Potential Risks and Downsides of an E-Business - CK-E-LINK - Case Study Example

CK-E-LINK business plan Table of Contents Table of Contents 2 Executive Summary 3 The market 3 Services offered 3 Keys to Success 4 Management Team 4 2. Industry and business environment context 5 3. Value proposition 7 4. E-business strategy 8 5. E-marketing plan 9 6. Potential risks and downsides of an e-business 9 References 10 1. Executive Summary CK-E-LINK is an e-commerce start up business currently positioning to be the major supplier of Chinese and Korean foods, clothes, and accessories in the UK market. The business intends to offer individuals with quick solutions towards purchasing of physical and non-perishable market products and accessories. The company implements a consolidated approach in selling its products to potential customers. With the introduction of this new service category as well as the utilizing the first mover advantage, CK-E-LINK positions itself for great and rapid growth while at the same time utilizes the opportunity to introduce market entry barriers hence lowering the competition. E-commerce businesses are among the most common types of businesses and are at par with the current technological advancements. The market E-commerce is on the rising end and the amount spent on online purchases increases each year. In the past holiday season, online entrepreneurs realized a 300% increase in their net revenues, a figure that is far much higher than the expected amount, this was according to Boston consulting group. Chinese and Korean foods, clothes, and accessories do not have many retailers in the UK hence, the CK-E-LINK business is likely to be among the first of its kind. Recent research findings revealed that the number of online orders for foodstuffs showed a rise to 270%. The same study pointed out that there was an increase in annual growth of online business at the rate of 145%. The current average rate of return for online-based companies stands at 15%. The statistics reveal a potential market opportunity for CK-E-LINK business. Services offered CK-E-LINK business operates online through a website. The website allows potential buyers to place their orders at a click of a button. The order may be Chinese foods, Korean foods, clothing, and other accessories within the UK. The company minimizes the amount of time wasted by customers while queuing for their services. Orders can be made and payment done via the internet portal, which is equally safe. This will provide customers with an easy and convenient ways of making their payments as well as handling their food items. The company also has two branches in town and intends to set up more so as to accommodate the increasing needs for Chinese and Korean foods as well as their accessories. Keys to Success CK-E-LINK Company has laid down a few achievable keys to success. The first key to success of this company is the development of customer satisfaction software. This software will be the management engine for all customer interactions within the website. This will help in seamless management of business of the various business activities. The second key to success is the establishment of a good relationship with credit card companies, online marketers, and shippers. The alliance with the shipping company is important since the shipping cost turns out to be among the largest cost driver. Partnership with the credit card companies will enable CK-E-LINK to offer given cards as their preferred means of payment hence opening a doorway for additional revenues. The syst5em should also allow provisions through which customers would be able to air their complaints, views, and opinions regarding the nature of services offered. Management Team CK-E-LINK company management team comprise of two principles, my partner Dayniel and I who came up with the idea of running the company. The firm has been operating for long period and introduction of the online branch will be a good opportunity to tap additional income. My partner and I posses credible skills that are required to perceive and create solutions for business needs. This satisfactorily guarantees good management system as well as innovation of new ideas leading to growth of the business. Relatively, my business partner Dayniel is a skilled IT specialist, capable of designing and writing computer codes fast. There is also a need for an IT specialist who will monitor the online business and interact with customers through the system. 2. Industry and business environment context The UK business environment is good with vast business opportunities. There are equally various competitors in the market, hence creating a competitive environment for business. The government equally allows free market entry into the business hence triggering a fair competition. The CK-E-LINK company also has a competitive management team that will ensure the business is successful in its endeavors. The choice of business venture for the CK-E-LINK company is equally good since not many companies in the UK have exploited the opportunity. Despite the good choice of business venture, the business is under certain threats. Such may include the threat of substitute i.e. their competitors may choose to come up with more superior products hence resulting to a decline in their sales. There is also the threat of already established rivals in the market. The e-commerce businesses began longtime ago and there are already developed businesses in the field. Such businesses may enjoy monopoly and largest market share. Such businesses may be a great threat to the company and may not sufficiently reach the intended customers. The CK-E-LINK business however deals in unique products hence may find little or no competition from the other already established rivals. Diversity has also been implemented by the business hence offering customers with a large variety of products. This variation in products allows the business to compete favorably among others. Table showing key players in the market and their respective market share Business name Products % market share NoHassleReturn.com Foodstuff, clothing, 45 Freshdelicasies.com Food stuffs 34 CK-E-LINK Food stuffs, clothing and accessories 21 Pie chart showing major competitors in e-commerce From the above pie chart, Nohasleeturn.com has the largest market share, followed by freshdelicasies.com then finally the CK-E-Link. The business intends to emerge among the key players in the UK market so as to get the largest market share in terms of customers. The competitors are equally on the rise with each coming up with new levels of technology to tighten the market competition. New entrants into the market are not such a great threat since the company deals in various products most of which are unique. Chinese and Korean foods are unique products and many businesses have not ventured into the online businesses for such. The bargaining power of suppliers is equally not a great threat to the business. There are many willing suppliers of the required materials hence selecting the supplier with the lowest bids will be ideal. The company will therefore make a selection of the very best and affordable suppliers in the market for its products. The bargaining power of customers is equally not a big threat. Most products come with price tags hence not giving so much room for bargaining. The cost of these items is however reasonable and easily affordable by all the customers. With the above forces fully under control, the e-business is likely to venture in the market and successfully make great sales. 3. Value proposition The business deals with Chinese and Korean foods, clothing, and accessories. Most Chinese and Korean restaurants in the UK operate locally and have not introduced the online business. For this reason, offering an online option of ordering their delicacies is likely to be a good way forward. This is because most people taking such meals may not have sufficient time to visit the intended restaurants, place an online order, and having deliveries made at the doorstep or in the office is a good substitute. Relatively, the cost of the meals will be easily affordable with free shipping. The business will also deal in clothing and beauty accessories. The clothing will be for both males and females, having various styles and designs. Accessories will mainly be for women since they have quick market and their demand is high. Unlike our competitors, we will introduce a new sense of fashion. Our management team will come up with the latest fashion trends and styles that most customers want. Through this strategy, we intend to capture a large market share within the shortest period. The CK-E-LINK website will be given a simple interface hence making it easy to manipulate. Product quality is another reason why customers should buy from us. Most customers are looking for high quality products and the CK-E-LINK company intends to provide nothing less. By fully satisfying customer demands, the business will capture and retain various customers. These will results to large market share. 4. E-business strategy The CK-E-LINK intends to capture a wide variety of customers, this range from people feeding on the Chinese foods as well as the Korean delicacies. The main purpose of introducing the online portal is to facilitate quick order placement and save customers time and money they spend on travelling to restaurants to take their desired delicacies. With free deliveries, customers can place orders in the comfort of their homes and only wait for delivery of their orders. Relatively, there are the potential customers for clothing and accessories. Female clothing is often on high demand hence bringing them the latest fashion will be a good business venture. Consequently, there are various Chinese and Korean food suppliers and wholesalers in the UK market. The latest clothing fashion and accessories can also be imported or purchased locally from quality suppliers. This will ensure the desired quality is maintained at all times. The business intends to get high revenues from the sales of the sales of Chinese and Korean foods. For instance, a single Korean and Chinese meal costs £5.50. The above amount is inclusive of the shipping cost. Having a large number of persons visiting the site translates into high sales volume. The main strategy in the e-business is ensuring that customer needs and demands are fully addressed. In this regard, the management needs to know the customer demands and design products that can sufficiently meet such demands. Distinctively, the business will conduct follow up to ensure full customer satisfaction even after purchase of products. This will help the business obtain customer loyalty hence earning a large traffic towards their business. 5. E-marketing plan CK-E-LINK intends to implement various marketing strategies to help create awareness for its products. One such lucrative strategy involves the use of social media marketing. Social media offers a great platform through which various people can interact and share ideas. In this instance, the business intends to create a social media page and then advertise it among people and friends using the page. The amazing thing regarding the social media is its viral nature. A single like or a click from one person can result into it circulating through the entire web. Linking the social media page with the business website results to high traffic, this will eventually translate to high sales. In addition, the business can use blogs to advertise the e-business services. Through blogging, the company can share information regarding the nature of their services and provide links leading to the mother website. Persons reading articles from the blog will often find themselves clicking links to the main business website. The website interface will be designed with simplicity to ensure that customers gain ease access. This will facilitate the number of customers visiting the site since it is user friendly. 6. Potential risks and downsides of an e-business Despite the various set plans, the e-business faces a number of potential risks and downsides. Most of these are common and can be solved with time. Unlike the traditional brick and mortar business, the e-business does not allow interaction of the customer and the goods. The business takes place in a virtual space. This creates many issues of trust with customers since there are many online sites that con people using hat tricks. The business will therefore face the problem of lacking trust from customers who may not be familiar with their services. For an e-business to be successful there has to be a robust computer system. Such systems however need updating and maintenance to ensure reliability and safety of the transactions therein. Managing such a crucial component may seem easy and costly but may have little impact on the performance of the business. The business owner may therefore be forced to spend a much time trying to update and keeping up with such developments. Technological advances equally force many systems out of place hence a given system may easily become unreliable despite the cost of installation. A much bigger threat in the e-business is computer viruses. These include Trojan, malwares, spywares, and worms among others. These often pose greatest risks of distortion, and interference of customer information within the system. The business must therefore install great security systems and obtain SSL certification to curb and control the spread of such viruses. Relatively, the success of any e-business depends largely on the delivery channels involved. In this case, the delivery channel used must be straightforward and capable of making on time delivery. There should be no delays since such can lead to customer dissatisfaction. Since the business deals with perishable products, it is important that the business find a quick, safe, and reliable delivery system. This will ensure that products do not perish during delivery. The above risks are common and a business must put up sufficient measures to prevent such risks from occurring. References Chaffey, D., (2011), E-business & e-commerce management: strategy, implementation, and practice. Harlow, England, Pearson/Financial Times Prentice Hall. Read More