Unit 5 Full Assignment E Strategy
Unit 5 Full Assignment E Strategy
Unit 5 Full Assignment E Strategy
CONTENT PAGE
Section
Page No.
Introduction
3
Task 1
1.1: Explain the benefit of having E-strategy in Value store
5
1.2: Evaluate the contribution of an e-strategy to the achievement of Value stores
objectives
7
1.3: Discuss how to align an e-strategy with an overarching values stores strategy
9
Task 2
2.1: Analyse the business factors that underpin the requirement for an e-strategy in
value stores business.
11
Conclusion
33
Bibliography
34
Introduction
E-commerce has become one of the most popular tools to gain competitive
advantages over other organizations. It is being used to develop new markets,
interact with customers, communicate with trading partners, and primarily to
increase sales From a consumer and business aspect, electronic commerce can be
classified into two perspectives: business-to-consumer and business-to-business
perspective however, for each perspective of e-commerce, the success or failure of
its implementation is dependent on some key success factors. It is important for
Value Store to consider these critical success factors, which might affect the success
or failure of their own implementation of e-commerce. To enhance the efficiency and
effectiveness of Value Store, Value Store has use e-commerce to build their
business; electronic business has been used to carry out business strategies
however the nature of applications is different in terms of characteristics and
implementation.
Dominant Factors
Top management support &
commitment
E-commerce strategic goals
Investment appraisal evaluation
Employees skills & core competence
Empowerment & involvement
Customer centric approach
Cost of implementation
Organisational Factors
Value chain process
Enterprise IT experience
Quality orientation
Organisational culture
Organisational structure
E-commerce
implementation strategy
External Factors
Environmental Factors
Competition intensity
External support
Suppler/customer
pressure
Regulatory issues
Corporate governance
Communication
Factors
Target
Media
Message
Timing
Technological
Factors
Enterprise
integration
Compatibility
Relative advantage
Security
According to the implementers point of view, these critical factors should be
identified and clearly understood. Otherwise, achieving success with their
implementation will be difficult. Among these important factors, there is a group of
common and a group of specific factors that affect the implementation of businessto-consumer electronic business system. To succeed in the implementation of these
systems, Value Store should recognize these common and specific factors stated in
the graph above so they can deal with their operations.
The main objective of this study is to identify the common and specific success
factors and the implementation of e-commerce in Value Store in addition; the study
will provide the benefits of having e-commerce, evaluate the contribution, analyse
the business factors and discuss the alignment of e-strategy in Value Store.
Reduce the delivery time between payments made and time the item take to reach
the customers, increase responsiveness to the customers, i.e., strengthening the
business relationship between the customers and the shareholders of the business,
hence, increasing the company profitability.
Variety
Having an online shop is a big advantage; the company can put more items on
display. This will promote sales and encourage compulsive buying by customers.
The customers can get several brands and products without the hassle, the
company dont have stock all the products it sells, the can use fulfilment centres
and drop shipping companies. This will reduce the cost have stocking large
inventory; hence, the overhead cost will reduce thereby increasing profit and
efficiency.
The benefits of having e-strategy, include reducing the strain on the company
resources resulting in significant cost saving and increase in the level of productivity
and efficiency.
1.3: Discuss how to align an e-strategy with an overarching values stores strategy
Aligning e-strategy to the business is one of the key components for the success
and the survival of the business. In today fast moving economy businesses have to
implement the right strategies in order to gain a competitive advantage over their
competitors.
Strategic alignment model (Henderson and Venkatraman, 1999: 476)
Internal factors
Internal factors are controlled by the organization, the internal factors include:
External factors
Every business must identify, analyse and document the external factors that is
likely to affect the success of the business. The external factors can cause serious
financial issues for the organization, these external factors include:
Legislation
Economic trends
Customer trends
Economy
Sector
Corporate
Business unit
Department
I/T has become the backbone of every successful organization, I/T is nothing more
than capturing, processing and distributing information. Managers have to map out
the corporate model by doing so, mangers can determine exactly what the business
does and how they do it. The factors that managers need to identify during the
mapping and documentation process are:
Organisation chart
Flow of authority
The alignment process is not exhausted for this question but in the interest of time
and word limitation only culture and understanding the business was looked at,
there are other factors that should be taken into consideration during the alignment
process which we have not discussed, and these include the following:
2.1: Analyse the business factors that underpin the requirement for an e-strategy in
value stores business.
Businesses today are competing in a global market; most businesses now have an
online presence, reaching customers across the globe. Businesses have to develop
and execute a suitable business model for the company; the purpose of the model is
to define the way the business will deliver value to the customers. According to
(wisegeek, n.d) E-commerce refers to economic activity that occurs online. Ecommerce includes all types of business activity, such as retail shopping, banking,
investing and rentals.
Previous Studies Related to Success Factors of E-strategy, the successful
implementation of e-strategy may involve many factors, these factors can be
categories into three phase, these include, but not limited to the following. Only two
of the following phase will be look at in this question.
1.
2.
3.
Business Trends
Enterprise Collaboration
Organization Trends
Specialization
Running an electronic business means that the organizations must focus on what
they do best. It relies on developing product, brand and market share. To achieve
higher profit in a global market, the electronic business must specialize.
Skill Management
2.3: Develop a plan for an e-strategy that ensures value store to retain its
competitive advantage in a global market
In order for business to gain and maintain competitive advantage over their
competitors they need to use the right tool or tools that best fit the organization
nature of business. The tool that will be looked at in this question is Porters five
force theory, according to Porter (1980, 1985) and Porter and Millar (1985), a firm
develops its business strategies in order to obtain competitive advantage (i.e.,
increase profits) over its competitors. It does this by responding to five primary
forces:
Value store can use the porters five force to develop and enter the market where
there is less competition and where the market is fragile, for example, value store
may choose powerful buyers and sell them products that is less vulnerable to
substitute. The company position itself to be less vulnerable to competitors while
exploiting its competitive advantage, example Primark Primark has dominated the
market with its low cost products making it hard for other business to compete in
the same market.
Companies can also achieve competitive advantage by establishing barriers to
deter new entrants from entering in the same market by creating unique capital
intensive resources that new companies cannot easily replicate, example, EBay and
Amazon.
Companies also increase bargaining power over their customers and suppliers by
increasing the customers switching cost and reducing their own cost for switching
suppliers. The five force model provides a strong base for developing business
strategies that will generate opportunities, reducing cost while maintain a strong
competitive market advantage.
According to Porter (2001) reemphasized the importance of analyzing the five
competitive forces in developing strategies for competitive advantage: Although
some have argued that todays rapid pace of technological change makes industry
analysis less valuable, the opposite is true. Analyzing the forces illuminates an
industrys fundamental attractiveness, exposes the underlying drivers of average
industry profitability, and provides Insight into how profitability will evolve in the
future.
Differentiation
(e.g., Bundling)
Niche Products or
Innovation
Customer-Centric
Strategy
Expansion into a
Related Product Line
(e.g., Price Lining
and Smart Pricing)
Cost Leadership
Value-added
Products or Services
Promotion Strategy
Brand Appeal
Based on
Experiences and
Beliefs
Revenue-Sharing
Marketing
Strategic Alliances
Clicks-and-Mortar
Strategy
Threat of
Substitutes
Product
Differentiation
(e.g., Bundling)
Niche Products or
Innovation
Customer-Centric
Strategy
Price Discrimination
(e.g., Price Lining
and Smart Pricing)
Cost Leadership
Value-added
Products or Services
Clicks-and-Mortar
Strategy
Bargaining Power
of Suppliers
Value-added
Products or Services
Revenue-Sharing
Marketing
Outsourcing or
Strategic Alliances
Bargaining Power
of Buyers
Value-added
Products or Services
Customer-Centric
Promotion Strategy
Brand Appeal
Based on
Experiences and
Beliefs
Revenue-Sharing
Outsourcing or
Strategic Alliances
2.4: Specify the technical infrastructure required in an e-strategy plan for Value
store
Every company is online in todays fast moving economy, and deciding the right
ecommerce platform is one of the most important business decisions a company
will make. To plan appropriately for an e-commerce site, the company will have to
determine what they want to accomplish from the business perspective, identifying
the type of content to be placed on the website, and selecting the right hardware
and software for the platform.
This question will discuss the technical infrastructure required in an e-strategy plan
for Value store.
Value store have to decide what software to use during the development process
and whether or not to build the website in-house. If the company choose to build
their website in-house this will be a very cost effective approach as it will save them
cost of using a management provider. In-order to set up an in-house website the
company would have to decide the type of server to use and how the networking
system will flow throughout the organization.
A website will require the following infrastructure:
Hardware
Software
Networking
Hardware
The hardware requirements for an e-commerce website depend on a lot of different
factors, such as, number of transactions per second; number of hits per second;
number of queries per second; number of queries done by RDBMS per second;
number of pages served per second involving all of the above parameters.
Depending on the size of the company on the nature of the business the company
will have to think about having a back-up system. If the number of hit to the website
is low and depending on the needs of the business the website can be hosted on a
single machine. For a high traffic website like Amazon multiple servers and back
severs are needed just in case one server is down.
The following is a list of hardware required to start an online store:
Web servers
Security servers
Application servers
Database servers
Windows, Linux, Unix (Solaris, BSD, IBM etc), OS/390, VMS, Be, Mac OS, QNX,
VxWorks open source.
Web-server
The component of a web server is hardware and software in-order for value store to
decide what hardware and software to use the company have to decide what is the
expectation of the website. The market is divided into web server and internet
servers.
Apache HTTP server
Microsoft internet information server
Netscape enterprise server
The graph below is attempting to illustrate the basic functions of a web server
Networking
The graph below will attempt to explain more about how the network architecture
works.
3.1 Assess the resource requirements for implementing an e-strategy in Value store
The above Gantt chart was created using smart sheet, the chart shows the design
and implementation process, these process are listed below.
Feasibility studies
According to Investopedia (n.d) Feasibility studies is the ability to complete a project
successfully, taking into account legal, economic, technological, scheduling and
other factors. This is where value store do their ground work to find out the benefits
and drawback of having an e-commerce site.
Planning
Planning is where Value store I/T specialist think and organise the required activities
required to reach the company goals and objectives. Planning can be broken down
into three stages these are:
(1) Defining the mission and building of vision
(2) Defining and setting objectives
(3) Developing and implementing of the plan process.
Analysis
Analysis is the forecasting benefits and cost of having an e-commerce website, ecommerce offer competitive advantage for the business. The main benefits of
having a web base business is, the site is open 24hours for business without the
overhead cost that comes with having a physical shop.
Prototype
Prototyping is a prototype of the website, at this stage the testing and final design
will be implemented.
Implementation and Audit
3.3: Assess how existing business system need to be adapted to accommodate the
requirements of an e-strategy in Value Store
The internet has contributed to the change in how companies do their business;
more people are now turning to the internet for just about everything they need.
Traditionally businesses use to trade from a brick shop incurring large overhead cost
and they were not able to compete with their competitors effectively.
Organizations operate in industries with different limitations, opportunities and
strategies. The structure adopted by any organization should fit the purpose of the
organization while accomplishing its intended goals. Businesses have used the
traditional business model since the Industrial Revolution. This model systematizes
key areas within the business around an organizational design intended to optimize
growth.
Strategy before e-commerce
The concept of e-commence has just arrived in Value Store; therefore there is a
strong need to understand the concept of e-commerce in its real sense. E-
To be successful online the Traditional rules of business still apply and should be
used within e-commerce, which should be integrated with traditional business
processes and must be seen as technology helping to make the business more
effective, efficient and easy to use
E-commerce can be more than technology, and if used as a strategic tool; it can
provide organizational benefits though gains in productivity, market share or even
bottom-line profitability.
Before Value Store can successfully integrate e-strategy in its existing business
system, the company need to consider the following question.
How to establish the appropriate internal incentives for the online businesses
to flourish without damaging the existing business system?
(Slywotzk, 2000), revealed that adoption of e-commerce is necessity for the future
business. In fact, it is a change and it is adoptable.
Changes required
Information architecture
Design
Construction
Architecture
At the architecture stage the I/T team has to think about the navigation and layout
of the website. The company have to think about what the customers want and how
best they can satisfy the wants of the customers. The website has to be user
friendly and the navigation process should be hassle free for the customers, once
the company has considered and resolved these issues the site will be able to
also important is these services interaction: it should not be broken; otherwise the
whole business comes to a halt.
Value Store, payment processor/billing, customers Helpdesk and so on - all these
services must be not only visible to the person monitoring the system; they should
also interact with one another without interruptions. E-commerce services are often
hosted weather internally or externally. The more services e-commerce business
uses, the harder it is to detect the points of failures, the more cryptic are possible
errors.
Monitoring includes but not limited to the following:
Site Functionality
The functionality of the website should be constantly monitored to prevent any
down time or page errors, Value Store constantly adding new products and pages to
their store, and want those items to sell therefore customers must have the ability
to purchase items online 24/7
Speed/Performance
Similar to functionality, the performance of Value Store website is monumental in
keeping customers buying. No online shopper wants to wait 3-5 minutes for their
desired item to load so they can add it to their shopping cart. If the online store
does not perform, the customer wont buy. Value Store need monitoring tools that
take into account page analytics, so they may be able to add the necessary speed
requirements based on past and current traffic to the site.
Reputation
Value Store need to take into account the repercussions of site failures, and monitor
the site properly to avoid and quickly address any problems.
Checkout
The checkout process need to be closely monitored even if the speed is adequate, a
broken or non-functioning checkout will ruin a sale. In this case, a $500 sale is the
same as a $25. A broken checkout will affect both sales the same. Online monitoring
is clearly important in this regard.
When it comes on to monitoring there are several areas of an ecommerce site that
requires monitoring. Value store need to monitor the site security, risk, functionality,
infrastructure, customer behaviour and so on. The monitoring process of an ecommerce site is endless and requires continuous monitoring.
E-commerce gives value store greater flexibility, increased productivity and control
over y the business. The company has improved control over inventory and order
processing, information can be supplied to customers within seconds, they can
quickly update pricing and stock data as things change, and best of all transactions
can be processed faster to expedite billing.
Customer service
An e-commerce site spells service improvements for value store customers and that
means increased customer satisfaction and for value store e-commerce is the best
way to gather, tracking and targeting new customers.
Conclusion
The internet has become one of the major channels for trading and selling
products. The internet is a cost effective way of selling products while gaining
worldwide presence, electronic shopping generate new business opportunities for
both the business and the customers. Customers are able to compare prices across
the internet with just the click of a button; this could not be achieved with a physical
shop. The internet makes it possible for customers to shop within their budget and it
allow business to build and maintain good business relationship with customers and
other businesses.
Website design is very important to companies who have an online presence like
Value Store having a good design will help promote products while serving and
exceeding customers expectation. Every website must be design to provide the
user with an easy navigation, easy retrieval of data and necessary feedback.
A good shopping cart must be user friendly and convenient for the customers to
view contents, adding and removing items as they see fit. This report provide an
insight on the design, implementation and the benefits of having an ecommerce site
in Value Store
Bibliography