Digital Currency - Essay Example

Global e-commerce Contents Contents 2 Introduction 3 Discussion 4 Ecommerce components 4 Understanding ecommerce platforms 5 Understanding journey 6 Ecommerce Marketing 7 Understanding of ecommerce metrics and tools 7 International models of ecommerce 9 Business advantage through ecommerce 10 Efficient payment gateways 11 Understand order fulfilment 11 Privacy and security online 12 Conclusion 13 References 14 Introduction Satoshi Nakamoto designed a digital currency and named it as Bitcoin in January 2009. It has a unique feature which allows customers to send payments within peer-to-peer network and decentralized network. One aspect of the software is that the company doesn’t need any central cleaning or financial institution whenever they want to clear and make transactions. Customers can have access to the benefit from their own place with a normal internet connection thanks to Bitcoin software. In addition, Customers can use this software to make payments easily to other public accounts. The smallest unit of Bitcoin is Satoshi wherein 100 million Satoshi are there in 1 Bitcoin. The supply of Bitcoin has the limit of 21 million which is equal to 2100 trillion Satoshi. The current supply is 57% of the total which is equivalent 12 million Bitcoins. The public history with regards to transactions is experiencing upgrades at a continuous rate and also verified by the miners who can gather new transactions in different blocks and attach these blocks at the end of the chain called the block chain. Every single movement of the Satoshi is been tracked right from the first owner to the present owner. This helps in preventing fraud as the customer is aware of the number of Bitcoins he or she wants to spend on a particular transaction. Bitcoin as a medium of exchange is different from the transactions done in other exchanges. Bitcoin gained popularity among the companies that were involved with the facilities of Bitcoin ecosystem. In addition, Bitcoin has provided different software like Bitpay to the merchants and has also absorbed FX volatility risk by giving a guarantee towards a successful transaction undertaken at the right exchange rates and also in making bank payments. From 2013, the company started making significant developments and changes to the start up so as to improve the process and also make it more users friendly for the customers for easy transactions. This report is an exclusive study about the importance of ecommerce and how it helps in creating a good business for the company especially in creating a good brand image. The way ecommerce is done using different platforms and how it benefits both the company and the customers can be seen in a wide and descriptive manner. The importance of ecommerce and the performance of ecommerce for Bitcoin will be analysed in comparison with FOREX.com which is a global leader in foreign exchange and provides contract for different individuals who makes transactions while trading across the world. Discussion Ecommerce components For the successful running of an ecommerce system for a particular company and the major components which are responsible for the success of the ecommerce site are highlighted below. Value propositions - Bitcoin does create a lot of value to the customers across the world as they give the option for easy and successful transactions for the customers with guarantee of no fraud. On the other hand Forex.com being the global leader in foreign exchange market has created a huge brand image with its service and has also attracted many customers through its highly competitive, transparent and reliable pricing strategy. Scope of offerings - It includes the products that the company offers to its customers. Bitcoin has looked to provide the customers with the online money as Bitcoin in the form of Satoshi which does give a very viable option to the customers to make their payments for the goods bought and especially to the public forums worldwide. On the other hand Forex.com is into executive research and also helps in foreign exchange at the best competitive price to the customers. Competitive Strategy - Bitcoin does get a lot of competitive advantage with the introduction of digital mode of payments. This has guaranteed convenience to the customers with regards to online payment. A customer does not have to travel all the way to retail store to make purchase of a commodity and pay for it; on the contrary, the customer will be able to make a complete transaction at the comfort of his/her office or home. On the other hand Forex.com gets the advantage from the competitors through its good pricing strategy that ensures that its products remain cheap but of quality as compared to its competitors. The components important for ecommerce do play a vital role in creating a good market image and also a competitive edge over the competitors. Understanding ecommerce platforms Bitcoin has used many platforms for its ecommerce business. These platforms are majorly categorised into Website, facebook store, mobile app and call centres. Bitcoin takes the support from WalletBit that has provided various support platforms for making payment like Magento, osCommerce, Word Press and ZenCart for e-shopping for the customers to make. This provides a lot of customized solution to the company. In addition to the BitPay the company also has a free e-commerce system and funding for other companies. Bitcoin has launched the 3DCart and Shopify platform for the merchants who can easily make their transactions and payments using this platform. Other payment platforms that are present in the website are paysius, Uber Cart etc. The platforms used for ecommerce by Bitcoin does gives it a lot of competitive advantage over the other competitors as the company is able to provide the best of facilities to the customers and make the process very convenient and user friendly for the customers. The platform does give the customers a lot of benefits as they are able to access the website very easily and are able to make their payments without any hassle (Whylie, 2012, pp. 34-37). Understanding of customer journey Bitcoin made the barrier of US $1,000 per coin and this makes analysts question about purpose of the investment and the amount of profit that can be realized from this website. Earlier mode of payment was characterized by direct hand to hand payments. This is because of the mutual belief that this mode of payment was more reliable and secure. However with the increasing competitive, innovations and technological advancements; business and customers have embraced quicker methods for making transactions. The ecommerce sites like Bitcoin have proved significant by providing digital money. Through these sites, the customers find comfort ability and reliability while making their payments. With the changing trend among the customers where they try and get their work done easily and at a faster rate; and also the major issues involved in money transactions make security and reliability to be important factors that must be taken into consideration but making any online transactions. Taking this into consideration, it is worth noting that Bitcoin does guarantee its customers secure and reliable transactions. This helps the customers to be assured of successful payments without any failure or fraud. Forex.com has a good understanding of the customers’ requirements and based on that; the company has made its products and also developed the platform through which the customers can make their transactions and also get the reliable research reports based on the genuine data been analysed by the company (Rich, 2011, pp. 78-85). Ecommerce Marketing The contemporary business world is characterized by ecommerce websites, online buying and purchasing processes. The usage of social media and other online services by businesses and business associates have seen tremendous growth. Despite the fact that individuals and firms use different platforms for online connections, business, selling and buying things; all these are attributed to enhancement in ecommerce and technological improvement. Thus, the marketing processes through ecommerce website help several firms to create a good brand image towards its customers; hence competitive advantage in the global market. E-commerce marketing is all about encouraging the web surfers to visit the site and entice them to become a customer for the particular company. Bitcoin provides a lot of opportunities to the customers to make the payments but its process to encourage customers to visit its sites is very slump. This limits the number of customers that visit the site. On the contrary, Forex.com has a wide range of activities such as Facebook store and other social media websites that have given the company a huge visibility and also helped it to attract many customers across the global market. This marketing and promotional activity to attract more customers; and the flexible and reliable website has established the company a global front especially with regards to foreign exchange (Rich, 2011, pp. 34-37). Understanding of ecommerce metrics and tools There are basically four tools and metrics that are used to analyse the performance of the website. These tools are listed below: Understand the Lifetime Value of a Customer - To calculate the exact customer life value created by the website can be given by the following formula. Customer Lifetime value (CLV) = Present value of (Average profit generated per year * Number of years) – Acquisitions costs. To know the exact profit it is important to know the inventory of the product and also the sales. In case of Bitcoin, it is important to know the number of transactions been made and the number of Bitcoins present in the stock. This is important considering the fact that the law of business argues that it is better to hold on to a customer than to add a new customer. Monitor Customer Satisfaction - Monitoring customer satisfaction is important because it helps to improve the website and also to know the exact requirement of the customers. This can be known by directly asking the customers and listening to the feedback answers from the customers. Through monitoring of the customer satisfaction, the company will be able to know the customer’s perspective towards the website and the needs or desires of the customers. A customer who is satisfied will always comeback for more and this is one of the goals of undertaking customer satisfaction analysis. Measure the Funnel - The factors which can be measured by tracking the customer’s information gives the understanding of the number of customers visiting the site, the conversion rates and also the type of visitors visiting the website. Determine the Marketing ROI (Return on Investments) - The return on investment can be obtained from the company’s website or through the following diagram. Average Acquisition Cost ($) = Acquisition Spending ($)/ number of customers acquired These tools will explain the benefits that the company gets from ecommerce and also the benefits it gives to the customers. International models of ecommerce The two models for international e-commerce are B2B and B2C ecommerce sites. The diagram explaining the ecommerce process is been shown below including both the B2B and B2C process. (Source: Visvesvaraya technological university, n.d, p.10) In the B2C process the e-business has to have a B2C portal, self service through web sales. The company needs to have an integrated web store and have an integrated marketing process for the company’s business. The catalogues must be present in the website and also must be user friendly for the customers. For B2B process, the customer needs to have a self service to the product with an automated procurement process. In addition, the exchanges are done online through the B2B portal in the e-commerce websites. These models of B2B and B2C process for e-commerce help the company to reach their customers globally through their websites hence increasing their customers’ base. Bitcoin has enabled the two business models of B2B and B2C to have customers in huge numbers across the global market. It follows both the models very efficiently and looks to attract majority of its customers so that they can gain majority of customers. Business advantage through ecommerce There are lot of advantages of ecommerce for every type of companies including foreign exchange companies. Bitcoin is one of the beneficiaries of ecommerce owing to its ability that enables its customer make digital online payments. The company’s website provides the customers with the opportunity make their payments at their own convenience. The various advantages that ecommerce does gives to the company are been listed below. The company can locate and target customers cross the world easily and provide facilities to them. It reduces the overall cost for the company as the initial setup of the website is not that costly and also the transactions made are through the digital media. E-commerce does help the company to create a good brand image in the global market. It helps the company to provide the efficient service and also at a faster rate. E-commerce helps the company to reduce the usage of paper thus it also helps in provides in improving the condition of the environment. It has also helped in improving the productivity of the company as it brings in the Pull type marketing system in the company. Thus, the e-commerce website help the company to get a huge profit in the market especially in creating a huge market image and share in the global competitive market environment (Spector, 2009, pp. 45-48). Efficient payment gateways The ecommerce websites are very effective in making the transactions fast and quick. But the most important factor that stop the customers from using ecommerce is the reliability and the guarantee of no fraud been done in the transaction and their money is not been wasted. People look to get the confirmation that their transaction been made is very reliable and also efficient. The efficiency for effective payments is done by the process of having a genuine payment option so that both the payer and the payee get their required thing correctly. Bitcoin does give a lot of importance to the customers by giving a guarantee that the transaction been made is very genuine and without any fraud and is very efficient and fast. It provides the facility of Bitpay for the merchants for making the transactions and also for making their payments. These types of platforms provided by Bitcoin does give a lot of advantage to the customers as they can make their payments without any fear about the fraud. There is a huge difference in the way the payment is been made in different websites and because of this difference people look to use the most reliable and genuine website from where they can make their payments easily without any failure as it involves the risk of loss of money for customers if any fraudulent activity is present (Ledford, Teixeira and Tyler, 2010, pp. 89-96). Understand order fulfilment While making an order in the ecommerce website the most important factor that the customer looks is that the order is been successfully made and there is no loss of money or any transactions. In case of Bitcoin, where the customers can make their payments to various public forums and also the merchants can use it for making payments in their business process, order fulfilment refers to the fact that the payments that the customers and the merchants makes are been successfully been made with no problems and also with no fraud. The customers get the confirmation from the website based on the payments they have made. This confirmation will ensure them that the payment they have made is been successfully been made. In case of Forex.com the various foreign exchanges and the researches been made are to be made taking care of the fact that they are been done very efficiently and the company does it because of which it has become the global leader in the foreign exchange business in world. Privacy and security online The privacy and security in online ecommerce website is the most important factor. In the online transaction people tend to fear from the loss of money because of the fraud and malpractice that can take place in the transaction process. Thus for the companies indulging in the transaction and where customers money is involved it is very important to take care that there is no fraud and the privacy is been maintained of the customers along with providing complete security to the transactions they make. Bitcoin does give a guarantee that the company does maintain privacy about the information of the customers (Kalbach and Gustafson, 2008, pp. 123-127) The company gives complete security to the customers in a way that the payment made y them are been completed and are customers don’t face any problems related to the payments they want to make for their transactions. On the other hand Forex.com doesn’t give guarantee but because of its brand image and its good work in the market is been the global market leader in the money exchange business across the world. Customers prefer to make their transactions from the reliable and secure websites which is the most important thing to be kept in mind before going for ecommerce so that they can capture a good market share in the global market. Conclusion Thus from the above study it can be seen how the style of business has changed over the years with the changing demand from the customers. People now want to get the easiest process to do their work and avail their products. People look to spend most of their time on internet and the social websites. Thus the emergence of e-commerce for every type of business is very fast and has led to the growth of the companies having a huge competitive advantage over other competitors. Bitcoin is in the online e-commerce business allowing customers to make payments online very easily and efficiently. The company provides the customers the facility for online transactions, making their payments by providing digital money scheme for the customers. The e-commerce site of Bitcoin is highly reliable and efficient and provides a lot of guarantee to the customers so that they can be assured of the fact that the payment is made successfully without any failure. The company has looked to gather the global market with the e-commerce site and has got a good market share because of its efficient payment gateways that it gives to the individual customers and also to the merchants for making their payments and also for genuine order fulfilment with full privacy and security given to the customers. References Visvesvaraya Technological University. n.d. e-Business and e- Commerce. [pdf]. Avalable at: < http://elearning.vtu.ac.in/17/e-Notes/12MBA15/Unit6-Veena.pdf. [Accessed on: 28 March 2014]. Rich, J. 2011. Design and Launch an E-Commerce Business in a Week. Canada: Entrepreneur Press. Whylie, J. 2012. Make Your Website Sell: The ultimate guide to increasing your online profits. London: Marshall Cavendish. Spector, R. 2009. Amazon.com: Get Big Fast. London: Random House. Ledford, J. Teixeira, J and Tyler, M. 2010. Google Analytics. New York: Wiley. Kalbach, J and Gustafson, A. 2008. Designing Web Navigation: Optimizing the User Experience. 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