E-Commerce and Future Expansion Plans for K&T - Case Study Example

E-Commerce Name Instructor Course E-Commerce Executive Summary E-commerce is an approach that has been widely applied by many companies and more so for the small companies that are seeking to expand its operations in the global market. K&T is a small company that has plans of expanding its operations in other larger cities around the globe. The report has sort to evaluate some of the ways e-commerce can help K&T in its expansion plans as well as highlighting some of the challenges that it can encounter while implementing e-commerce. According to the findings of the report, e-commerce will help K&T in its expansion plans through reaching a broader customer outreach, enhancing customer satisfaction, an opening of more and diverse opportunities, and saving costs while maximizing profits among others. Some of the challenges that K&T may encounter from e-commerce include security issues, lack of customer trust, and language barriers among others. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 E-Commerce and Future Expansion Plans 4 Issues & Challenges of E-Commerce Application 8 Conclusion 11 References 12 Introduction Electronic commerce (E-Commerce) can be defined as the process of transmitting data or funds or buying and selling of services or goods through an electronic network, majorly the internet (Emberley, Glasheen and Gantz, 2001). E-commerce can be conducted through various applications like shopping carts, web services, online catalogs, Emails, and the File Transfer Protocol (Emberley, Glasheen and Gantz, 2001). Many businesses, especially the small businesses are increasingly embracing the use of E-Commerce through investing in Information Technology (IT) with the aim of expanding their business. K&T is a small business which sells furniture, clothing, and children’s toys, that seeks to expand its operations into larger cities like Leeds, Manchester, London, and the UK. Although the company has applied some IT in some of its activities, it has not yet fully adopted E-Commerce and the use of IT in most of its operations which when applied would assist the expansion of the business significantly. Therefore, the report will evaluate how E-Commerce will help the business in its future expansion plans as well as document some of the issues and challenges of its implementation. E-Commerce and Future Expansion Plans The application of E-Commerce and the investment in IT will assist K&T to have a broader customer reach which is the primary aim of its expansion (Feindt, Jeffcoate and Chappell, 2002). With the implementation of E-Commerce, the sky is the only limit concerning the target audience. K&T will no longer be confined within the boundaries of its local vicinity. Instead, the business will manage to access any location in the entire world which will, in turn, enable it to take full advantage of the newly presented opportunities (Wong, Yen, and Fang, 2004). Also, K&T will manage to generate more revenue with the increase in sales and visibility. Although it will still be vital for the company to have its specific target audience, it will still have the opportunity to expand even beyond their geographical limits (Wong, Yen, and Fang, 2004). E-Commerce and the investment in IT will also enable K&T to oversee that they manage their resources better and in a more sustainable manner (Feindt, Jeffcoate and Chappell, 2002). Time is an essential element in the success of any business, and more so for small businesses like K&T. Time plays a crucial role to the consumers and the businesses as well, particularly in commercial markets (Wong, Yen, and Fang, 2004). Investment in IT will oversee that there is automation of various business activities and transactions. From the business point of view, automation will oversee that there is a lot less amount of time that will be spent on the various business processes and transactions which mean that a lot more activities and transactions can be undertaken on a single day (Drew, 2003). The increase in the business activities and operations with minimum time wastage will assist in the expansion plans of K&T through upholding high levels of business efficiencies in all its new areas of expansion. The aim of every business is to save on costs and maximize profits even when it is expanding its operations (Wong, Yen, and Fang, 2004). E-Commerce is a cost-effective means of undertaking business as compared to the traditional method of commerce. Since K&T seeks to expand its operations in larger cities, it means incorporating other middle-people or sales agents to sell for them their products would be more costly (Wong, Yen, and Fang, 2004). For example, the company currently has thirty employees and most of whom who work in the shops more so as sales agents. E-Commerce and business automation enables to eliminate such labor costs and instead divert the funds in other important business aspects (Drew, 2003). In embracing E-Commerce, the total overheads that would be needed to run the company would be very much lower as opposed to the traditional method of commerce. K&T will only need head offices in those new areas of expansion as opposed to having the head office and other different office branches of the same business (Drew, 2003). This will then oversee that there would be available resources that will allow the business to expand in other cities. Investing in E-Commerce and IT will offer opportunities of having limitless information about the business as well as having endless features of the same (Wong, Yen, and Fang, 2004). The failure of an extensive application of IT in the firm or the adoption of E-Commerce creates some limits to the information that the company can offer its customers win one physical location. When incorporating these entities and technologies, then the limits of information are erased (Wong, Yen, and Fang, 2004). The company will be in a position to equip its customers with adequate information about its products through its e-commerce website without incurring any costs of maintenance (Feindt, Jeffcoate and Chappell, 2002). The limitless information will also enable the consumers to know more about the company and its products hence reaching a wider market which is essential for its expansion plans. Additionally, the consumers benefit from the e-commerce as well as the automation of the business processes through providing them with some important and endless features which will make their shopping experience enjoyable and positive (Drew, 2003). This is an essential requirement that will assist the business to grow. Creating these endless features for its consumers will play a significant role in enhancing customer satisfaction which is very crucial to its success as it plans to expand its operations (Feindt, Jeffcoate and Chappell, 2002). For example, instead of the customers walking around in the shops pushing carts, the customers can find the goods and that they want through the use of searching tools in the company’s e-commerce website. Therefore, incorporating technology and e-commerce will help in ensuring that there are high levels of customer satisfaction which is a vital element of the company’s success as it seeks to expand its operations (Drew, 2003). E-commerce will enable K&T to open various and diverse business opportunities with different investors and companies (Feindt, Jeffcoate and Chappell, 2002). It is the vision of K&T to grow in global scales and create vast and helpful partnerships that will assist it expanding in different countries across the globe. E-commerce is a marketing strategy which will put out the company out there for investors to judge its success and evaluate whether they are willing or not to be associated with K&T. Also, many businesses around the globe are adopting and embracing the use of technology in their different business processes (Feindt, Jeffcoate and Chappell, 2002). Therefore, if K&T does not adopt the extensive use of technology, it will be losing its competitive edge as compared to other companies in the same industry (Feindt, Jeffcoate and Chappell, 2002). For example, because of the booming e-commerce, businesses are using more resources in new technologies, internet facilities, securities, and business plans. As a result of this change in business operations, many new markets have some out from e-commerce which has boosted the global markets. Therefore, it would be prudent for K&T to adopt e-commerce and the extensive application of IT so that it could maintain its competitive edge in the global market (Feindt, Jeffcoate and Chappell, 2002). Another way that the extensive application of IT will benefit K&T in its future expansion plans is through enhancing efficient and rapid communications (Drew, 2003). The rapid flow of information can assist in increasing the company’s productivity which will enable better decision-making processes. The improved and fastened decision-making processes will then make it easy for K&T to expand into new countries and territories that they would otherwise not have known of if they would not have incorporated IT (Drew, 2003). Efficient communication strategies will not only help the company in the exploration of new business territories, but it will also assist it in maintaining its competitiveness in the new areas of operations. Crucial business and routine business information can be efficiently disseminated in all of the areas of operation of the business in an efficient and quick manner which is critical to the performance of the firm in the new operation areas (Drew, 2003). Issues & Challenges of E-Commerce Application Although E-Commerce will greatly assist K&T in its expansion plans, some challenges are associated with its implementation. These issues and challenges have the probability of limiting the benefits and effectiveness that are associated with the implementation of e-commerce and investment in IT. Since K&T is still a new company that seeks to expand its operations in other countries through the use of e-commerce, there are high chances of the customers, especially the new customers not trusting their e-commerce website (Albrecht, Dean, and Hansen, 2005). Despite the website having a crude and sophisticated layout, or whether the company hires professional website designers to develop the website of the business, the customers will not trust it automatically in the first instance (Albrecht, Dean, and Hansen, 2005). Therefore, K&T could try to make its e-commerce website as legitimate as possible in the customers’ eyes through maybe displaying the company’s telephone number and physical address. Also, if it is possible, the e-commerce could incorporate the photos and the names of the people who assist in supporting the operations of the company’s websites (Albrecht, Dean, and Hansen, 2005). Another potential challenge of e-commerce is the high risks of the company’s website being hacked (Love et al., 2001). Although the company is just beginning to grow, it needs not to assume that its e-commerce website is still small and therefore, there will be no risks of it experiencing security breach at one point of it being in existence. When the company’s website gets hacked, then it would be very disastrous for the K&T consumers who might find that their personal information or credit cards have become compromised (Love et al., 2001). In the same light, the company might also be locked out of its e-commerce website, its payments may become redirected to other sites, or the website features and page content may become scrambled. Therefore, in adopting e-commerce, K&T needs to protect its clients and itself through implementing measures like changing its passwords regularly, customizing the shopping cart installation, and finding the central vulnerabilities of its website among others (Love et al., 2001). Also, K&T could check the e-commerce reports regarding security breaches on a regular basis. Another challenge that K&T may experience in adopting e-commerce is that at some point, the company may be having high traffic levels that go through its e-commerce website but it may still be experiencing few sales (Albrecht, Dean, and Hansen, 2005). The website could also be generating many sales which could inevitably become the refunds and returns of the products. For the company to manage in the rectification of this problem and know where it is losing its sales and customers, it will need to understand how to increase its conversion sales and master its sales funnel correctly (Albrecht, Dean, and Hansen, 2005). Every page of its e-commerce website will be required to perform a stipulated objective of its sales funnel which moves its customers from one point to the other. Since K&T seeks to expand its operations in other countries, it is bound to have a broader customer base. This means that they would encounter clients who shop in different ways. Therefore, as it expands, it is likely to meet customers who use multiple shopping channels for their shopping needs (Quayle, 2002). Not making the e-commerce website support the multichannel shoppers may lead the company losing many of its potential clients. The multichannel clients usually spend about 82% more money for every transaction that they make as compared to the single channel shoppers (Quayle, 2002). This means that K&T will need to integrate its e-store with some of the social platforms like Facebook. Furthermore, when the company chooses to integrate social media to its shopping platforms into its sales channels, then it will enable it to connect with many other social media users with the company’s websites which will increase shopping carts and web users (Quayle, 2002). Ignoring this aspect presents the risks of the company not achieving the benefits that it would wish to achieve even after its expansion. Another crucial international e-commerce challenge that the company will likely face is the language problem (Love et al., 2001). The different cities that K&T seeks to expand into speak and communicate in a different language from the one the host country communicates with. The language is also a part of the culture of the new areas of expansion which means that it would be necessary for the company to adapt (Love et al., 2001). Therefore, in the e-commerce website of the company needs to incorporate the different language versions which will suit the various areas of operation. If the website is not too large, it can offer some translation options which are suitable for the specific local languages. This is a depiction of trying to fit in with the culture of the particular country which enhances the credibility and goodwill of the company in the new areas of expansion (Love et al., 2001). Conclusion Businesses have widely adopted e-commerce over the years. It can be applied through the use of various applications and for different purposes. K&T is a small company that has some plans of expanding internationally and is contemplating the use of e-commerce and the extensive use of IT as some of their measures of thriving in the new business territories. E-commerce, in many ways, can assist K&T in its expansion plans. Some of the ways include enabling it to reach a broader customer outreach, enhancing customer satisfaction, an opening of more and diverse opportunities, and saving costs while maximizing profits among others. However, there are some challenges that e-commerce and the extensive application of IT may result in, some of which include security issues, lack of customer trust, and language barriers among others documented in the report. References Albrecht, C.C., Dean, D.L and Hansen, J.V 2005, Marketplace and technology standards for B2B e-commerce: progress, challenges, and the state of the art. Information & Management, 42(6), pp. 865-875. Drew, S 2003, Strategic uses of e-commerce by SMEs in the east of England. European Management Journal, 21(1), pp. 79-88. Emberley, D., Glasheen, C. and Gantz, J 2001, E-commerc is here to stay: Worldwide Internet usage and commerce forecast and analysis, 2000-2005. Internet and E-commerce Strategies Bulletin, pp. 1-12. Feindt, S., Jeffcoate, J and Chappell, C 2002, Identifying success factors for rapid growth in SME e-commerce. Small business economics, 19(1), pp.51-62. Love, P.E., Irani, Z., Li, H., Cheng, E.W and Tse, R.Y 2001, An empirical analysis of the barriers to implementing e-commerce in small-medium sized construction contractors in the state of Victoria, Australia. Construction Innovation, 1(1), pp.31-41. Quayle, M 2002, E-commerce: the challenge for UK SMEs in the twenty-first century. International Journal of Operations & Production Management, 22(10), pp.1148-1161. Wong, X., Yen, D.C. and Fang, X 2004, E-commerce development in China and its implication for business. Asia Pacific Journal of Marketing and Logistics, 16(3), pp.68-83. Read More