E-commerce in the Global Business Environment - KFC - Case Study Example

Ecommerce in the Global Business Environment Name Institution Date Ecommerce in the Global Business Environment Opportunities-Threat Approach The mode of doing business using the intranet and internet has many advantages to a business that has embraced e-commerce. KFC stand to benefit a lot when it has a functioning website and trading of its services and goods can take place over internet communication. The convenience created by this mode is incredible and many clients will be reached as opposed to using a manual basis. There are many opportunities that the business can explore following the incorporation of e-commerce in its trading. Having been established in 1959, KFC has a formidable customer base that can be used as a starting point when embracing e-commerce (Bradach, 1998). The evolution of internet and personal computers in the 1990s made it possible for many households to own computers. It is a common fact that many Americans and other people in the world can now access internet over their mobile phones, personal computers, and laptops. This has created a high level of convenience that can perfectly be exploited by KFC when implementing e-commerce (Wit & Meyer, 2010). E-commerce provides an opportunity for customers to enjoy the services rendered by KFC. The convenience that the customers will enjoy is intended to increase sales and also the customer base of the business enterprise. KFC has an opportunity to reach out to customers who were not aware of the business in the beginning. Many people can access the internet and will use available search engines to find out pleasant places that sale food. The business has an opportunity of increasing its customer base through this. KFC will get access to other markets beyond the national boundaries. The business will increase the global market. Customers can now learn faster on the availability of the new products being stocked by the company. The opportunity of KFC marketing its business beyond borders is imminent (Robbins, 2001). Many opportunities and markets will come up from the global markets and the company will expand its operations. Online advertising is cheaper as compared to using mainstream media. There are many applications and avenues online that can be used for marketing. Twitter, Yahoo! and Facebook are just a few avenues that can be utilized by the business enterprise. The company will have an opportunity to cut down expanses on advertising. Cutting on costs is a wonderful opportunity for the business to increase its sales. Many saved from reduced costs of advertising in the mainstream media can be used to expand the business to other new markets that will b e created with the new methods of reaching out to customers. The company will also be provided with a wide audience to advertise to as opposed to the former markets focused on. A website is a good thing for a company to own (Windsperger, 2004). New customers can follow the icons to learn about the products of the company and also place their orders online after looking at the prices. More information can be found on the internet. The customers can found out the combination of ingredients used to prepare special delicacies. Provision of adequate information will lead to trust and good rapport being created between the customers and the company. The convenience created by online purchase is very great for customers. Customers will have their products delivered in their homes after ordering online. The company will have the pleasure of planning in advance when the customers also book their deliveries in advance. Online transactions are cheaper and less time consuming as opposed to the customer having to visit the food place by himself. Introduction of new products is easy over the internet since the customers can be kept posted on the progress of the product before launch. Important information can be updated and the customers will learn in time what is happening on the delivery of products from the restaurant. The company will also reduce the use of company space as more data will be stored in computer data bases as opposed to hard copies. Threats The application of e-commerce comes will its on share of threats that KFC have to be aware of. In this era of technology, there is increased level of sophisticated of cyber crimes that target to fleece company accounts and also steal from unsuspecting customers. E-commerce exposes the company to being a target of hackers and other cyber criminals who use the internet to defraud people. Customers who will have their money stolen by these criminals will loose trust with the company. Without trust, employees of the company or former employees can be used to fleece unsuspecting customers or the company accounts themselves. This calls for high security checks on the part of the company to keep off criminals who may want to use the internet to con customers (Kleber, 2000). There will be additional costs of stepping up the level of security for the company. Cyber threats are real and the company has to contemplate ways of curbing the menace of keeping it at bay. Without proper security checks, the restaurant stand to loose a lot through customers being conned or the company accounts being infringed or tapered with. The company will have to secure its security if it wants to gain from e-commerce. The e-commerce will increase rivalry between companies as they target each other head on. Companies can use propaganda on the internet to fabricate lies about the company. Negative publicity can easily spread through the internet. The company reputation can be hugely damaged in case of a small hitch. News spread faster due to the connectivity brought about in the internet. Without methods of curbing negative publicity on stand by, the company can suffer a lot when others use a small mistake to paint the company in bad light (White, 2009). Negative publicity on the internet can cost the company its current base of customers and even keep away potential customers. The company also will have to invest more on security factor on the website. Therefore, increased cost is a threat to the company trend of making huge profit margins. Increased costs have to be absorbed after the company increases its profits, in case of any problem on the internet advertising, the company can make huge losses. If all other companies invest in online advertising then there will be increased competition. The company has to braze itself for other challenges that come with online marketing. For instance, more information is exposed to competitors and hence they learn of the strategies being used to enhance the performance of the company. Imitation can be a risk factor t the company. The company may end loosing a lot when the others imitate the manner in which they offer their services. Competitive-strategies approach The company has a rich history that can be used as a competitive advantage since it ranks high in terms of authenticity and being genuine. Customer loyalty comes with familiarity and quality service production (Watson & Caldwell, 2005). The rich history of the company makes its easier for it for customers to be convinced that other companies which have been in the business for short time. Winning the trust of the customers is not an easy thing to do. Goodwill can be an added advantage to the company. The company is likely to make more sales than its competitors. The company has outlets in more than 100 countries. E-commerce will enhance the marketing strategies of the company to reach out to many customers across the globe. The restaurant chains can command respect in the market owing to being in the industry for long. Many youths are computer savvy and they prefer technological advanced gadgets as compared to adult customers. The company will tap into the huge youth market and still have sales to the adult folk (Windsperger, 2004). The customer base of the company will be cemented and more new customers can be won over. The company has the advantage of being based in many countries as compared to the new entrants. As new entrants struggle to make an impact in the market, KFC will consolidate its market and serve its customers better to increase allegiance. The corporate image of the business can be enhanced through e-commerce. KFC has an easily located brand that is superior as compared to other companies. A brand that easily recognized is good for the company since it result into sales increase. Brand superiority can be used by the company to exploit the new markets. Customers trust a brand that is superior. A superior that is superior can be easily adopted in the market (Seijts, 2005). Brand loyalty can come easily with a company that has brand superiority. Gaining the confidence of the customer is a big advantage that can be used by the customer in the marketing of its services and products. The rich history of the company also gives it a competitive edge. The company has the advantage of using brand diversity to penetrate other new markets. The company can effectively use differentiation to counter competition and also to penetrate into new markets. KFC is household name in many countries and it can use diversity to reach out to many customers. The fact that the restaurant has been in the industry for long means that it has the human and financial willpower to invest in new markets and improve service delivery to its customers. Moreover, the e-commerce budget can be financed without a hitch. This is because many financial institutions will be will to lead to KFC to expand its activities. The company can use its capacity to offer products ion more than one market (Hoskisson, 2008). Fried chicken has always been identified with KFC; the company can use this as an entry point into other markets. Strategies KFC can exploit the gaps in the market to gain entry into new markets. Thorough market research has to be conducted in order to determine the needs and wants of the customers so as to precisely supply goods that will cater for their needs (Wit & Meyer, 2010). KFC is one of the market leaders in the food industry and it can use this opportunity to dominate the rest of suppliers in the industry. Where there are established brands in the new market, KFC has to start out as a follower before challenging and then going for the market leader position. Use of offers and other promotional tools like coupons can be used to popularize e-commerce. The company can start by offering discounts to customers who purchase their products online. In the long run, the cost used by the company can be recovered when KFC starts reaping profits from the e-commerce sector (Cohen, 2004). Domain name for the e-business The domain name that can be used by KFC is ‘kfc makeover.com’. This name shows that KFC has taken up reorganization to utilize new information and offer services and product at a high quality. It bears convenience and true picture of incorporation of high level technology into the business. The name depicts the revitalization of provision of services. Feasibility and cost of hosting a website The viability of this project is high since the use of internet has evolved over time. The profits that will come from the application of e-commerce will make the company to have its operation move to another level. The feasibility check for the e-commerce being incorporated into the business will have advantages to the operation of the company (Ireland, Hoskisson & Hitt, 2008). The chain of restaurants allover the world will be able to communicate and exchange information easily. The company will have to incur costs before the benefit of the project is realized. The strategic team has to sit down and estimates all the costs that the company will incur in trying to invest in e-commerce. Some of the costs that KFC will incur include the following: Internet service provider-$400,000 Store-builder service- $1million Maintenance-$100,000 IT specialist salaries-$200,000 Miscellaneous-$75,000 The company has to solicit for funds from its own saving or get a loan from a financial organization. The company will require close to $2.1milion for setting up the e-commerce project in key areas of targeted markets. The main markets have to be identified and individual visibility test performed. Since the benefits of e-commerce seem to be imminent to will be apt to ensure that is it is implemented to help in making the business sustainable. References Wit, D.B. & Meyer, R. (2010). Strategy: Process, Content, Context: An International Perspective. New Jersey: Cengage Learning EMEA. Watson, J.L. & Caldwell, M.L. (2005). The Cultural Politics of Food and Eating: A Reader. London: John Wiley & Sons Seijts, G. (2005). Cases in Organizational Behavior, London: SAGE. Bradach, J.L. (1998). Franchise Organizations. Harvard: Harvard Business Press. Ireland, D.R., Hoskisson, R.E. & Hitt. (2008). Understanding Business Strategy: Concepts and Cases, New York: Cengage Learning. Cohen, W.A. (2004). The Art of the Strategist: 10 Essential Principles for Leading Your Company to Victory, New York: AMACOM Div American Mgmt Assn. White, M. (2009). A short course in international marketing blunders [electronic resource]: mistakes made by companies that should have known better, New York: World Trade Press. Kleber, J.E. (2000). The Encyclopedia of Louisville, Kentucky: University Press of Kentucky. Hoskisson, R.E. (2008). Competing for Advantage, New York: Cengage Learning. Windsperger, J. (2004). Economics and Management of Franchising Networks, New Mexico: Springer. Robbins, S.P. (2001). Organizational behavior, Sydney: Prentice Hall. Read More