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Key Issues in the Development E-Business Strategies Relating To the Education Sector in UK - Essay Example

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The underlying purpose of this discussion is to provide the reader with a more informed understanding of the key issues in the development e-business strategies relating to the education sector in the UK using the case of Condé Nast’s fashion school in London…
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Key Issues in the Development E-Business Strategies Relating To the Education Sector in UK
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 Electronic Business and E- Marketing Condé Nast to launch London fashion school Table of Contents 1. Introduction 1 1.1 SWOT Analysis 1 1.2 Competitor Analysis 3 2. Key components of e-commerce business models 5 3. Integrated e-communication plan 9 3.1 Personal selling 9 3.2 Public Relations 10 3.3 Social Media 10 4. Conclusion 13 5. References 14 1. Introduction Conde Nast Publications, Inc., publishes fashion magazines, trade publications, and Websites (Bloomberg, 2011). It now plans to enter the education industry as it has planned to open a college of fashion and design in London. It has decided to offer a year-long Vogue fashion foundation course, as well as short courses. The planned venture does not have undergraduate degree courses in mind as yet but does plan to offer Masters Course on fashion. An internal audit and competitor analysis would help evaluate the stand that Conde Nast has taken. This can be through SWOT analysis and Porter’s Five Forces Analysis. 1.1 SWOT SWOT analysis reveals the internal strengths and weakness which helps the organization evaluate the opportunities that the market presents. It also makes the organization cognizant of its weaknesses which can help it revise its strategy. Strengths Enjoys excellent reputation and authority of the brand which puts them in a strong position to teach and inspire the fashion and decorating talent of the future. The college principal designate is the editor of Easy Living and has been the deputy editor of Vogue for five years. The editor-turned teacher would be valuable connection for the students as they would receive practical knowledge of the industry (The High Low, 2011). Because of their links with the fashion world, they would be able to offer unique insights into the industry. The group creates and develops lifestyle and business brands online. They have a stronghold in the fashion industry. They also have online and e-commerce experience because of their base unit – publishing. Weakness Conde Nast has no prior experience in the field of education. A major lifestyle and publishing house getting into education is something that may not be very attractive to the prospective students/fashion designers. The editor, named as the Principal, has no teaching experience. They may have problems securing internships for their students because of lack of educational background and especially in the field of fashion (Lo, Sept 14, 2011). They have yet to find a director with experience in the field to run the school. They have been losing revenue in their publishing as there has been a shift from traditional advertising to digital advertising (Kaplan, 2011). They need to have collaboration with a University of repute to be able to award degrees. Opportunity They intend to offer a ten-week intensive course as well as a one-year fashion foundation course. By using the editors as teachers the Group also ensures they get the designs they want to feature in their magazine (The High Low, 2011). The fashion industry in the UK contributes towards employment and the sector has created 3700 jobs because of fashion education and fashion journalism (Griffith, 2011). It is one of the most vibrant sectors in the UK having universal appeal. London has been steering the country towards fashion since the beginning. There exists business skills gap in the industry and Conde Nast could offer a diverse range of career opportunities. At least 9,275 students have undertaken fashion courses in 2008/09 and this means the sector attracts a proportionate number of teachers in the field as well (British Fashion Council, 2011). Threats They may be unable to get the right teachers because banking on the editor alone may not suffice. Competition being high in the industry, they may not be able to get the minimum number of students necessary to get started. Conde Nast has access to some of the sharpest and most creative minds shaping the fashion, design and interiors industries today but they may not necessarily make good teachers. They would be banking on state-funded loans for the students and the eligibility of students would decide the enrolments. 1.2 Competitor Analysis This is an important part of strategic planning. No plans can be made without considering the position that competition holds in the industry. It is also not sufficient to copy the path of the competition. This helps the organization to understand and evaluate its own competitive advantage relative to the competitors while guiding through the development of strategies for the future. Porter’s Five Forces analysis has been found to be an effective guide in conducting competitor analysis. Competitive rivalry between suppliers The fashion industry in the UK is thriving and well respected, adding value to the economy. The sector covers textile production, designing, wholesaling, marketing, manufacturing, education and media (Griffith, 2011). This fashion school would be at par with other fashion schools such as Central Saint Martins and London College of Fashion, which are considered some of the best in the world (Lo, Feb 24, 2011). Graduates from these schools are headhunted by big design houses because of the world renowned fashion courses that they offer (Griffith, 2011). They have a global student base and all their courses are internationally accepted. Graduates flock to London from all over the world. Threat of new market entrants The threat is low because of high investments required to start a fashion school of repute. Besides, many designers thrive in London and starting a fashion school is not easy. Fashion businesses experience high failure rates as they do not incorporate the latest technological innovations (British Fashion Council, 2011). Bargaining power of buyers The bargaining power of buyers or the students is high because too many fashion schools of repute are available in London offering varied courses. Several colleges exist in the UK that supply/trains students in the fashion industry. While some have started very early in life others are yet to get started. Power of suppliers The power of suppliers is low because too many such schools exist giving the prospective students a wide choice. The fashion schools cannot dictate terms. Threat of substitute products Threat from substitutes is high because fashion is now a recognized industry. Everyone would want the best fashion education and work along with the best designers. Of course some schools do offer diploma courses which could be accepted by those who cannot afford the time and funds to take the degree course. Such courses are also preferred by those who have experience in the field and are keen to start their fashion labels. Analysis The internal audit shows that the organization has certain strengths and opportunities in the industry and with attractive remuneration they can attract the best talents for their fashion schools. The competitor analysis shows that competition is high and very renowned institutions exist in the sector. Conde Nast would have to face still competition especially as they are not equipped to offer the degree course. 2. Key components of e-commerce business models E-business has been able to transform the market spaces and business models, powered by internet technologies, intellectual capital and the quest for value. However, the ever-changing customer expectations and the negligible human interaction lead to challenges in e-business models (Amit & Zott, 2000). The internet economy has become dependent on four layers of infrastructure, application, intermediary and business development (Dan-Ming, Xu & Wang, 2007). Extensive interactions take place with the customer on the intermediary layer while the business development layer provides opportunities for creative innovation. The components of e-business model can include several elements such as innovative goals, values and capabilities, effective service to nurture customer relationships, infrastructure based on resources, and revenue models, marketing, sales, innovation, brand and reputation and financial performance. The e-business model, however, can change with the business requirement and has to be in alignment with the overall strategy of the company. Other elements that make an e-business model comprehensive include online information, online customer service, and the ability to make transactions/bookings online. As far as the field of fashion education is concerned, several factors are relevant to the launch of the fashion school by Conde Nast. The first element that the organization has to identify is the value proposition. Conde Nast has to identify how the establishment of this school would fulfill the needs of the students. British Fashion Council (2011) identifies a gap in the supply and demand of fashion education. However, merely providing the service would not suffice. Education being a service sector, personalization is important. Customer expectations have changed and the websites have to be interactive. They must be user-friendly and guide the student through the entire process of information search and enrolment. E-business models pose threats and risks for the customers in online purchase. Credit card fraud and sharing of private information are rampant (Koyuncu & Bhattacharya, 2004). These may dissuade the prospective student from enrolling online for the courses offered. Hence information should be updated regularly and also codified for ease of use. Lack of face-to-face interaction may leave the students in a dilemma and hence live-chat sessions should be offered. Trust in an online environment takes time to develop and is usually based on past experience (Mann & Sahni, 2011). Firms can create value for their customers by lowering the costs or offering something different from competitors (Bevan & Murphy, 2001). If this fashion school could capture what could create value for the students, it has achieved competitive advantage. The next element of the e-business model is the revenue model relevant to this fashion school. The revenue models generally include the advertising model, subscription model, transaction fee model, sales model and affiliate model. In the case of Conde Nast, the revenue model most applicable could be the advertising model and the subscription model. The fashion school can allow banner advertising on their website to affiliated organizations and member of the allied industry such as fashion designers, clothing manufactures, textile designers and the like. Revenue could also be generated by selling clothing designed by their own students online. This could also be another way of providing a platform to their students. The advertising model as a revenue generator could be an extension of the traditional media broadcasting model where the website works as the broadcaster and provides all necessary and relevant information. They provide all information for free while they generate revenue through advertisements. However, the fashion school brochure should be allowed to be downloaded against a fee. The competitive environment is crucial to any business. Conde Nast has several key competitors in the industry and their business model should always ensure they take into consideration the business strategies of their competitors. Keeping track of competition is essential to keep themselves abreast of the latest trends. To have a differentiating factor in its e-business model, Conde Nast should target the students who wish to start their own fashion labels or clothing manufacturing business. Since Conde Nast plans to start with short courses, this could be attractive to those keen to enter into business without losing much time. Hence, this could provide them with competitive advantage. Besides, publishing a fashion magazine gives them competitive edge. Marketing strategy is critical to any business and it is applicable to Conde Nast as well. It has to devise its strategy how it plans to enter the market and how it plans to attract students. Internet offers free competition but branding works only to some extent to fight competition (Starling, 2002). Poor website and errors on the website can influence the decision to enroll at this school. The traditional business models of planning, implementation and operations would have to be done away with. Instead, this fashion school would have to expand the knowledge and capabilities of internal resources by taking advantage of the experience of others. Innovation and creativity are important elements in the e-business models as all e-businesses offer the same service, target the same customers and look for similar customers. The marketing strategy could make the difference in their performance. The Theory of Reasoned Action (TRA) explains that human behaviour is based on beliefs and intentions. Apart from the issue of security, ease of use and website quality can influence the decision of a student to enroll for the courses offered. A satisfied customer would even recommend the college to others (Ranaweera, McDougall and Bansal 2005). Website quality and website satisfaction are interrelated. The aesthetic quality of the website and the content about fashion industry and the renowned fashion designers, the prospects of the fashion industry as a career could motivate the prospective students to enroll for the courses. The e-businesses that have had poor business model, with no brand collateral and depending solely on advertising for their revenue, have collapsed (Amit & Zott). However, as far as Conde Nast is concerned, they have a strong brand value because of their publishing of Vogue – the fashion magazine. Conde Nast should not attempt to thrive on the price and cost advantage. The first step should be to secure the minimum number of students and the look into price and cost advantage. Brand and innovation are not sufficient to lead to success in the digital economy. Service quality is important and hence Conde Nast would have to ensure quality teachers for their proposed fashion school. An appropriate management team is essential to guide the team through the growth and development. Running a fashion school is different from publishing a fashion magazine and hence the management team should be qualified and experienced in the field of education. 3. Integrated e-communication plan Traditionally marketing communication involves advertising, personal selling, public relations and sales promotion. In the case of the fashion school sales promotion is not essential and the most critical elements in e-communication are public relations, personal selling and other innovative tools. Integrated e-communication does not merely refer to tools to communicate; it also refers to new ways in which people can communicate. E-communication helps combine several media – text, graphics, sound etc into a single message (Potomac Knowledgeway, 2000). This can lead to more meaningful communication targeted at a particular customer segment. This narrowcasting has the ability to develop numerous communications for the diverse student segment that may enroll at Conde Nast. 3.1 Personal selling Personal selling pertains to personal interaction with the customers. Face-to-face interactions have become negligible in the digital economy which is not very comforting for many customers. However, the customers can be reached only through the Internet. This can still be made interactive where the students would not feel the lack of direct communication. Video conferencing and teleconferencing has become very popular globally. Even geographically distributed groups can communicate with ease interactively and simultaneously. More important than the tools is what would satisfy the customers and how they would like to receive and respond to information. The internet savvy customer wants a direct online relationship. All of these can be done through the website as almost all students would first visit the website. If the website is attractive and interactive, if chat rooms and discussions could be done online, this would be a unique selling point for Conde Nast. 3.2 Public Relations Social media is the most promising digital advertising and leverage that one achieves through. Burberry, the leading fashion retailer has been using twitter where it has more than 253,000 followers (Griffith, 2011). London Fashion Week, essentially an apparel trade show, impacts the tourism, retail and the hospitality industry thereby attracting the world media. Web 2.0 tools such as Blogs and Wikis, IM Chat, tagging, RSS Feeds, photos, video sharing and social networking are extensively used for e-communication. Public relations can be effectively managed through three distinct areas – user-generated content sites, social media applications and true online communities (Young, 2007). As the fashion school is yet to start, user-generated content would not be available. However, the website could still generate content written by readers of Vogue magazine that could enhance the brand image of the fashion school. 3.3 Social Media Social media applications help the organization to share files, perspectives and experiences. This is done through message boards, forum, podcasts, communities, wikis, and twitter or Facebook. Conde Nast should create a page on Facebook and Twitter where regular updates, events, enrolments and courses are highlighted. Users of such social network sites receive such updated information in seconds and can take action or at least interact instantly. All of these sites are free and easy to create and use. The present generation has the power to customize and personalize everything in their world and daily experience. These social media sites could immensely benefit the fashion school. Conde Nast should create its own page on FaceBook and post information several times in a day. It could also trigger interest by asking questions on the fashion industry, on the top fashion designers globally and on the areas of interest to fashion students. Such discussions, if handled efficiently, in itself becomes an advertising platform. Such a page would have postings from students of other fashion schools and it allows the organization to gain insight into customer preferences, needs and wants. It also enables Conde Nast to evaluate what is not liked by the students and would enable the organization to revise its strategy. Through its website, Conde Nast should also have interaction with its faculty and the teaching staff. This would enhance its relations with its employees, make them feel valued and recognized. Suggestion should be invited on how teaching could be improved to meet the requirements of the students. This would also help identify the training needs of the teaching the support staff. Regular online events can be organized through the website and the social media sites. For instance, when the first set of students have enrolled, there could be a fresher’s week which makes the new students feel honoured by the institution. Online exhibition of the student’s designs should be held regularly from the time the first set of students start designing. In addition to the staff and the students, social networking and the company website can be used to develop public relations with the industry and the organizations that would be likely to offer placement for the students. Placement service should be highlighted and some companies too must be invited for suggestion to have a better rapport between the industry and education. This would help the education sector to educate students as per the needs of the industry, thereby reducing the skills gap in the sector. Sessions should also be organized online where the industry representatives interact directly with the students of this fashion school which would enable the industry to understand what the students expect. Industry links is essential to increase knowledge of several issues, to create case studies and invite guest speakers. All of these enhance the image of the organization and further its public relations. The fashion school can form virtual communities where values and ideas are shared by the members and it serves to provide some degree of stability, growth, loyalty and commitment (Flavian & Guinaliu, 2005). This gives rise to a sense of belonging as users exchange their experience which guides the management for future planning. The leading fashion schools such as London College of Fashion and Central Saint Martins are all connected to FB and Twitter. While it is essential that Conde Nast too must use these sites, in addition Conde Nast should a Private Mobile Network where the private mobile phones would work as if they were connected to a private exchange (Brown, 2007). Calls could be free within the network when the students are at the school and once they leave the premises, they are back to their normal national network. This would facilitate communicate between the administration and teaching faculty, between the teachers and the students. The fashion school should also provide regular newsletters, daily feeds and marketing material emailed as HTML without any attachments (510Cio, 2007). This email should contain link to the main page where the material has been uploaded. It is important to drive traffic to the website because it enables to collect information on how many actually read the article/ message, whether people want changes in how they receive the mails and content. Newsletters should be creatively developed and feedback invited which would help improve the quality of the newsletter. 4. Conclusion Conde Nast, a renowned publishing house, plans to enter the field of education by offering courses on fashion designing. Initially they plan to start short courses and master course for graduates. The internal audit reveals that the group is strongly placed in the industry but competitive rivalry is high. However, the threat from new entrants being low, Conde Nast is well positioned. To enhance its competitive position, the fashion school must select the right e-business model because a wrong initial strategy may be very costly. The focus should be on its website and the revenue model. The website should be interactive so that students do not feel the lack of face-to-face interaction. Since it enjoys a strong brand image attracting students may not be difficult but sustaining the brand image depends on how the fashion school delivers to the students. Service delivery is critical to the success of any service organization. This requires that the organization must be willing to invite a feedback on its efforts. Public relations can be effectively maintained through e-communication tools and strategies. Social networking enables the organization to maintain contact with its students, teaching and non-teaching faculty as well as the industry. Maintaining links with the industry is essential as it would help with placement as well as keep themselves abreast of the latest trends. E-communication strategy would help Conde Nast to sustain its image in the field of education as well. References 510Cio. (2007) ‘Effective Electronic Communication Strategies’, http://www.501cio.com/articles/200702_CommunicationStrategies.html (accessed December 18, 2011) Amit, R. & Zott, C. (2000) 'Value Drivers of E-Commerce Business Models', Bevan, J. & Murphy, R. (2001) 'The nature of value created by UK online grocery retailers', International Journal of Consumer Studies, vol. 25, no. 4, pp279–289 British Fashion Council. 2011. The value of the UK Fashion Industry. http://www.londonlovesbusiness.com/Journals/2011/09/16/Value-of-fashion.pdf (accessed December 18, 2011) Brown, S. (2007) 'E-Communications Strategy'. https://mw.brookes.ac.uk/download/attachments/6750456/E-Comms+Commentary+V2.1.doc?version=1 (accessed December 18, 2011) Bloomberg. (2011) 'Advance Magazine Publishers Inc'. http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=771908 (accessed December 18, 2011) Dan-Ming, D. Xu, Z. & Wang, B. (2007) 'E-Business Strategies and Models: An Exploratory Study in China's Securities Industry', The Business Review, vol. 7, no. 2, pp84 The High Low, http://thehighlow.com/2011/09/conde-nast-to-open-london-fashion-college/ (accessed December 18, 2011) Flavian, C. & Guinaliu, M. (2005) 'The influence of virtual communities on distribution strategies in the internet', International Journal of Retail & Distribution Management, vol. 33, no. 6, pp405-425 Griffith, G. (2011) 'Undressing the £21bn fashion industry: can London compete internationally? http://www.londonlovesbusiness.com/undressing-the-21bn-fashion-industry-can-london-compete-internationally/508.article (accessed December 18, 2011) Kaplan, D. (2011) 'Condé Nast Partners With Art.com To Reopen Online Image Store', http://paidcontent.org/article/419-conde-nast-partners-with-art.com-to-reopen-online-image-store/ (accessed December 18, 2011) Koyuncu, C. & Bhattacharya, G. (2004) 'The impacts of quickness, price, payment risk, and delivery issues on on-line shopping', Journal of Socio-Economics, no. 33 pp241-251 Lo, D. (September 14, 2011) 'Conde Nast's Fashion School Will Open in London September 2012', http://racked.com/archives/2011/09/14/conde-nasts-fashion-school-will-open-in-londonseptember-2012.php (accessed December 18, 2011) LO, D. (February 24, 2011) 'Conde Nast University', http://racked.com/archives/2011/02/24/conde-nast-university.php (accessed December 18, 2011) Mann, V. & Sahni, S. (2011) 'Inter-Relationship of Web Site Interactivity and Customer Outcomes: Building Trust in Internet Banking Web Site', Global Business Review, vol. 12, no. 1, pp99-115 Potomac Knowledgeway. (2000) Why Use Electronic Communications? http://knowledgeway.org/living/communications/homepage.html (accessed December 18, 2011) Ranaweera, C. McDougall, G. & Bansal, H. (2005) 'A model of online customer behavior during the initial transaction: Moderating effects', Marketing Theory, vol. 5, no. 1, pp51-74 Starling, A. (2000) 'Dotcom Bubble – “The Emperor Has No Clothes!”. Web Developer’s Journal. http://www.webdevelopersjournal.com/columns/ajs_bubble.html ((accessed December 18, 2011)) Young, A.E. (2007) 'Social Media Marketing and the Hotel Industry', http://www.4hoteliers.com/4hots_fshw.php?mwi=2351 (accessed December 18, 2011) Read More
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