E-Commerce Business Model - Coursework Example

?E-Commerce Business Model By Table of Contents Executive Summary Without a doubt, at the present information technology plays a significant role in all the areas of life. It has not only modernized the way we live in this world but also improved the way business organizations carry out their tasks. This report presents an analysis of an e-commerce business. In this report I have chosen an online business known as GAP enterprise. This firm uses its web based platform to sell high quality dresses and fashion accessories to a wide variety of customers. In fact, the business has been making a profitable use of its e-commerce platform to attract new customers as well as retain existing customers. For this purpose the business model that this business has adopted is known as business2customer (B2C) model. This business model allows GAP Enterprise to perform transactions directly with its customers. The web site contains a wide variety of dresses for both males and females including with other accessories. In this report I will analyze the business structure of GAP Enterprise by paying a particular attention on its e-commerce business. In this report I will discuss its e-commerce model and how it makes use of its e-commerce business to attract its customers. In this report I will present some of recommendations regarding e-procurement, e-marketing, and improvement of online ordering and for Internationalization of the GAP website. Introduction In the past few years, traditional business practices have been replaced with modern and innovative business environment. In this scenario, e-commerce is a very attractive trend that has attained the attention of the majority of business organization. Basically, e-commerce is a way of carrying out business tasks using the Internet or over the Internet. In this scenario, business and customers can communicate with each other. There are so many benefits of using an e-commerce business platform (Laudon & Laudon, 1999; Turban et al., 2005). This report will present a detailed analysis of an ecommerce platform. For this report I have chosen GAP’s e-commerce platform. Basically, this firm uses a business2customer business model for attracting different customers. In this report I will present an analysis of its different aspects. Though, the GAP Corporation is a web based e-commerce platform however it also works through a physical store can provide its customers with a wide variety of products varying from outfit and accessories such as head to toe with a well established brand. In addition, GAP Enterprise is aimed at offering and meeting the customer’s requirements and expectations in a unique manner. Thus, currently the GAP has also established the business offering a full range of “accessories and furnishings” for business customers to individualize their home, with a unique style of living and wearing. This report presents a detailed analysis of GAP’s e-commerce platform, e-commerce model and major recommendations for e-procurement, e-marketing, improvement of online ordering and for Internationalization of the GAP website. Figure 1Web site of GAP Enterprise, Image Source: www.GAP.com Organizational Overview Gap Inc. is a well-known retailer which presents a wide variety of accessories, clothing, and personal care products specially designed for women, men, babies and children under the Gap, Old Navy, banana republic, Athleta and Piperlime brands. Additionally, the staff working at Gap Inc. consists of more than 132,000 people. In addition, it has more than 3,000 corporate stores and more than 250 franchise stores all around the world. Some of the well-known brands of Gap Inc. are: (Gap Inc., 2012) Gap GapKids babyGap GapMaternity GapBody Banana Republic Old Navy Piperlime Athleta Figure 2 A Banner to Attract the customers Attraction for Customers GAP Inc. offers a wide variety of accessories and dressing styles developed through high quality fabrics and materials. Historically, this business started by offering outfit and accessories from head to toe, however at the present it offers all types of living and wearing products. In this scenario, the majority of GAP products are developed in-house using sellers from the banana republic as well as a number of other high quality vendors. Additionally, GAP basically is aimed at offering lifestyle clothing to customers, offering them innovative and related products to facilitate them to produce their individual style or fashion. Presently, the GAP is basically targeting the 18-35 year old urban professionals, who want to buy Gap’s products and are looking for high quality. In addition, this business also offers the similar home accessories and furnishing products that fit with GAP’s target lifestyle customers (Gap Inc., 2012; Gap Inc. 2, 2012). Figure 3Different Accessories offered by GAP E-Commerce Business model of GAP A business model is a way of generating revenue or income (Savarese, 2006). Basically, an e-commerce model refers a wide variety of revenue streams that a business can set up and how each can help earn money (Obringer, 2010). In addition, the firm uses a business model to drive its business strategy or a plan for a business or website to generate income. Additionally, there are a lot of different types of business models for instance, the advertising revenue model, contextual advertising, direct advertising, selling your products or services directly, premium subscriptions, and affiliate marketing (Carter, 2005; Swift, 2010). Figure 4Role of a Business Model [source: http://www.quickmba.com/entre/business-model/] In view of the fact that GAP Inc. is using its e-commerce platform to perform transactions and deals with its customers directly so its business model is known as a business2customer business model. Currently business is using the billboards, magazines, mailers, and promotional material for the demonstration of the GAP business versatile and cost efficient nature. In addition, Gap Inc. uses its e-commerce platform to some extent deal with other businesses and retailers so it can also use business2business model (Gap Inc., 2012; Gap Inc.3, 2012; Gap Inc.4, 2012; GapInc.5, 2012; Vaskelis, 2001). Business customers GAP Inc. is basically aimed at targeting the business market of people interested in living style and wearing accessories. In this scenario, the GAP Inc. covers the business market with the target customers of age 18-35 years. The business has also issued some of the living style options for children and mature people. The basic aim of GAP business is to target overall customer market by offering all types of facilities and products at single place. Thus, with this intension GAP business has started the projects and business stores that offer lifestyle home accessories, wearing and furnishings products (Gap Inc.6, 2012). Figure 5Extraction from GAP's Web site Analysis of the E-commerce Business Model In this section I will analyze the e-commerce model of GAP Inc. using a framework of Timmer’s 8 Key Elements: (Laudon, 2011; Timmers, 2001; Chaffey, 2008) Value Proposition: The GAP Inc. offers a wide variety of causal and party dresses for different women and men. These all kinds of dresses are developed through high quality material. Market or audience: GAP Inc. deals with a wide variety of audiences with a large number of people all through the world. The main target market of GAP is both male and female of 18-35 ages. Revenue models and cost-base: GAP is making use of the B2C revenue model for the sake of online business management. Competitive environment: GAP is presently offering a great deal of support for online shopping of a wide variety of dresses. It involves online dress selection and assessment also price analysis. It is more effective than its competitors. Value chain and marketplace positioning: GAP positioned its brand as a quality based product with more and more emphasis on the latest designs and fashion innovations. Representation in the physical and virtual world: GAP is offering and promoting its brands through more and sophisticated designs and styles. In this scenario, it presents image of GAP as a more stylish and enhanced brand in the market. Organizational Structure GAP is presently running a private venture with a hierarchy of management. GAP has a CEO with all powers and management control. Management: GAP was managed through a complete board of management and administration staff that controls staff management, marketing, sales and supply chain processes. Recommendations for e-Procurement GAP Inc. basically needs to catch customers’ attention by centralizing the customer focus on business brand differentiation. In addition, the GAP marketing management needs to pay more attention on brand and try to establish a close relationship with the customer’s lifestyle. Here main objectives that need to be established are about the GAP product differentiation among all market companies and this also needs to be imperative to a GAP brand’s success. GAP needs to add the emotional worth with the products to relate it to the business customer’s real life. In this scenario, Gap Inc. should use its web based business as a platform for a constant connection to customers and retailers so that they think of GAP business immediately whenever they hear about its brand and very easy and simple place for e-procurement (Gap Inc., 2012; Gap Inc. 2, 2012; Gap Inc.4, 2012). In case of GAP’s e-commerce business we have many success factors available. For example the business can capture a large number of customers who do not have direct access to GAP business stores. Additionally, it will also allow Gap Inc. to adopt the modern technology to increase business power (Gap Inc., 2012; Gap Inc. 2, 2012; Gap Inc.4, 2012). In order to improve e-procurement functions Gap Inc. should ensure the following functions: Capture new business market Add value to business operations Determine and implement new supply chain management mechanism Enhance business performance Adopt new ways for business management Offer customers a better business and quick place for shopping Capture the whole business market in simpler areas Increase business revenue Offer better market management Try to establish relationships with new market vendors Reduce cost by adopting e-marketing Manage customers’ data in a better way Offering new way of business management Reach and acquire new customers Provide superior service to existing customers Encourage regular site visits and additional sales Measure the results of marketing programs Recommendations for e-Marketing The web site of the Gap Inc. is a main tool for the promotion of its business. This website works as a key tool in an attempt to generate an image of the company to their customers. In this scenario, web site should contain all the information and contents which a customer wants to know while searching and designing their desired product. Gap Inc. should use different ways to facilitate its customers while they use its web site for shopping. Search Engine Optimization Without a doubt, the use of Google.come has become very common in people’s lives and they use it all the time to find different contents or web sites. People prefer to visit if our web site appears on top in response to their search query. Thus, Gap Inc. should implement a search engine optimization strategy through which a search engine displays its web site on top whenever a person searches for dress designing or fashion styles. Affiliate Marketing Gap Inc. should also promote its business through affiliate marketing. Using this marketing strategy they will be able to use their web sites to promote their business. For instance, a large number of people visit many web sites like msn.com, yahoo.com and so many others daily. It can display its banners on these web sites so any person who visits their web site will surely take interest in its banner and would like to explore it further. In this way it will be able to attract a large number of people. Email Marketing Through this technique GAP business will be able to send the advertisement (any banner or ad) via mails to people on their personal email addresses. In this online marketing framework GAP can develop products ads and send them through the email services. Online Advertising The online advertisement will be the main driver of the GAP’s business marketing. Using this marketing technique GAP business can advertise its products through personal web based platform and make the all new promotions visible on the main webpage. Social Networking For the promotion of its business through social media, Gap Inc. can set up a page on facebook. On this page they can describe the products and services and a number of designs. The majority of people connect with each other via these social networks. So if a woman visits and likes its page she will surely talk with other women and relatives and they will connect to our page. Blogs GAP Inc. should make use of blogs technique to make its business popular. Using this technique GAP Inc. can add positive comments to most popular blogging sites so that customers could know better about its business. Recommendations for Online Ordering and Payment In order to improve its online ordering and payment processing system, GAP Inc. needs to focus on a number of areas of its business. I have outlined below some of the major recommendations: International transactions management International currency support Safe and secure information management All types of credit card support capability Fast ordering system Lest complicity in products selection process Easy payment methods Safe amount transfer Shopping receipt 24x7 online customer support Recommendations for the Internationalization of the Site The web based business of GAP Inc. is offering an excellent support for corporate working and business arrangement. The web based platform of GAP can be more internationalized and can offer better support if it offers high quality products at customer’s convenience. In addition, the e-commerce platform of GAP Inc. effective handles Internationalization. Some of the recommendations regarding Internationalization are outlined below: International currency support International courier support International credit card support 24x7 customer support Multilanguage platform support Offer prices and quality according to area Recommendations for the Site Features Given below are some of the major recommendations regarding GAP’s e-commerce platform: Online Communication GAP Inc. needs to improve its online communication of business. The business needs to offer high level features to support communication and distribution of information regarding profiles, transactions, relationship, customer-oriented and knowledge strategies. Universal Standards GAP Inc. needs to apply and follow universal standards all through its e-commerce environment. The effective implementation of universal standards should be a main objective of the GAP business in order to ensure worldwide presence. Richness Richness covers a comprehensive set of aspects regarding online business, website features like communication, information density and presentation style. In this scenario, GAP business needs to take care of all of these aspects for the better management of business tasks and working. In addition, GAP Inc. needs to incorporate a great deal of rich and attractive features to its website for greater customer’s attraction. Interactivity GAP’s e-commerce platform needs to offer a great deal of interactivity. In this scenario GAP needs to establish a great deal of capability by offering more and more interactive user interface that can gain user attention for a long time. Security In the past few years, the security of data and information has become a serious challenge for both the business organizations and customers. In this scenario, GAP Inc. needs to implement effective security and privacy management strategy. Here GAP business needs to better manage the security and privacy of customers’ data and information. In addition, GAP Inc. needs to incorporate superior services and capabilities for better management of the online payment process. In this scenario, security of credit card and other personal details should be ensured using latest security tools and technologies such as SSL, encryption and digital signatures. Market Demographics In order to catch the attention of a large number of customers all through the world, GAP Inc. has to establish an effective marketing strategy by keeping in mind various aspects of demography. For this purpose the business needs to develop and implement different web based portals for different countries/nations. In this scenario the main recommendation is to develop and offer marketing promotions and ads in a much better way. For this sake the business needs to study all possible areas and aspects of the local demography and develop and offer results in a much better way for each nation of the world. In addition, the business also needs to present more enhanced local product specification those well match demographic needs of local citizens. Figure6 demonstrates the example of this concept: Figure 6Attractive Promotion offered by Gap Inc. on different occassions Conclusion At the present, traditional business practices are replaced with modern and innovative business environment. In this scenario, e-commerce is a very attractive trend that has attained the attention of the majority of business organization. This report has presented a detailed analysis of GAP’s e-commerce platform. Basically, this firm uses a business2customer model for attracting different customers and generating income. This report has discussed various aspects in context of Gap’s e-commerce platform. The firm operates its business both virtually and physically. This report has presented a detailed analysis of GAP’s e-commerce platform, e-commerce model and major recommendations for e-procurement, e-marketing, improvement of online ordering and for Internationalization of the GAP website. This report has shown that GAP Inc. is effective using its e-commerce platform to deal with its customers. However, this report has also presented a number of recommendations for the improvement of its business. Reference Carter, B., 2005. The 5 Best Revenue Models in E-Commerce History. [Online] Available at: http://ezinearticles.com/?The-5-Best-Revenue-Models-in-E-Commerce-History&id=102842 [Accessed 26 April 2010]. Chaffey, D., 2008. Online business models. [Online] Available at: http://www.davechaffey.com/E-business/C2-Fundamentals/online-business-models/ [Accessed 18 December 2012]. Gap Inc. 2, 2012. A Message from the CEO. 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