The Phenomenal Growth in the Internet User Database - Essay Example

Executive Summary The phenomenal growth in the internet user database has not only necessitated formulation of new strategies and policies that wouldentail active participation of the people, it has also made it necessary for the professionals and the big and small business houses to urgently adapt to the changing scenario which has a huge potential of emerging new markets. The e-business activities, especially in the area of sales and purchase greatly facilitate the creation of unique database of customers that need to be exploited to create niche position in the market. One of the most important features of the e-sales and purchase process system is the database of customers whose personal information is used to create appropriate market strategies to increase the clientele. The firms are increasing using the information to analyze customers’ psychology through the evaluation and analysis of customer database which helps one to know the changing preferences of the customers in the rapidly changing times. Analysis and identification of the changing trends of the customer requirements are important ingredients to gain leverage against their rivals. Report 1. Introduction Of all the technological marvels, internet has emerged as one of the most popular medium of communication with its wide range of applications in the ever expanding and highly competitive business environment. “The Internet with its low-cost entry and ease of use quickly changed how information was exchanged and removed the distance barriers for business partners. The idea of trading on the Internet has generated great interest especially among the smallest companies, formerly excluded from EDI1 usage (Gottardi et al. 2004). It has redefined the business dynamics with its far reaching implications and has become one of the most important parts of any business strategy. Since customers are key to the success of all businesses, Sales Order Processing System and Customer relationship management have emerged as the most power tools to sustain and develop committed clientele across the globe. The essay would focus on the internet based Sales Order Processing System and would analyze the various perspectives that have significant impact on the business. 2. Sales Order Processing and Customer Relationship Management 2.1 Methodology of creation and processing of effective database of customers Sales and purchase of items are part and parcel of daily life and efficient processing of the same is vital for good customer relationship and business growth. ‘Sales order captures demands for the firms’ product and services’ (Scott, 2004). The computerized sales and purchase facilitates creation of database of customers and clients that is very crucial for the firm. The input data primarily consists of item category, brand, quantity, cost, customer detail (name, address, phone and birthday), mode of payment, mode of sale and special scheme (e.g. discount) and feedback details. Once these data are entered into the system, it undergoes various processes before finally culminating in the delivery of the item. These processes can be broadly classified into six main areas; 1. It first creates the sales order number that is unique so that the sale or purchase can be easily identified in case of any dispute or otherwise. 2. The system then differentiates the mode of sale and categorising it into direct sale order or internet based order. This gives the management to make appropriate strategies and plans for their existing or emerging market. 3. With category and brand specified, it then checks for the stock status so that in case of any shortfall, alternative brands can be suggested or sold. This information (category and brand) also help to market other products that may add value to the items asked for. 4. The system then checks for any special offer or discount that the item might have at that particular time. This is an important process because the current market scenario has necessitated introduction of special schemes to attract customers in order to main their competitive edge. ‘The ultimate schedule (discount) is one which maximises the suppliers’ resultant economic gain, but does so at absolutely no added cost to the buyer’ (Monahan, 1984). 5. If the mode of payment is other than cash transaction, the system performs credit check for the customer and accordingly, informs and suggests the customer for alternatives for payment schedules. 6. The system then confirms or refuses the sale/ purchase order and sends the same information on the terminal and generates invoice or sale/ purchase receipt. The completion of sales order is but the first of many other requisites of the input information that are essential for the management of the company. The growth and the future prospects of the business depend on the input data as they are able to divulge vital information about the products and the customers. The sale processing data helps the management to disseminate information that can be categorised into the following output formats; 1. The input data helps to generate current inventory status so that the products that need fresh stocks can be ordered much in advance. 2. The data also helps the management to assess the order flow pattern of the products and services so that the management is able to take appropriate steps in meeting the demands of their customer either by increasing the shopping hours or employing more staff to deal with the rush. This helps the management to maintain a high level of customer satisfaction and general efficiency. This applies both to the days of the months and the specific hours of the day, during which there is marked difference in the sales and purchase pattern. 3. The data also help in finding out the popular items which are sold or purchased as well as the brands that are preferred thus helping the firm to introduce items or products that add value to the ones that are already popular. 4. The management can also maintain its client base by making efforts to personalise its service and sending new birthday greetings to the customers as well as the new information regarding the sales and services of the products and the company. 5. The sales order system facilitates the most crucial of all reports that is the sales and profit report that shows the current financial status of the company. 6. The sales order system is also important because it helps the management to know about the preferences of the customers and forecast the sales of products and services that are popular with the public. It can then make strategies and plans so that new market spaces can be explored or created through effective advertisement and marketing strategies. 2.2 Evaluation and analysis of database to meet the challenges of contemporary business The phenomenal growth in the internet user database has not only necessitated formulation of new strategies and policies that would entail active participation of the people, it has also made it necessary for the professionals and the big and small business houses to urgently adapt to the changing scenario which has a huge potential of emerging new markets. The popularity of internet has been one of the most promising instruments of advancing one’s business base. Internet has increased the clientele of the business houses, while at the same time inundated them with a wide range of options and opportunities for expanding and promoting brands whose demands can be created in far flung areas. Internet has globalized the concept of business. Indeed, advent of computers has tremendously changed the dynamics of business strategies. In the contemporary times, the customer has become much more informed and technology has provided him with more options within the similar product lines, but produced by different companies. The sales order is a very important schedule in the business information system. ‘A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at a lower cost, or do both’ (Porter, 1996). The initial data gives a vital clue about the personal preferences of customers and also about the various products and services that are popular amongst the masses. The input data creates a huge scope for the business and the products which are then exploited by them. It is therefore, important that for a business to succeed in this competitive time, the input sales data must be highly relevant and entered with precision and accuracy. The e-commerce has further widened the scope of business across the globe and greatly facilitated incorporation of strategic goals to meet the challenges of the changing demands of the customers. One of the most important features of the e-sales and purchase process system is the database of customers whose personal information is used to create appropriate market strategies to increase the clientele. The firms are increasing using the information to analyze customers’ psychology through the evaluation and analysis of customer database which helps one to know the changing preferences of the customers in the rapidly changing times. Analysis and identification of the changing trends of the customer requirements are important ingredients to gain leverage against their rivals. The market strategy should be totally focused on the needs and requirements of the people and make continuous efforts to update its products line with that of the changing public demands. Understanding of consumer psychology, therefore, plays a vital role in the development of marketing strategy and planning. The firms are also to have a definite and advantageous position within the industry. In a fiercely competitive business environment, the firm gains the position by leveraging its strengths by improving and improvising its business management and organizational goals. According to Michael Porter, the firms’ strengths can be broadly categorized into cost advantage and differentiation. Three types of generic strategies emerge when these strengths are applied by the firm: cost leadership, focus and differentiation (Porter, 1980). Cost leadership strategy revolves around selling price of the product or service in relation to that of other firms’ product costs. The market share is gained with lower price and is always targeted towards broader market segment. Shultz say that it is the end-users who now control the markets rather than the marketers (Shultz, 2001). Focus strategy involves targeting specific market segment by fulfilling their requirement with better service. This strategy normally has high customer loyalty but narrow scope and mostly relies on brand creation. ‘Brand building is needed because products are the same’ (Kotler, 2005). The brand name ensures that the product maintains a high standard of excellence at a price that a customer is willing to pay for. Differentiation strategy is focused on providing unique features to its products with value added services that gives it an edge over its competitors. The firms which implement this market strategy have the enviable position of commanding premium prices for their product exclusivity. The firms also use their online customer base to analyze the changing habits of the public and accordingly made changes in its business activities. They often diversify their core business activities to include new areas that are focused on the needs and requirements of the people. Indeed, the contemporary business has used computers and its allied field, especially the information technology and internet, seem to have shrunk the world into a global village. ‘This means that at least as far into the future as we can see, affordable, high-quality, self-paced computer training products and trainees will be a mainstay as IT enters the new millennium’(Holt, 2000). The general ethics form the basis of mutual interaction amongst the people in a society. Though some of these values evolve to embrace the changing times and others may interpret it differently under different situation but the universal acceptance of what is right and what is wrong has given them a strong foothold to withstand the adversities of the time. In e-Business, ethical considerations are also important factors in the use of personal details of the customers. The firms need to be extremely cautious that the confidentiality of the personal details is not violated to harm the customers. Another key factor of e-commerce business activities is that it provides the firms with the wide options to expand their business across the globe through strategic partnership. The internet based sales and purchase system helps to develop not only database of customers but it also helps to generate huge information regarding manufacturers, dealers, retailers etc. Hence firms must realize the need for strategic partnership with global business entities to remain afloat in the highly competitive global business environment and look into the various proposals for partnership and strategic alliances with other companies. The products and services have huge scope in the emerging e-commerce platform. The company must explore partnerships or alliances that would help penetrate this segment of the global market. It should focus on the business deals which offer good financial backup for its research activities and product development which is necessary to keep pace with the changing preferences and demands of the customers. In the rapidly changing times, the firm must widen its market strategy to incorporate B2C business strategy also. B2C would open a huge customer base that it can address directly. The unlimited potential of the internet market must be tapped in order to remain afloat in the fast growing customer base. It is true that the complexities of the ever widening horizon of the market, has been one of the motivating forces for evolving new and innovative marketing strategies that are designed to cater to the system as a whole. The system comprises of customers, dealers, manufacturers and marketing specialists. Hence, companies need to be more proactive in exploiting the potential of the emerging needs of the global market. 3. Conclusion The e-business activities, especially in the area of sales and purchase greatly facilitate the creation of unique database of customers that need to be exploited to create niche position in the market. The Sales and Purchase process system, by default, creates customers database whose information details are effectively exploited through effective customer relationship management. The internet has revolutionized the communication and has created a whole new segment of market with diverse needs and expectations. The e-commerce has opened new frontiers of market that has unlimited scope and opportunities. It has a vast potential that goes beyond the local market and embraces a global vision which could turn out to be economically more lucrative while at the same time, promoting global values. 4. Recommendations Sales and Purchase processing systems is an important tool to exploit business opportunities and therefore, changing business dynamics in the rapid globalization necessitate use of the software to communicate effectively. Though the software cannot be called as substitute for the Management Information System, the advantages of the software cannot be discounted. The easy communication is a great strategic tool for both the individuals and the business houses and the development of database of customer hugely facilitates the growth of the business. The use of the software and electronic commerce is highly recommended. The changing paradigms in the global business environment have brought forth a new set of uncertainties and risks that need to be addressed urgently. Hence the risk management would become a crucial strategy that would be incorporated in the wider aims and objectives of the company. ‘In order to manage risk, an organization needs to know what risks it faces and to evaluate them’ (Orange Book, 2004). The risk management would be based on evaluating the risks to business on a realistic basis that would take into consideration the areas that are prone to risk and which have the capacity to impact its development. Therefore maintenance of regular backup of the information is recommended. Reference Gottardi G., Bolisani, E. and M. 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