E-Business and Value Chains - Essay Example

?Introduction The phenomenal growth of the new information and communication technology (ICT) such as the internet has dramatically changed the business landscape across the whole spectrum (Cloete, 2001). The advent of the internet has seen a rise in e-business activities between different individuals as well as organisations and these include the exchange of electronic information which is normally followed by electronic payments for goods and services offered. Thus, according to Post & Anderson (2003), e-business is a general term that encompasses business that is done using electronic means and it is increasingly being regarded as a valuable tool for organisations in conducting their business during the contemporary period. As such, this report seeks to critically analyse the extent to which the internet has impacted on the operations of PC World Business through implementation of e-business strategy such as e-marketing. The report focuses on impacts of e-marketing on PC World Business and attempts to address the following issues: 1 How has the organisation’s business changed with the development of the internet? 2 What new opportunities have been there for the organisation to create additional customer value? 3 Assessment of the strengths and weaknesses of the organisation’s current use of ICT tools to support the organisations overall business offering. 4 Suggestions about e-business strategy improvements and alternative ICT tools which could be used to create greater customer value or to help differentiate the organisation from competitors. 1.0 Changes made by the internet to PC World Business According to its official website, (http://www.pcwb.co.uk/, ND) PC World Business was founded in 1991 and it is a computer organisation which is based in the UK and it deals with selling different types of PCs including notebooks, laptops, printers and desktops. The organisation offers a lot of products that are related to information and communication and the use of the internet has significantly contributed to its performance as going to be discussed below. The internet has immensely contributed to the way PC World Business collects, stores and processes information which has significantly impacted on its e-commerce activities. The internet has greatly improved employee performance as well as the company’s marketing strategies used to reach the customers. Through the use of the internet, it can be noted that the customers now have the ability to evaluate products offered while marketers on the other hand are also aware of the impact of new information and communication technology on the way they carry out their business (Robinson, 1997). The internet therefore has a dual impact which is beneficial to both the customers and the organisation. The use of the internet at PC World Business has greatly improved the performance of the employees and the organisation as a whole. Research has shown that that the sales for PC World in 2004/5 were ?1,695 million but they have increased to more than ?2, 000 in 2008 owing to developments in their e-marketing strategies (http://www.pcworld.com/, N.D). Information gathering about the customers has been made relatively easy and it can be processed at a faster speed in order to meet their needs and this is regarded as a basic tenet of marketing. Traditionally, the organisation has been conducting its business using postal services to do all business but due to technological advancements especially as a result of the advent of the internet, it is now possible to conduct any business online where customers can place their orders online at any given time and it is possible to access feedback for 24 hours a day. The organisation now uses a specially designed website which enables the marketers to interact directly with the customers given that a two way communication channel is enhanced and it is also easy to get feedback from the customers. The internet has made it possible for the marketers to obtain first hand information from the customers about their needs hence it can be said that it has immensely contributed to the effectiveness and efficiency of PC World Business in its operations. Through the use of e-marketing techniques such as online selling and advertising, it can be observed that the gap between the consumers and the marketers of the computer accessories has been bridged by PC World Business. The use of the internet has also enabled the company to satisfy the needs of the customers in a profitable manner since marketing communication has been greatly improved. The company is now able to reach a wide range of customers from diverse backgrounds across the whole world. Communication through the internet is relatively easier given that it can reach a wide range of people from diverse locations and it is has made online marketing fast and effective (Kotler, 1999). In this regard, PC World Business has also set its online channels where marketing information about the products offered is readily available and customer queries can be attended to promptly. According to its official website, PC World Business has greatly improved its operations during the past years as a result of the effective use of the internet. 2.0 New opportunities caused by development of e-business strategy to create additional customer value Since the adoption of the use of the internet, PC World Business has been in a position to conduct its business for twenty four hours per day. This has brought a lot of opportunities for the organisation given that business can be carried out any time from any part of the globe and this has significantly contributed towards the revenue generated by the company. McGarvey & Campanelli (2005) suggest that there is a lot of advantages of using e-Business which include the following: it is cheap to operate and there would be likely chances of customer satisfaction since efficiency in information processing would be increased. The internet has also made it possible for the company to directly reach potential customers from different parts of the world which has resulted in the growth of its customer base. The organisation’s development of its e-business strategy and the use of the ICT tools have also contributed towards creation of additional customer value. Business carried online is fast and secure and this has added to customer value of the products offered. The customers have developed a positive perception about the company which has compelled them to value the products and services offered by PC World Business. Value creation among the customers has also been aided by the fact the they can conduct their business for 24 hours a day in the comfort of their homes and this has reduced hassles on their part of moving from different points searching for the desired products. It is easier for the customers to communicate with the marketers whenever they want to conduct business should they require additional assistance. Mutual understanding between the customers and the organisation is created through communication which is aided by the use of the internet. This contributes towards the creation of value among the customers. Loyalty is created among the customers and this is seen as a great opportunity to the company. This can be illustrated using Schramm’s Model of communication 1954 which shows that mutual understanding is created when there is feedback from both ends in the communication channel (DeFleur & Dennis, 1994). The diagram below shows the model. The other opportunity is that the company is in a better position to meet the needs of the customers since it is able to gather information about their interests. It is also able to gather information about its competitors which enables it to design its products in a way that is valued by the customers. The company operates in a competitive environment but it is able to create value for its customers through offering products and services that are tailored to meet their needs. To a larger extent, the use of the internet has enabled PC World Business to stay abreast with changes obtaining in the environment in which it operates and this has enabled it to maintain value for its products and services. 3.0 Organisation’s strengths and weaknesses of its current use of ICT tools to support the business offering There are various strengths that can be observed from the organisation’s current use of ICT to support its business offering. The company’s website is designed in such a way that there is direct interaction between the sellers and the customers. The major advantage of this strategy is that there are high chances of creation of mutual understanding between the two parties involved as they can link directly. If the customers are in a position to get all the information they may require about a product, they are likely to be satisfied with the offering which will compel them to buy it. Thus, the strategy positively appeals to the interests of the customers which is a major strength given that loyalty among them is likely to be created in the long run. The other strength of the ICT strategy used by PC World Business is related to the aspect of confidentiality. Information about customers as well as the operations of the organisation is treated with strict confidentiality which is one major contributor to value creation among the customers in particular. Customers feel secure privacy is given priority and this can go a long way in creating mutual understanding among them. The other strength of the strategy used by the organisation is that its website is user friendly. It is easy to use since a customer can navigate across different pages in search of information needed. Besides offering information about products and services offered, the customers can also easily give their feedback to the organisation which enables the marketers to respond positively to customer requests. However, one notable weakness of the e-business strategy employed by PC World Business is that a person has to log in first in order to give feedback about the products offered. This entails that non members cannot give feedback about products offered which is a weakness on behalf of the company given that non members are also potential customers. The strategy has to appeal to people from all walks of life as these are capable of turning around the fortunes of the company if they find the products appealing to them. Information about other services offered is not visible if one is not logged in and this may discourage other people from visiting the website. This may scare away potential customers if they cannot easily access the information about products and services they will be looking for. 4.0 Suggest e-business strategy improvements to create greater customer value In order to create greater customer value through the use of an improved e-business strategy, it is imperative for the organisation to create loyalty programmes that can be enhanced by the use of the internet. The system used should be designed in such a way that it can automatically connect to all customers in the database in order to notify them in the event that there is a new product being launched. This has to be accompanied by lower prices as an incentive for them to try the product being offered. All correspondences have to be directed to the customers through their email addresses. This will also enable them to respond directly to the organisation about the products and services offered. If special consideration is given to customers, loyalty among them is likely to be promoted. This also entails that greater customer value is created which positively contributes to the overall performance of the organisation as a whole. The organisation also has to adopt the market penetration strategy in conjunction with its ICT strategy in order to differentiate its operations from other competitors in the industry. Basically, penetration is the strategy of using the same products and seeking to penetrate new markets in order to increase the sales of the product offerings (Kotler, 1999). Given that the strategic plan of the organisation is to offer computer products at affordable prices, it can also use social sites to advertise and market its products given that these social networks are frequented by various people. There are likely chances that the organisation will appeal to a diverse range of people unlike other competitors which target specific markets due to premium prices charged on their products. Through penetration strategy, the organisation can appeal to a wide range of potential customers. 5.0 Conclusion Over and above, it can be noted that the internet has made dramatic changes to the way businesses operate during the contemporary period. Organisations which have harnessed the use of the internet in their operations have significantly improved in their operations as illustrated by the case study of PC World Business above. E-marketing initiatives in particular are greatly enhanced through the use of the internet given that it is easier to gather information about customer perceptions about products offered as well as to process it to satisfy their needs and this is the basic tenet of marketing. Basically, there are more opportunities of using ICT such as the internet in the operations of business in the contemporary information society. References Carsterns, J & Lucouw, P 2004, E-Commerce in practice, Corals Publishers: CT. Cloete, E 2003, E-Commerce: A contemporary view, Pardus Publication: CT. DeFleur, ML & Dennis, E 1994, Understanding Mass Communication. 5th Edition,Houghton Mifflin Company: Boston. McGarvey, R & Campanelli, M 2005, Start your own e-Business. Entrepreneur Press: Canada. PC World Business (Official website), viewed 07 April, 2012 Post, GV & Anderson, DL 2003, Management Information Systems: Solving Business Problems with information technology, 3rd Edition, McGraw Hill: NY. Orr, DA 2007, Advanced Project Management: A complete guide to the key processes, models and techniques, Kogan Page: London. Robinson, W 1997, Strategic Management and Information Systems, 2nd Edition, Prentice Hall, London. Kotler, P 1999, Kotler on Marketing: How to create, win and dominate Markets, Free Press, London. s Read More