financial resources in the IT infrastructure in order to create a barrier to entry, and increased the cost of entry that has increased capital requirement. The decrease in unit costs of logistic products has given the company economies of scale advantage that force the entrant to accept the cost disadvantage in the market. This will be essential if the GAC agree to diversify or vertically integrate in the future so that it can share operations and reduce the cost. The structure of the company in ten years to come will depend on the strategy that GAC choice to apply in order to have a competitive advantage in the market (Bowles, 2011). Buyers and suppliers are central to everything that GAC do, and they demand competitive solutions that drive the industry to refine integrated services to meet their needs. The company should implement cost reduction strategy with experience will help the company to meet the rival demands in order to attain the competitive advantage. Thus, the SWOT, PEST and porters analysis of the GAC indicate that there is a need of improving the situation its business operations via incorporating the e-business and e-commerce modules to its business operations. 3 The E-Business for Improvement of the business Operations The e -business enhances the organizing effort of the company to produce and sell through the internet, for effective gains, the products and services that satisfy community needs. The new advances used together with e-business open channels for the ability that the GAC will considers utilizing improve the existing processes and help to design and develop new ways of conceiving and executing business processes. Thus, e-business provides the most pervasive and disconcerting for of change that will leave no aspect of managing of GAC untouched. Because it challenges the existing business models and organization leaders that had difficulties in their experience to manage the company’s effects like the case of the training academy in the GAC. E-business comprises the capacity of the company to connect electronically, in various ways, many organizations, both internal and external for many diverse purposes. It will allow the GAC to execute electronic transactions with the suppliers, logistics providers, wholesalers and customers. These will solve the problem of sales generation and reduction of consumption due to services and product delivery delays. The e-business will allow the GAC to establish real time connections effectively among entities for some specific purpose like maximizing the flow final products via the supply chain. The improvement of the business operations in the GAC will raise a number of critical business issues because e-business helps in generating distinct knowledge issues and challenges targeted to the e- business transformation of processes. The e-business can change the consumer behavior of the GAC in the different regions that prefers the consumption of the rival’s products and services. 3.1 Online Consumer behavior The lack of adequate profitability to sustain the productivity of the GAC in some regions led to change of customer’s behavior towards their products. The company started charging more for the same commodities and quality reduced in order to stand the shocks coming from the global market. However, the use of the e-business can improve the productivity and profitability of the GAC because it will understand the consumer perception on the effective of web site design. The information that GAC will post in the website will influence the decision aids and information load on consumer decision making behavior. The company should avoid posting a large quantity of information on web site because it will not necessary improve decision effectiveness of the consumers. The company should focus on trust in online consumer experience because developing confidence via building measures in the web site. This will make consumers to trust the web site and start sharing their information and purchase product online. Developing secure models of conducting online transaction and assuring the privacy of information will build trust of customers that will influence their decision to make an online purchase despite, the current situation in the market. In order to understand the views of the consumer behavior on the effective of web site, the GAC conducted the survey to identify the key site features that attract their attention. 3.1.1 B2C website model The management team of the GAC wanted to test the efficacy of common recommendation for designing effective B2C web sites to monitor consumer behavior of its consumers. The management team created a survey questionnaire based on the items based on the items suggested by prior research and practitioner articles. The survey was administered to a convenience of 300 individuals and statistical analyses were done on 200 responses that were found usable for analysis. After the survey was conducted, the result suggested that five broad dimension of business to consumer web sites and they included the number of specific traits that competitively formed the larger dimension. The survey indicates that the content of a B2C web site plays a significant role of influencing the purchase decision process of a consumer. It indicates that online consumers are attracted to a B2C site because of its contents and they decide to make an online purchase due to the search costs involved in finding and researching the product in a different site. Therefore, GAC decided to create a B2C web site content that will allow their customers to locate and select the products that best satisfies their needs in an effective manner. The richness of product information displayed in a web site influences the online behavior of consumer because it will capture the diverse range of products of the company that will enhance their profitability. The content of the web site will improve the service of the GAC online retailers that will win customer orders in the same way a pure internet online retailer could perform. The GAC should consider the design of the content of the web site that is presented to the customers. Meanwhile, the company should consider the security of the web site that they design to win the customers loyalty. The effectiveness of the web site will based on the tools and procedures that will offer strong security to customer users and technical advancement have been made to strengthen the security of web based transaction. Other examples of the offline payment models in case the customers want to make online transaction include telephonic transactions or through checks. Thus, the four dimensions that include content, design privacy and security are the key factors that positively influence the web site users. By implementing the B2C web site models, Model improved the profitability of the GAC because of the increase of sales via online purchases by the consumers. 3.1.2 The dell business model The GAC can also implement the dell business model to improve the profitability and effectiveness of its operations. The problem the company has with the information technology due to lack of advanced computers can be solved by the use of dell models. In this model, the company will place orders for the computers it requires implementing in its operations that will improve the time and money. The model via the process called just in time manufacturing will reduce the waste produced during the process and improve productivity by the use of only required inventory on hand when it is needed for business operations. The model will improve the delivery of the finished goods to consumers because products are shipped as soon they are manufactured. The implementation of the dell model in the GAC operation will improve the development of the investment in other regions that lagged behind due to lack of adequate advanced technologies. 3.1.3 E-Hubs The electronic hubs are the e-business web site that is used to bring the buyers and sellers of the particular company together (Bhasker, 2009, P. 15). The model will be used to improve the poor relationship of the GAC suppliers and consumers that existed due to lack of close contact. The model will improve the transaction within the company and will charge a transaction fee for the purchases done by the consumers. The fee charged will improve the effectiveness gains and profitability of the company that will improve the perception of customers that was before reduced in some regions. The Hubs model will decrease transaction cost by aggregating consumers and the company in an electronic market, and will create value to the parties involved. The model will improve the research method used by the GAC to search for the reduced costs, standardizing systems and improve marches for both parties that will enhance the productivity of the company. Thus, Hubs will allow transfer of information like credit checks, product descriptions and analysis to be transferred quickly that will facilitate the effective gains and profitability of the company. Thus, the e-business strategies and models will help the GAC to improve its customer behavior that will change their perception on the company and start purchasing their products. Meanwhile, it will improve the technology advances used in various regions that will enhance easy communication among the regions. The e-business improves the competitiveness and outsourcing of the company that improves the effective gains and profitability of the company in its worldwide outlets. 3.2 The NMA e-business strategy The NMA e- business strategy has been improved as a strategic basis to develop the business and firmly position it is operating in the new information economy. The strategy was transforming the business at all levels, culturally, technically and commercially. Thus, the racial boundaries in some cultures of the GAC and the technical problems it is experiencing in the technologies will be solved by the e-business strategy. The NMA e-strategy will create an environment in which it will successfully deliver its strategy for the GAC business operations. The strategy will require the top management team to clearly articulate the vision, goals and values of the organization and to communicate them clearly business wide. Meanwhile, it will aim at pulling leadership, communication and engagement of activities in various regions, while, ensuring that all existing projects and initiatives were aligned and integrated effectively. E-business will enable NMA to tap new customers and sales generation of the GAC via opening up a space for importation of private sectors practices into NMA strategy. 3.3 Improvement of competition The company was facing fierce competition from other rivals in the market that affect the profitability of the company as a result of unfair trading in the market. Thus, the internet use and realities of e-business have changed the barriers to competition and by utilizing them the company will solve the problem of competition. Viable competitors, contributed by a legacy system and outdated processes can improve quickly, stimulating the concept of pure competition market orientation. To avoid this situation, GAC should more proactive in adopting emerging technologies for their e business initiatives. E-business model explains who the company’s customer are and how it plan to make revenue by offering them with the value and quality of services whether it is electronic or non- electronic based company. Thus, with the e-business in the GAC, price and quality are not the only determinant of competitiveness from rivals. The business will improve the delivery and customization for which the customers will be wiling to pay for a premium. The e business together with flexible production system like just in time, and flexible manufacturing will make mass customization possible by compressing the time the GAC will be willing to deliver products to customers in various regions. Michael (2003, 105) indicate that the e-business will eliminate the traditional elements in the chain and allow sharing of information about demand throughout the value chain that will help the GAC to plan and control upstream activities. The process will reduce excessive inventory and back order that will shorten lead time to meet customer demands. 3.4 Electronic data interchange (EDI) The interview conducted on the GAC employees indicated that it had outsourcing problems due to the lack of proper e-business approaches in the company. The e-business will make it convenient and efficient way of GAC to share information among different regions in the value chain using the electronic data interchange (EDI) and internet. This e-business model will facilitate outsourcing activities in the company because it take the form of tasks that offer little added value if done internally by doing intensive advertising of logistic products in the market. Meanwhile, the reduction of sales generation due to the bulky of the GAC sector and time consuming because of wide areas to cover and long lead time will be solved by e-business. E-business will compress the time and distance that will make it easier for GAC to overcome national boundaries and outsourcing issues. 4 The ways that e-business and e-commerce can support the improvements The e-business and e-commerce will facilitate the functioning of the business models that will enable the company to use them to solve the challenges in their business operations. Michael (2003, 104) indicate that the e-commerce is selling of goods and services to consumers by the business that is facilitated by use of B2C model. The e-commerce will allow the better availability of service that will allow customers to purchase in their households or anywhere online that will support the online customer behavior. Meanwhile, the e-commerce and e-business will support the implementation of the business models by reducing cost of information processing. This will reduce the cost of processing and retrieving order and customer information that will enhance the implementation of models like dell that helps the company to improve its productivity. The e-commerce will support the online customer behavior by providing the better timeliness of service because the online operations can offer customers 24 hour service for purchasing goods and services. Meanwhile, the e-commerce will provide better access to customers markets in that online operations work everywhere in the world, and opening new and larger markets that will enhance the effective gains of the company. The e-commerce will make the initial cost operations less expensive that will promote the implementation of the business models and strategies in the business operations. The capital operations in e-commerce operations is considerably less because it provides less people, less physical equipment and less paper work in the process of incorporating the strategies and models in the business operations to enhance productivity. Michael and Andrew (2004, p. pp.280 – 289) claim that the e-commerce will offer better purchasing prices from the suppliers because the nature of the competitive environment in e-commerce allows for more pricing information that will result in a decrease in costs to producers. They will provide improved product development for the company because the ability to be online with research and relationship with people from around the world. This can assist to decrease the time to market for new products and the cost of their development. Meanwhile, the e-commerce will support the improvements of the business models and strategy by offering improved scheduling due to the ability to maintain track of product activities in the market. This allows schedulers to be more accurate and timely in scheduling and rescheduling production activities and the reduction of transaction costs. Moreover, the e-business will support better supplier quality because the information driven from the e-commerce environment. This allows customers to learn easily about the material and components quality of the items used to produce the products. Electronic commerce uses information and communication technologies to carry out the transaction among the parties, and various categories of the electronic commerce can support the improvement of the business via implementation of e-business. 4.1 Electronic commerce The electronic commerce include business to business(B2B), business to consumer(B2C), consumer to business(C2B) and consumer to consumer (C2C), and are useful for support of the business strategies and models ( Bhasker, 2009, P.7). Electronic commerce technology can be used for streamlining the internal process of an organization to derive all the same benefits that are likely to outstand in any inter organizational system. It will reduce friction and internal overheads cost called intra organization electronic commerce that is meet to improve management to employee’s relationship that will improve the profitability of the company. According to Bhasker (2009, P. 7), the B2B electronic commerce enhances inter organizational interaction and transaction, and requires entities interacting with each other to promote the improvements of the business operation via e-business incorporation. The intermediaries in B2B electronic commerce can be market operators and directory service providers, who help in matching consumers and sellers in striking a deal that, will improve the profitability of the company. Meanwhile, they can be used to facilitate almost all facets of interaction among sectors, such as channel management, inventory management and deliver and payment management that will enhance the effectiveness of the company. The B2B electronic commerce can be supplier centric, buyer centric or an intermediary centric (Bhasker, 2009, P. 7). In the supplier centric model, a supplier sets up the electronic commerce marketplace where various consumers will be free to interact with suppliers. The model is performed by a dominant supplier in the domain of the product it supplies, and supplier may provide customized solutions and pricing that will fit the consumer. In the buyer centric electronic commerce centric electronic commerce, the substantial businesses with high volume purchase capacity form an electronic commerce marketplace for purchase and attainment by opening a site on their own (Bhasker, 2009, P. 12). Thus, the online electronic commerce market is utilized by the consumer for placing orders on online that improve the entire purchase process that improves the business operations of the company. Meanwhile, in the intermediary centric electronic commerce, the third party sets up the electronic commerce marketplace and attracts both buyer and sellers business to network with each other. Both parties benefit from the enhanced options in terms of pricing, quality, availability and delivery of goods that will improve the productivity and profitability of the company in the global market. The model assists in reducing the need for consumers and sellers to contact a large number of significant partners on their own because it promote connection of several parties via its database. The electronic commerce will support the improvement of the company business operations via e-business strategies and models because it provides a range of commodities and prices. Thus, it reduces the bargaining time and enhances the flexibility for access of products and consumers that promote the profitability of the company. 4.2 Advantage and Risks of Implementing E-Business and E-Commerce The implementing of various e-business and e-commerce models in brings change in the business operations of the company faces security risks and potential benefits. The e-commerce is offering a wide range of benefit to organizations in terms of security because it creates password that are used to protect the information posted in the website. Michael AND Andrew (2004, p. pp.280 – 289) indicate that the e-commerce offers cost reduction that provides the company security from not suffering from loss as a result of high costs of production and marketing. Meanwhile, the e-commerce allows companies to provide their consumers to design a product according to legal requirements governing the process. The consumers are authorized to select certain standardized components and build up products that can perfectly match with their imagination. The privacy of the content posted in the website can be interfered with by the rivals that can jeopardize the company’s image. The online merchants are not expected to reveal the type of antivirus used, but a security policy should explain what protection is in place when customer’s orders are being processed. The security policies comprises details on what data is collected and why, and explain how customers can change, update and delete the stored information. The security threats are the reason that e-business owners should minimize the opportunity for any type of security interference that may threaten success. Thus, before determining how to create a defense plan against security threats, companies should learn what to expect. 5 Conclusions The e-business and electronic commerce are vital components that can create a significant change in the business operation of the company. The incorporation of various-business strategies and models in the case of Gulf Agency Company has helped to improve the consumer purchasing and competition from the rivals. This has helped the company to recognize the significant of incorporating e-business efficiently and effectively. Meanwhile, security policy surrounding the e-business and electronic commerce make it safe for companies to post their content in the web site that promote their products in the global market. Thus, e-business is extremely a significant tool for development and improvement of the business operations of any company at a different level of growth. Bibliography Bhasker, B. 2009, Electronic Commerce, Tata McGraw-Hill Education, New York. Borgatti, S and Foster, P. 2003, “The network paradigm in organizational research: A review and typology,” Journal of Management, No.29, pp.991-1013. De Wit, M. 2003, Strategy: Process, Content, and Context. Thomson Business Press, London. Michael, S.2003, E-Business Management: Integration of Web Technologies with Business Models, Springer press, New York. Michael, T and Andrew, M. 2004, "SMEs and e-business," Journal of Small Business and Enterprise Development, Vol. 11, no. 3, pp.280 – 289. Read More