ZETA Communities E-Business Strategy Analysis

                      Faculty of Science, Engineering and Computing

                          e-Business Strategy and Implementation

                                      Project Title:  ZETA Communities

                                 E-Business Strategy Analysis

Table of Contents

Executive Summary

Introduction

Section 1 – Strategic Analysis

PEST Analysis

SWOT Analysis

PORTER’S FIVE FORCES MODEL

Value Chain Analysis

Section 2 – e-Business Tools required

ERP (Enterprise Resource Planning)

ERP Functioning in ZETA

EDI (Electronic Data Exchange System)

EDI Functioning in ZETA

CRM (Customer Relations Management System)

CRM Functioning in ZETA

Section 3 – Organisational Transformation and Change management

Conclusion, critique and discussion

Strategic Management Planning is about understanding the business enviornment and choosing the direction for the future of a business organisation. We analyse the type of business the company is in, the current competitors, current performance and how the business and markets are changing.

This report describes a strategic e-business initiative based on ZETA communities case study. It is divided into three parts which includes business and environmental analysis of the ZETA using appropriate business analytic tools taught in the module such as PEST, SWOT and Porters 5 Forces Model to analyse the current competitive enviornment and identifying opportunities. Second part would be on suggestion on implementing certain information systems tools and concepts to provide competitive advantage and customer satisfaction. The third part of the report focuses on assessment of organisational transformation focussing on people, processes and organisational aspects and change management issues.

ZETA or Zero Energy Technology and Architecture Communities was launched in January 2008 by Naomi Porat, marc Porat and Shilpa Sankaran. ZETA’s goal was to create new method for delivering affordable, energy efficient, urban residential and commercial buildings using offsite construction.

The co-founders saw a huge opportunity to improve upon the traditional building methods utilizing factory construction to achieve higher quality, 50 percent faster time to maker and reduced costs, while delivering improved health and environmental performance. Naomi Porat is the CEO, Marc Porat is the Chairman and Ship Sankaran is the Vice president of marketing and communications. ZETA established a research partnership with Department of Energy’s (DOE) “Building America program”, which was a widespread initiative to promote the development of cost-effective, energy efficient building strategies. Current issues in the market are high cost of urban housing, inefficient construction practises and rapidly rising CO2 emissions.

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This venture started in 2007, during this time US was facing one of the largest housing crises in the recent history. Both the local and national real estate markets were at near standstill, public funding for affordable housing had all but disappeared and housing prices were falling every day. Global levels of carbon dioxide were growing exponentially, reaching the highest levels in human history at 380 parts per million by 2006. The liberal distribution of subprime mortgages in 2003 through 2005 sent home ownership rates and home values skyward, creating what is now known as the U.S. housing bubble. It was at the intersection of these various market forces; the crash of the housing bubble, a deepening economic recession, rising energy prices and growing interest in green building practices when Marc, Naomi and Shilpa were crafting their new venture. (STANFORD BUSINESS SCHOOL, 2011)

The aim of this part is to provide an understanding of the forces and influences upon the organisation in order to be able to identify the strategic choices. So, the main objective is to analyse and understand the Enviornment, Culture and Resources of the ZETA and the construction industry.

The three tool we are using today are

PEST Analysis – To analyse the nature of the environment

Porter’s Five Forces Model – To analyse the competition in the market

SWOT Analysis – To analyse the opportunities and threats.

PEST Analysis

The Pest Analysis is the analysis of the environment in which a business operates or tends to offer its trade. It is an analysis of the external macro-environment that affects all firms. P.E.S.T is an acronym for the Political, Economic, Social and Technological factors of the external macro- environment. Pest analysis gives you an overview of the whole situation the business might be in. Precisely it’s a bird’s eye view of the stimulus and the scenarios that surround your trade and business.

Political

 Economical

Social

Technological

The United States green building council (USGBC) was founded in 1998 which had the goal of establishing a standardized set of national green building guidelines as well as raising awareness of green building principles. The USGBC subsequently created Leadership in Energy and environmental Design (LEED), a nationwide green building certification system.

In 2007, US was facing one of the largest housing crises in the recent history. Both the local and national real estate markets were at near standstill, public funding for affordable housing had all but disappeared and housing prices were falling every day.

The cost of building materials rose almost 200 percent since 1983, with half that growth taking place in the four years between 2004 and 2008.

labour union membership in construction industry had declined consistently over the previous thirty years a reaching an all-time low of 13 percent of total wage and salary workers in 2006.

Compartmentalization prevents industry stakeholders from sharing or retaining the knowledge gained from newly demonstrated innovations and even from natural ingenuity.

A bay area-based company called ConXTech manufactured an innovative structural steel system which allowed buildings to be constructed at the rate of one floor per day, versus conventional one floor per week.

The idea of a prefabricated home was introduced in the mid twentieth century with approximately 200,000 prefabricated homes, manufactured by more than 70 companies by the end of World War 2.

SWOT Analysis

SWOT Analysis is a powerful tool that can be used to develop a business strategy by considering all the business’s strengths and weaknesses, as well as opportunities and threats it faces in the marketplace. We classify there again as Helpful and Harmful and Internal and External. Existing business can use this tool to access changing enviornment and respond proactively. (BERRY, Tim)

 

Helpful

Harmful

Internal origin

Strengths

Effect design, Energy efficient building envelope

Net Zero Energy Mechanical System

Sustainable materials used

Waste water heat recovery system.

Z-Therm, was an energy monitoring and control system which was tied on to the mechanical and electrical controls to optimize the indoor temperature and humidity. It can be controlled and monitored using an online interface.

Weakness

 

Although the company had healthy projects, the factory continued to operate far below maximum capacity, employing only 12-15 workers on most days.

ZETA’s dependence on consultant obstructed the company’s ability to control the end-to-end construction process. In contrast it actual replicated the facing of the conventional model in many ways

External

origin

Opportunities

ZETA’s most important milestone-the four-story multifamily prototype had been delayed for over a year due to financing and building entitlements.

 

Threats

 

Many of the competitive builders have been in the business for 30-40 years and as such had refined their manufacturing and procurement process to the porin that they could offer homes are or below $100 per square feet while higher end luxury modular homes were marked up to $150 per square feet.

Porter’s Five Forces Model

The Five forces Model is a framework for understanding the competitive forces at work in an industry and can be used for identifying your strategies potential profitability. This business tool was created by Harvard business school professor Michael porter to analyse industry’s attractiveness and likably profitability. The five forces that make up the competitive enviornment are:

Rivalry among existing competitors

Threat of substitute products or services

Bargaining power of suppliers

Threat of entrants

Bargaining power of buyers

Rivalry among existing competitors

ZETA’s pioneering role in the industry has given few head-head competitors in this industry such as Pulte/Centex, Palm harbour, champion, Clayton, toll brothers, Guerdon, Project Frog, Clarum and Living homes. Pulte had recently announced a collaboration with the residential Energy Services Network (RESNET), a well-known independent authority on home energy performance, to provide home energy efficiency labels to help consumers compare energy saving across their homes. This has led Pulte to be ranked second in a 2010 study evaluating, the green building practises of the country’s ten largest home builders based on energy use, building material use, eater use and land use. Silvercrest built between 200 to 300 homes every year at a price of $70-$100 per square foot (not including transportation, installation or site preparation costs). Silvercrest’s homes could be found in subdivisions throughout California and the Pacific Northwest and included primarily single family and town home products. Project Frog, founded in 2006, and backed since late 2008 by New England’s Rockport Capital Partners, had made inroads with the school’s market using state of the art energy efficient and green materials ―kits‖ for advanced modular buildings. Like ZETA, Project Frog had broadened its focus, first delivering exclusively to the educational market and more recently expanding to the light commercial sector.

Supplier Power

 ZETA has one main investor called North West Venture Partners, a bi-coastal venture capital company. They were interested in ZETA because they were the only investor that understood ZETA‘s idea of a 50 percent reduction in time to market, coupled with a new energy efficient building technology would be a game changer in the construction industry. They invested $5 million.

Buyer Power.

In 2007, US was facing one of the largest housing crises in the recent history. Both the local and national real estate markets were at near standstill, public funding for affordable housing had all but disappeared and housing prices were falling every day. This state of economy meant that the demand of ZETA’s product would be limited, no matter how limited the solution will be.

Threat of Substitution. 

In 2009, American Modular Systems, a national modular building company that manufactured commercial and institutional modular buildings, developed a green classroom product, Gen7. Gen 7 was the first modular classroom to receive the California High Performance Schools (CHPS) stamp of approval for new school construction. Other players such as Meehleis, Enviroplex and William Scotsman had been in the modular building space for over a decade and had just recently begun to adapt their classroom products to a more environmentally-friendly design

 

  Threat of New Entry.

 A new company to enter into the market currently is a bit tough because, other competitors in the construction business have 30-40 years of experience and reputation being in the business and have suppliers who have trust in them. For a new company to enter this market its brand, arrange suppliers, arrange funds and get enough profit to run would be a bit tough in the current scenario.

Forces

Current situation

Near Future

Rivalry among existing competitors

High

High

Threat of substitute products or services

Low

Medium

Bargaining power of suppliers

High

High

Threat of entrants

Low

Low

Bargaining power of buyers

High

High

Value Chain Analysis

Value chain analysis is a way to visually analyse a company’s business activities to see how the company can create a competitive advantage for itself. Value chain analysis helps a company understand how it adds value to something and subsequently how it can sell its product or service for more than the cost of adding the value, thereby generating a profit margin. In other words, if they are run efficiently the value obtained should exceed the costs of running them i.e. customers should return to the organisation and transact freely and willingly. (VISUAL PARADIGM, 2016)

ZETA ‘s goal is to create a new method for delivering affordable, energy efficient, urban and residential and commercial buildings using offsite construction.

Value proposition describing the added value and the competitive advantage it provides

Enhance or redefine products and services

Customer profitability

Super service

Reliability

Convenient solutions

Customisation

Clear description of the e-business tools that are needed for the new IT enabled service described earlier in the value proposition and the way that these tools could improve the current situation in terms of efficiency, effectiveness, innovation and justification of the proposals • Justification and feasibility of the proposals according to the environmental analysis carried out in section 1 (explain how the business tools will help the organisation at its strategic direction)

ZETA can be benefited by introducing some new e-business too to improve the business efficiency, communication and resource planning.  An ERP system, an EDI system and a CRM system can do this function. I will go into each one in details below.

ERP (Enterprise Resource Planning)

ERP systems ink front office (CRM) with back office (operational support). This system is used by organizations to manage day-today business activities such as accounting, procurement, project management and manufacturing.  They are usually designed around a common, defined data structure that has a common database. ERP works on the principle of central coaction of data for wide distribution rather than several standalone databases.  (ORACLE, 2013)

Business Value of an ERP system incudes

Improved efficiency – Through a common user experience across many business functions and managed business processes

Improved business insight – From real-time information generated by reports

Consistent infrastructure – From the back office to the front office, all business activities have the same look and feel

Lower management and operational costs – Through uniform and integrated systems

Reduced risk- Through improved data integrity and financial controls

Exceed existing eves of customer satisfaction.

ERP Functioning in ZETA

ERP system in ZETA can hep the ZETA employees with a helping hand as the data maintained in spreadsheets and excels needs a lot of manual work and updating requires a lot of time. ERP can be accessed from anywhere and anytime from any device and the reports can be readily printed from the system, thus by saving time and increasing productivity. ERP system can help the management make prompt and strategic business decisions as they have accurate date in a timely manner. It will provide data security by making the information available only to those employees who have been assigned the rights to view them. Also cuts down operational cots by maintaining co-ordination between various departments such as manufacturing, construction and business development.

 

EDI (Electronic Data Exchange System)

Electronic Data Interchange (EDI) enables the exchange of business documents between organisations in a standardised format. The purpose of EDI is to eliminate duplicate data entry and to improve the speed and accuracy of the information flow by linking computer applications between companies. (NETEDI, 2009)

Business Value of an EDI system incudes

EDI is cheaper than traditional paper-based methods

Can Eliminate manual entry and reduce errors

Office employee’s workload can be lifted from doing manual paper work

Increases operational efficiencies and data accuracy

Exchange of business documents such as Purchase orders, shipping manifests, invoices and receipts between trading partners through computer networks are faster than traditional mail

Just-in-Time Support- Speeding up communications enhances intercompany operations, which significantly reduces inventory costs. Only the necessary items are shipped by the vendor and arrive directly at the manufacturing or assembly line.

EDI is an application to application layer protocol and requires four tasks in order to create and deliver and EDI message.

Mapping – Identifying the elements within the database that are needed.

Extraction – The data is extracted from a database and restructured into a flat file

Translation – Arranges the data in the exact structure to meet the EDI requirement.

Communication – Actual transmission of the EDI message which is controlled by communications software

   EDI Functioning in ZETA

ZETA raises a purchase order of the raw materials for a new construction project

This is converted into an EDI format and then transmitted to their supplier electronically

The supplier receives the data as a Sales order in EDI format.

The Sales Order can be read, printed or processed into an accounting system

The Order can now be turned into an invoice which can be sent back to ZETA

electronically using EDI.

CRM (Customer Relations Management System)

Customer Relationship Management is a strategy that business used to manage interactions with customers and potential customers. CRM System is a tool that helps the organisation streamline processes, build customer relations, increase sales, improve customer service and increase profitability. CRM too is used for contact management, saes management, productivity and more. It digitises processes and automates tasks to improve the efficiency in customer relationship management. (SALESFORCE, 2016)

CRM System can hep ZETA in various ways such as:

Enhanced contact management

Cross-team collaboration

 Heightened productivity

 Empowered sales management

 Accurate sales forecasting

 Reliable reporting

 Improved sales metrics

 Increased customer satisfaction and retention

 Boosted marketing ROI

 Enriched products and services.

Three phases of CRM

Acquiring new customers

Enhance the possibility of existing customers

Retaining profitable customers

CRM Functioning in ZETA

For ZETA a CRM system can increase sales through telesales, cross-selling and up-selling, identifying specific customer needs and provide any customisation for the project if possible. It can be used to provide a necessary information to influence or make a purchasing decision of the property. Also, can provide ongoing customer support with the Zero Energy homes pre and post-sale. You can eliminate quiet a bit of paper work through this system (except for contract signing), such as electronic bill presentation, payment and management. As CRM holds previous customers information, ZETA can use this to provide loyalty schemes and offers

Strategic change means the directions and developments of a long-term vision of a firm’s strategic intent to change. In this section we talk about how the organization will change with the new e-business strategy in place and how ZETA will do this transition smoothly.

A manager or leader can help achieve strategic change by leading and implementing organizational challenges, in our case I think Shilpa Sankaran is qualified and experienced enough to do this role. Her work in management consulting to General Motors, Wells Fargo Bank, AAA, Nike, Verizon Wireless, and Blue Cross Blue Shield Association has proved that she is we capable to do this role.

The change process consists of 5 parts

1)      Recognise change

2)      Diagnose change

3)      Plan change

4)      Implement and review change

5)      Sustain change

McKinsey 7s Model (7s):

We will follow Mckinseys 7s mode to decide the change plan. This framework upholds the viewpoint that there are multiple factors which influence on an organizations ability to change. It is a powerful expository tool as it highlights several organizational interconnections like staff and skills, strategy and systems which have critical significance for affecting organizational change. (MANAGEMENT STUDY HQ, 2011)

 McKinsey’s 7s can help an organization to:

Determine how it is going to achieve its target goals

Identify as to how it is going to align departments and processed during merger or acquisition

Improve the style of the organization

Examine the effects organizational changes within the company

Implement policies to improve the skills and competencies of the employees

McKinsey’s 7s model

Current Stage

Strategy

50 percent reduction in time and new energy efficient building technologies

Structure

ZETA has a functional structure

Systems

z-Therm, offsite construction, heat recovery system

Skills

Architecture, construction, management, engineering

Staff

Some staff are full time and others are subcontractors

Style

Quick efficient and quality.

Shared values and goals

Delivering affordable, energy efficient, urban residential and commercial buildings using offsite construction

References

BERRY, Tim. What Is a SWOT Analysis? [online]. [Accessed 22 Nov 2018]. Available from World Wide Web: https://articles.bplans.com/how-to-perform-swot-analysis/>

NETEDI. 2009. NetEDI. [online]. [Accessed 26 Nov 2018]. Available from World Wide Web: https://www.netedi.co.uk/edi/>

ORACLE. 2013. What Is ERP? [online]. [Accessed 26 Nov 2018]. Available from World Wide Web: https://www.oracle.com/uk/applications/erp/what-is-erp.html>

Pest Analysis. 2002. [online]. [Accessed 19 Nov 2018]. Available from World Wide Web: http://www.netmba.com/strategy/pest/>

SALESFORCE. 2016. What is CRM? [online]. [Accessed 26 Nov 2018]. Available from World Wide Web: https://www.salesforce.com/uk/learning-centre/crm/what-is-crm/>

VISUAL PARADIGM. 2016. What is Value Chain Analysis? [online]. [Accessed 26 Nov 2018]. Available from World Wide Web: https://www.visual-paradigm.com/guide/strategic-analysis/what-is-value-chain-analysis/>

Can SMEs Improve Their Performance by Aligning Their E-business Activities with Their Business Strategy?

Table of Contents

Part 1- Research Questions  2

Introduction  2

Research Methodology 3

Part 2- Proposal and Justification for an e-business strategy 4

1.Outline the strategy expected in the organisation  4

2.Main changes expected in the organisation  6

2.1.Promotional Alliances and Advertising 6

2.2.Improving customer service through distribution Center 6

2.3.Pricing Strategy 6

2.4.Product Line Expansion and Service Improvement 6

2.5.Competitor Strategies 7

2.6.Implementing conversational commerce 7

3. Implementation plan for the organisation & how changes will be achieved 7

4. Benefits for the organisation and how it can be measured 9

4.1. Measurement of E-business Evolution model 10

5. Conclusion 12

References 13

Grading sheet 14

Part 1 – Research Questions

Can SMEs improve their performance by aligning their e-business activities with their business strategy?

What factors are creating a successful e-business?

Introduction

Electronic commerce is reshaping numerous parts of the business and the public activity. Organizations need to adapt their strategies to the new realities that they need to be focused in the marketplace. Online business is another method for leading business and its impact is expanding each year (Chong, 2008).The purposes behind executing an e-commerce strategy can fluctuate from company to company. According to (Xu and Quaddus, 2009), while in the enormous organizations the main intentions are to improve effectiveness in their internal procedures; small organizations are more concerned about the competitiveness. Various business activities such as imparting, transacting, environmental scanning and collaborating with different companies are currently done through the web and the internet.

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The intricacy of innovative decisions, execution difficulties, personnel training costs and the consistent refreshing of frameworks request that organisation focus on their e-business activities upon their business strategy. Managers in the small organizations need to conquer the barriers and understand the advantages from online business so as to avert the danger of aggressive impediment in their businesses (Abid et al, 2011; Stockdale and Standing, 2004).

Recent research has appeared in spite of innovation encouraging improved business practice in terms of developing electronic markets, electronic data interchange and internet commerce (whiteley, 2000). Conversational business may include both human interaction just as bots. Conversational commerce likewise incorporates all discussions identified with customer commitment and conversation chat on a website or on mobile interaction on Twitter, Facebook or Instagram including the sharing of a connection, on offer or the sending of a purchase base, and so on. A number of SMEs have not exploited this new method of carrying out business (Quayle, 2002).

 

Research Methodology

E-business strategy development methods, this method is designed to help organizations in re-examining an organization’s corporate technique to expand its e-business strategy. It was found that business heads require a strategy that adventures qualities, limits shortcomings, gains by circumstances, and limits dangers to efficiently modify business procedures to quickly changing business conditions. The strategic breakout methodology consecutively pursues four coherent stages: start, analyse, breakout, and transition (Hackbarth and Kettinger, 2000). The start stage imagines potential vital change, confirms top administration support, and decides an undertaking plan. Analyse stage assembles data about the qualities and shortcomings of the organization just as circumstances and dangers present inside the organization’s business.

The breakout stage details an E-business system with the target of breaking out of the crate by utilizing E-business innovation to change procedures and individuals to more readily contend in a dynamic worldwide commercial center (Hackbarth and Kettinger, 2000). The transition stage perceives the truth that the breakout procedure may not be promptly reachable on account of an organization’s reluctance to change, absence of accessible assets, or deficiency of qualified individuals.

Part 2 – Proposal and Justification for an e-business strategy

(Option e – course work specification)

According to the (Hackbarth and Kettinger, 2000) the term e-business instead of e-commerce, because ecommerce has turned out to be synonymous with just executing business over the Internet, while e-business includes on a very basic level re-examining the plan of action to change an organization into a digitally networked enterprise (Higgin, 1999). An e-business is an enterprise with the capacity to exchange value (products, administrations, cash, and information) digitally. It has appropriately planned business forms for this better approach for leading business.

E-business is a new method for doing business that includes connectivity, transparency, sharing, and integration. It associates the extended enterprise through a universal digital medium to accomplices, providers, and clients. It requires the integration and alignment of business forms, technology, and individuals with a consistently developing e-business strategy. Turning into an E-business does not occur medium-term. As organizations evolve, they pass through three particular levels of e-business strategy improvement and competence.

1. Outline the strategy expected in the organisation

The most significant piece of operating a successful online business is to begin with a plan. Going in aimlessly are significantly more likely to fail. The organisation also layout a total setup of the costs that would be engaged with beginning and operating the web based business. Many organizations are still at Level I (Experimentation), whereby singular divisions have taken an innovative lead in creating disengaged Internet applications. These islands of Web innovation are not firmly attached to corporate procedure or a companywide e-business strategy.

Numerous industry leaders (e.g., Wal-Mart, Seagram’s, CISCO, and Tesco Stores) have effectively moved to Level II (Integration). These organizations join e-business to help their present business strategies by integrating across functional departments. Their focus is on the immediate help of existent business process.

Level II organizations are driven by the guarantee of cost decreases, income upgrade, and expanded business support of existing working models. Utilizing advances such as virtual private networks (VPN), electronic data interchange (EDI), electronic funds transfer (EFT), and Web-based order fulfilment, and these organizations accomplish linkages with clients and providers. The shared factor in these successful Level II e-business organizations is a business process view attached legitimately to their primary concern and a culture that constantly hones process effectiveness with Information Technology (IT) advancements. To move from Level I to Level II, organizations must try to connect their corporate strategies with the scattered digital initiatives occurring throughout the organization.

(Hackbarth and Kettinger, 2000)

Table1: Levels of E-business Strategy

Level III organizations enable themselves by utilizing e-business strategy to drive corporate strategy. Organizations grow between big business process linkages between clients, providers, and partners to make seamless networks. The integration of these linkages is determinedly more transparent, with sharing and trust being much increasingly typical. The value chain progresses toward becoming interconnected so that new revenue streams are distinguished and created, client satisfaction increased, and customer service dramatically improved.

Becoming a Level III organization symbolizes the changed organizations of the twenty-first century that utilization “E-breakout Strategies” to build stronger customer ties, exploit intellectual capital, and influence agreeable relationships with competitors. To accomplish this win-win approach, organisation should persistently react to strategic threats and gain by market opportunities.

2. Main changes expected in the organisation for successful e-business

2.1. Promotional Alliances and Advertising

Promotional alliances and advertising were significant gadgets utilized early on by the organizations in their attempt to attract visitors. A promotional alliance is essentially an advertising and promotion contract combined with a long-run relationship. Web partners give connects to the organisation web site and advance the firm’s items. Investments in promotional alliances and advertising have lessening minor returns: investments early in the company’s life have a more positive effect on the firm’s value than those later on.

2.2. Improving customer service through distribution Center

Offline customer service center and distribution center extension includes renting or purchasing bricks-and-mortar facilities to warehouse products and handle transporting and administration. The advantage of offline customer service center and distribution center extension is that more clients can be served and shipping times can be diminished. The expense of offline extension is resolved by the opportunity costs of the facilities being acquired or rented and the resources utilized in the administration effort.

2.3. Pricing Strategy

A firm endeavouring to expand sales may bring down costs to attract clients. However, price decreases are effectively imitated, prompting price wars that lower everybody’s benefits and provide nobody with a relative benefits. Price decreases are not effectively turned around in light of the fact that competitors respond by bringing down their own prices. Further, price decreases are normally promoted so as to increase their impact, thus they can’t be switched without inducing a loss of reputation among consumers.

2.4. Product Line Expansion and Service Improvement

One of the fundamental issues firms face when entering new environment is that they don’t know how shoppers value the different items and services the firms can present. Subsequently, botches are likely, and we ought to watch numerous activities that lower esteem. Further, numerous activities will have close to nothing or no effect on value. If product offering extension and service improvement programs prevail in general, achievement can be followed to a moderately modest number of successful activities.

2.5. Competitor Strategies

Most techniques intended to attract additional clients draw a few clients away from competitors. In general, most strategies intended to build a firm’s value decrease its competitors’ values: probably a portion of the value picked up is at the contenders’ cost. This adverse impact on a firm’s competitors is well on the way to be seen when the procedure influences the competitor’s fundamental lines of business. The general size of the organizations additionally matters.

2.6. Implementing conversational commerce

Two trends-the detonating fame of mobile messaging apps and advances in artificial intelligence are coinciding the link another generations of tolls that empowers brand to speak with clients in incredible new ways at decreased cost. Retailers and technology organisations are experimenting within chat bots, powered by mixes of AI and natural language handling and live administrators to give client service sales support and other trade related functions.

3. Implementation plan for the organisation and how the changes will be achieved.

Effective alliance promoting includes planning the qualities of various organizations so as to satisfy a market need. This requires critical pre-planning, just as a continuous exertion to keep up the new business relationship. It can be implemented by using some crucial elements such as select the correct accomplices, establish joint advertising duties in advance, teach “internal customers”— sell the alliance to the rest of your organization and plan long-term programs & aim for long haul results. At present, advertising and promotions on the World Wide Web are practically ordinary.

Organizations are creating Web pages in some cases just to appear up-to-date and also firms prefer telemarketing advertisement in rise. The majority of business begin with Facebook Ads or Google Ad words is the most famous and easy to use stages for advertising.

Figure 1: E-business Ladder for SME

Nowadays, the distribution center is the place the most significant piece of business happens and making clients cheerful. That is on the grounds that distribution centers are presently fundamentally in charge of getting the correct item to the correct clients. Empowering Omni channel strategies like BOPIS, or the converse, requesting a thing in store to be dispatched to your home.

In the firm website must include high quality of images and photos to attract the visitors. Outside the physical world, clients can’t touch the item and are making on their purchasing choices altogether dependant on item image and reviews. Appearing visible thumbnails in the search items page – this will enable clients to locate the ideal item in a single tick and improve thought of what are you advertising.

Customer Relationship Management (CRM) software has useful for many large and medium enterprises to improve customer relations. Intuitive voice reaction innovation is another enhancer for CRM in e-business. It can impersonate most activities of live operators, for example, recognizing clients by name, inquiring for recognizable proof check, talking in any dialects, or interfacing with a live specialist whenever suitable. This new innovation can even permit consider focuses to contact their clients all the more every now and again to offer new administrations and improve the connection between the organizations and their client (Lubben, 2006).

Channel Implementation – Picking the most proper and viable channels is another significant strategy that firm must accomplish. Organisations should continually assess the potential channels accessible to them. This implies they should legitimize which ones they should utilize and how well they are utilizing those they have picked (Nguyen and Newby, 2007). Perceiving these clashes is certainly not a hard activity yet how to improve or make another strategy requires consideration and research. Companies can utilize the road map matrix of looking at the old business technique mapping to the new business strategy mapping to accomplish this acknowledgment.

Block chain today, can be effectively regarded as a standout among the most secure platforms. Cyber-attacks and information theft has expanded ten times, there is an unavoidable danger of losing clients information. Consequently, embracing block chain is an absolute key to tackling these difficulties. Block chain can be broadly utilized to comprehend supply chain issues like recordkeeping, tracking of items as a less corruptible and better option in contrast to the unified database.

4. Benefits for the organisation and how it can be measured

The web and e-business have turned out to be progressively diffused all around, uniting nations into a worldwide organized economy (Gibbs and Kraemer, 2004). While there are various benefits of leading business on the web, the most prominent ones are: 1.It offers direct connections with clients, providers and merchants and encourages exchanges; 2. Encourages data exchange; 3. Empowers organizations to grow new items and services for existing and new clients (Walters and Lancaster, 1999).

The benefits for the e-business organisations shown in Table 2.

Benefits

Description

Improved day to-day productivity

Minimal effort everyday activity and improved access to items and services from clients

Save cost

By improved client services, less staff and time to keep up client activity; diminished material costs

Achieving enormous number of clients

Organizations can achieve new markets in different locales and nations. Firms can expand their marketplace.

Improved client services

The organizations can offer assortment of new service contributions and improve the quality, with diminishing the time.

High capacity to compete

Through web based business independent venture can contend at a similar dimension as the biggest by being more flexible.

Improved distribution channel

Small organizations can widened their supplier bases using e-marketplaces.

Increased sales

E-commerce prompts expanded sales.

Increased adaptability of communication

E-business have new potential outcomes for communication between partners.

Better access to data

Expanded capacity to get data about clients and providers, expanded data exchange.

Better consumer loyalty through interesting items

Tailor extraordinary consumer products and services to people prompts better consumer loyalty.

Table 2: Benefits of E-business

4.1. Measurement of E-business Evolution model

The E-business Measurement Evolution model comprises of nine phases which can help SMEs to comprehend the dimension of e-business in their firm (Abdullah et al., 2018).

Stage zero methods the business does not have web access.

Stage one (Emails) implies the business does not have a site but rather gets to data and services on the web and uses email for communicating.

Stage two (Social Media) implies the business has pages on interpersonal organizations, for example, Facebook and utilizes these pages to promote their items and services just as to incorporate data about the business and contact information.

Stage three (Websites) implies the business has it’s possess sites which just incorporate exceptionally essential data about the business; depends on clients initializing contact for additional data.

Stage four (E-commerce) implies clients can get to progressively point by point data about products or services and clients can purchase and pay for product from the site, be that as it may, the site isn’t connected to inside frameworks and requests are handled manually.

Stage five (Mobile Apps) implies the business has created versatile applications which incorporate their item and the shopper can buy products and services through the application.

    

                                                 (Abdullah et al., 2016)

Figure 2: E-Business Evolution model

Stage six (Cloud Service) implies the business uses cloud services to store their documents, software and applications services. The business will probably get to the applications and services over a scope of devices and systems from anyplace.

Stage seven (E-business) implies the on-line “store” is incorporated with different business frameworks, for example order processing, and satisfaction etc.

Stage eight (Transformed Organization) implies web innovation drives the business inside and remotely, and is utilized to deal with all processes start to end more viably and effectively (Abdullah et al., 2018).

5. Conclusion

E-commerce is a special open door for SMEs to extend their abilities and to encourage business development. E-business significantly and deliberately changes traditional business models. Organizations are currently seeking after increasingly concentrated and intuitive relationships with their business partners: providers and clients. Focused conditions and pressures on worldwide market are constraining organizations to look for strategies of streamlining the whole value chain. To contend successfully, organizations should fundamentally change its inside and outside procedures. These objectives could be come to by concurrent remodel of business processes and execution of electronic business arrangements.

References

Abdullah, A., Thomas, B., Murphy, L. and Plant, E. (2018). An investigation of the benefits and barriers of e-business adoption activities in Yemeni SMEs. Strategic Change, 27(3), pp.195-208.

Evans, C. (2001). An E-Strategy for Online E-Business. Information Systems Management, 18(4), pp.8-21.

G. Kannabiran, P. Dharma lingam. (2012). Enablers and inhibitors of advanced information technologies adoption by SMEs. Journal of Enterprise Information Management 25:2, 186-209

Hackbarth, G. and Kettinger, W. (2000). Building an e-Business Strategy. Information Systems Management, 17(3), pp.78-93.

McGinty, R. (2011). Measuring Business Performance: Emerging Perspectives of the Balanced Scorecard. Journal of Business & Economics Research (JBER), 2(5).

Nnadi, C. (2014). Entrepreneurship Development and its Impact on Small Scale Business Enterprises in Developing Countries: A Nigerian Experience. Journal of Entrepreneurship & Organization Management, 03(02).

Nguyen, T., Sheriff, J. and Newby, M. (2007). Strategies for successful CRM implementation. Information Management & Computer Security, 15(2), pp.102-115.

Raymond, L. and Bergeron, F. (2008). Enabling the business strategy of SMEs through e‐business capabilities. Industrial Management & Data Systems, 108(5), pp.577-595.

Van Hoof, F. and Steg wee, R. (2001). E‐business strategy: how to benefit from a hype. Logistics Information Management, 14(1/2), pp.44-54.

Wachira, K. (2014). Adoption of E-Business by Small and Medium Enterprises in Kenya: Barriers and Facilitators. International Journal of Academic Research in Business and Social Sciences, 4(11).

 

Social networking phenomenon in e-business

Abstract
Nowadays the social networking with its gradual growth has affected the image that we have about the web dramatically. In the following paper some issues about social networking are discussed. In particular, a critical exploration of the social networking phenomenon is presented and an evaluation of the impact on e-commerce and e-business is discussed. Furthermore some possible applications that concern opportunities, benefits and risks are given. A synthesis of the above provides a summary of conclusions that can be drawn and recommendations that can be made as well.

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Introduction
Everyday practice shows that Social Networks popularity is increased day by day. If facebook were country it would be the world’s 4th largest after China, India and USA having over 250.000 users. Many companies have realized this phenomenon and have already started to reform their marketing policy in order to benefit from the Social Networking growth. Many professionals from music artists to business enterprises advertise themselves in social networking web sites via uploading some of their new songs, images or videos.
It is obvious that Social networking has a direct impact in e-business. In order to provide an evaluation of the social networking impact on e-business, we are starting our attempt from word-of-mouth marketplaces or overstock auctions or reputation systems. Reputation Systems like Amazon or e-bay is an online marketplace that augments traditional auctions with a social networking component (Christo Wilson 2008).
Furthermore some social networks applications have several critical factors that we should consider (benefits, risks, opportunities). Our research demonstrates that the gradual growth of social networking has several benefits and several risks. In particular recent surveys have shown high levels of fraud in online markets (Bhattacharjee, Goe 2005).
Some of the most important malicious aspect of social networking is ballot stuffing, bad mouthing and data theft which will be described in detail in the third sector of this paper. On the other side as it was previously mentioned social networking has several benefits. Customers have lost trust in traditional sales, marketing and service or Customer Relationship Management and this plays a pivotal role in increasing of positive impact of social networking in e-business. Many people have changed their buying culture and have orientated in online reputation systems such as e-bay and Amazon that have direct relation with social networking aspects. In a few words this paper provides an overview of the social networking phenomenon evaluates its direct impact in e-business and e-commerce and presents some opportunities benefits and risks that are included.
Social networking as phenomenon
Social Networking is a phenomenon that has affected the whole Web and many aspects of our lives dramatically. Social networking web sites such as Facebook, MySpace, Hi5, Friendster etc. provide the ability to their member/users to create their personal profiles where they can share some information, brief CVs or personal photos. Thus they have the ability to search for their old acquaintances or familiars. Furthermore they can upload or trade with other users photos, comments or videos. In fig.1 a profile sample is provided.
Human beings used to create groups that consisted of people with whom they shared common interests. It was therefore expected that these networks will quickly transported to the online world. Social networks are created for many reasons and for different publics. Despite their differences the social networks are concerned with the following concepts:
Profiles – Each member creates and maintains an online profile that contains information regarding individual interests, skills or any part of his personal status. For example some people provide their CV in order to find a (new/better) job
Connections -Social networks enable their members to keep connections with each other chat trade images, comments and in general keep in touch via the Web (Boyd, Ellison 2007).
Even though the gradual growth of social networking is something recent it is not something new as a concept. Forums, chat rooms, blogs and creations of personal web sites (even though are not something new) are also functions regarding by social networking aspects. Several sites that contained the social networking element appeared in the start of new millennium.
The gradual social networking expansion is a part of a wider online phenomenon named Web 2.0. Web 2.0 is a dynamic “wide web” platform in which several users are enabled to interact with each other without having specialized knowledge in computer systems or network issues.
Evaluation of Social Networking impact on e-commerce and e-business
The social networking phenomenon has undoubtedly a direct impact on e-business. Several benefits and risks could affect (negatively or positively) e-business.
Some benefits could derive from contacts between professionals, ranging from finding the right expertise to identifying cross-organization sales opportunities. What’s more many professionals are eager to create an internal reputation, and to explore career prospects. Personal contacts between the workers could help job satisfaction and the maintenance and development of the local community could help in rapidly professional’s resolution. Sharing of information and communication, a priority and challenge for many companies, could improve (Blackwell 2009).
One more Social Networking aspect that should be considered in order to provide a deeper evaluation of the Social Networking impact in e-business is the one introduced Overstock in Auctions.
Overstock Auctions is an e-commerce website that combines traditional auctions with a social networking component. However, samplings of user feedback shows that transactions between partners connected on the social network result in significantly higher user satisfaction. Official research also shows that Overstock’s business ratings have big degree of accuracy, in that they have a strong correlation with user satisfaction after their transaction. According with official research it has investigated that a big percentage users of Overstock Auctions have friends common to both their business as well as personal networks. That means that we have the trust element that plays a pivotal role in marketing. Unfortunately, traditional marketing users are often unable to locate their desired merchandise in their social network. Edelman Trust Barometer mentioned that the most reliable information source about an enterprise is ‘a person like me'”. The survey relates that in the U.S., trust in “a person like me” increased from 20% in 2003 to 68% today. That’s why they prefer to buy any suggested product from a friend over a perfect stranger. Academic researchers have observed that 6% of users have 100% of their personal contacts involved in the business networks, which demonstrate that users have either only dealing with their social acquaintances, business partners or guests to participate in the personal network their friends (Wilson, Boe 2008).
The next topic that we will discuss concern Word-of-mouth marketing. The companies that have only traditional marketing methods and not Social Network element are in crisis with low productivity and benefits as a result of TV and Radio advertisement saturation. On the other side companies like Amazon, Google and Hotmail succeed with virtually no marketing based solely on word of mouth. Word-of- mouth is the best predictor of business growth because it contains the “trust” element that plays pivotal role in e-business (Pedro Domingos 2005).
Possible applications, opportunities, benefits and risks
The following section provides some possible applications focusing on opportunities benefits and risks.
Opportunities
There are several opportunities of using social network applications such as sharing information and media with peers, finding an audience for creative works, helping young people keep in contact with peers or allowing young people to develop new contacts and friendships with each other.
In businesses the importance of internal social software use is increased daily. Given that the next generation of employees will use the social software as the main medium of communication, the companies must bridge generation gaps and boundaries via the supporting of this communication method with its use in workplaces. Despite the difficulties the benefits are still huge.
At first a high user percentage is directors or company representatives indicating that Social Networking Software has a wide range of potential customers or active users. Secondly by bringing this social software tool in the company, the relevant elements regarding the contacts, interests and activities of the workers are available and archive-able from the company by providing new resources and new abilities for human resources comprehension. In case these tools are not provided by the company the employees have the right to seek social software tools such as facebook etc.
Benefits
There are undoubtedly several possible business benefits of the gradual growth of social networking applications.
At first within social network sites the employees are able to keep in touch with their colleagues. Unfortunately the percentage of distant colleagues and in general distant working relationships is increasing day by day. So it is obvious that we draw attention to the necessity of awareness increasing and contact between distant partners via the social network tools. Within several companies keeping touch and maintaining relationship in an organization is a critical factor for an successful career. Thus the social network tools help the companies to maintain or improve their productivity independently from their employee’s distance.
Another beneficial social network application is the user support regarding the exploring and learning about the new employees and the team members. This endeavor makes the searching of colleagues with special skills or discovering of past experiences in activities that could be useful for new projects easier. Organization-based social networks could also help the professionals to approach work (or non work) issues of common interest something that improves the communication between people who interact for the first time (Joan Morris DiMicco 2007).
Risks
Social networking has several risks except from benefits such as bullying, abuse and exploitation of young people, too much time (distraction) spend on the computer / internet addiction, ballot stuffing or bad mouthing
Ballot Stuffing
A seller manages to make fake transactions via the positive ratings after collusion with other buyers. So Ballot Stuffing has as a result the inflating a seller’s reputation.( Bhattacharjee, Goel, 2005)
Bad Mouthing
On the other hand a group of buyers may be conspiring (it could be after a collusion with a rival vendor) to deliberately give negative feedback to a particular vendor and hence less reputation. This is known as bad mouthing. ( Bhattacharjee, Goel, 2005)
Malicious goals
Some people tend to create fake profiles to bully, lie cheat and steal. Even though there are several benefits in communication via social network applications such as keeping touch and relationship management there is also always the potential to receive negative, insulting or unsuitable comments.
In several interviews several social networking users mentioned that the rude culture of some users was a common disadvantage. There was only a small percentage that disagreed with the term disadvantage. Unlike in the real world according to the new user’s opinion the social network sites have not social limitations or boundaries. This means that users could behave in whatever way they want without limitations via posting rude or abusive messages. However in worst cases the rude culture of some users transact into malicious culture indicating that many users use fake profiles in order to insidiously steal data or money. I.e. A user might give his credit card password in order to buy something from an “advantageous market”. Thus a malicious user having the credit card password is enabled to steal money. (Davies, Cranston 2008).
Distraction
In an organization a social networking software installation should undoubtedly offer several benefits and tremendous power to factors regarding the productivity and profits. However Surveys have found that social networking may be a distraction to workers. In particular it was found that 8% of the work time (30 minutes in 8-hour work-time) concern with social non-working activities. I.e. even though sending of personal photos among employees could provide some indirect benefit to a company, it could also be a distracter for the employees with bad impacts to productivity and profits.
Synthesis
As it was mentioned Social Networking as concept is not something new. It is exist from the internet creation since 20 years. In fact Social networking is part of a wider Internet phenomenon named Web 2.0 indicating the recent Social Network event is its gradual growth due to Web 2.0 creation.
Although companies are aware of the marketing and PR opportunities, using social networking software in a given company or organization is still in relatively early stage .Our main concern in this research paper is the emphasis on the need for transaction costs for a word-of-mouth system to work well and in order to avoid phenomenon such as ballot stuffing or bad mouthing . Not only is the transaction costs important for an word of mouth system to function well, the reputation of earned premiums to the seller should be associated with the transaction costs
It should also be reported that not only enterprises but all of us have to protect ourselves from malicious users via permanent information.
Conclusion
Our study provided an overview regarding the Social Networking Phenomenon. It has also provided an evaluation of the impact of social Networking on e-business. In the stage of our evaluation we discuss about overstock Auctions. Overstock Auctions is a kind of an e-commerce website that makes a strong combination between traditional auctions and the social networking component. We have also discussed about reputation systems. The research has shown that Social Networking has both benefits and risks. Some of the risks that could be lurking are the excessive use of social network applications in workplaces, i.e the use of facebook in workplace from an employee for non business reasons. Other risks that are involved are ballot staffing and bad mouthing in reputation systems. Ballot stuffing is the creation of fake fame after collusion between the reputation System company and fake buyers. Unlike bad mouthing is the defamation of the reputation system company via fake unhappy customers .Some benefits that could be shown are the improvement of customer support in a company. A complicated problem for a company could be solved by finding an expert or locate implicit knowledge via a social network application. In particular a questioner could contact via a Social Network Site with an expert who has solved a similar problem in the past and find a solution to their problem. This paper also provides the “trust” component that plays pivotal role in e-commerce. Customers have lost their trust to the traditional marketing methods. The social networks enables the customer to interact with a person “like him” in order to get the appropriate information for any product. Thus even though the majority of users perform few transactions with their “virtual” friends on social network, many sampling feedbacks showed that transactions between companies representatives and customers have increased the user satisfaction degree.
Also a conclusion has been drawn that Overstock’s business ratings are accurate, in that they have a strong correlation with user satisfaction after their transaction. Thus a valid conclusion would be that there exists a necessity of transaction costs for a well functioning reputation system
References

Bhattacharjee, R. & Goel, A., 2005. Avoiding ballot stuffing in ebay-like reputation systems. In Proceedings of the 2005 ACM SIGCOMM workshop on Economics of peer-to-peer systems. p. 137.
Blackwell, J. et al., 2009. Design and adoption of social collaboration software within businesses. In Proceedings of the 27th international conference extended abstracts on Human factors in computing systems. pp. 2759-2762.
Boyd, d. m., & Ellison, N. B. (2007). Social network sites: Definition, history, and scholarship. Journal of Computer-Mediated Communication,
DiMicco, J. et al., 2008. Motivations for social networking at work. In Proceedings of the ACM 2008 conference on Computer supported cooperative work. pp. 711-720.
DiMicco, J.M. & Millen, D.R., 2007. Identity management: Multiple presentations of self in Facebook. In Proceedings of the 2007 international ACM conference on Supporting group work. pp. 383-386.
Domingos, P., 2005. Mining social networks for viral marketing. IEEE Intelligent Systems, 20(1), 80-82.
Goad, R and Mooney, T, ‘The impact of Social Networking in the UK’ (Hitwise Experian, 2007),
Swamynathan, G. et al., 2008. Do social networks improve e-commerce?: a study on social marketplaces. In Proceedings of the first workshop on Online social networks. pp. 1-6.
Withers, K, ‘Young People and Social Networking Sites: Briefing to guide policy responses’ Institute of Public Policy Research (IPPR, 2007).
 

E-business strategy

1. Management Summary
2. Introduction
Tesco is Britain’s largest food retailer, employing over 240,000 people worldwide and has net yearly profits of over £1 billion. Its website is one of the most popular in the UK, with over one million registered users. [free-encyclopedia-online]
Tesco started in 1919 when Jack Cohen started selling surplus groceries from a stall in the East End of London. The Tesco brand first appeared five years later in 1924 he bought a shipment of tea from a Mr T. E Stockwell. The initials and letters were combined to form Tes-co and in 1929 Mr Cohen opened the flagship Tesco store in Burnt Oak, North London.

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The brand sustained its rise in the 1930s when Mr Cohen established a headquarters and warehouse in North London and in 1932 Tesco became a private limited company. In the 1950s the retailer bought 70 Williams stores and 200 Harrow stores, followed by 97 Charles Philips stores and the Victor Value chain in the early 1960s.
In 1968 Tesco opened its first ‘superstore’ in Crawley, West Sussex.
Supermarkets revolutionised the way people shopped and by the 1970s Tesco was building a national store network to cover the whole of the UK, which it continues to expand to this day, while also diversifying into other products. In 1974 Tesco opened its first petrol stations, and would become the UK’s largest independent petrol retailer. By 1979 total sales topped £1bn, and by 1982 sales had doubled to more than £2bn. In 1987 Tesco effectively completed a hostile takeover of supermarket opponent Hillards for £220m. In the 1990s Tesco continued to tighten its grip on the UK with more store openings and an aggressive marketing campaign in an attempt to surpass Sainsbury’s as the UK’s leading grocer. In 1992, the company launched is slogan ‘every little helps’, followed by the Tesco Value range in 1993. This was followed by the launch of the Tesco Clubcard scheme in 1995, helping Tesco to overtake rival Sainsbury’s as the UK’s largest food retailer. 1996 saw the retailer introduce its first 24-hour store while it also expanded overseas opening shops in Poland, the Czech Republic, and Slovakia. Tesco.com was launched in 2000 and the supermarket continued to expand its range of products, which now includes clothes, electrical and personal finance products. In 2004 Tesco entered the broadband market. In 2006, the retailer announced ambitious plans to open stores in the US under the name ‘Fresh and Easy’ and funded by existing resources. Tesco now operates in 13 countries. Group sales were £51.8bn in the year to February 23 2008. In 2008 the retail giant took its conquest of the UK one step further by buying up some competitor Somerfield stores on distant islands in Scotland, giving Tesco a existence in every single postcode area in the country.
More than 50p in every pound spent on food by the city’s 66,000 residents is done so at a Tesco checkout and similar dominance in other towns has sparked controversy.
Because of their size, supermarkets have been accused by some of abusing their position by forcing smaller local shops out of business. Clark, T, (2008)
Below figure 2.1 shows a graph of Tesco’s profit over a five year period from 2003 to 2008.
Figure 2.2Graph showing the improvement of Tesco’s product range
Grocery home shopping service, toys
electronics, sports equipment, cookware
home finishing
Financial services
(Visa card, saving accounts, banks, insurance)
Gas filling station
Gasoline retailer
Clothing, household
Food
1919 1960 1990 199  1997 2000
Year
3. Situation Analysis
In crafting a strategy it is important for a company to analyse the environment.
All organisations operate within an environment that influences the way in which business is conducted. Situation analysis involves the review of the internal resources and processes of the company to assess its e-business capabilities and results to date in the context of a review of its activity in the market place. It also involves the review of the immediate competitive environment or micro-environment and the review of the wider environment or macro-environment in which a company operates. The micro-environment includes customer demand and behaviour, competitor activity, marketplace structure and relationships with suppliers, partners and intermediaries. The macro-environment includes economic development and regulation by governments in the form of law and taxes together with social and ethical constraints such as the demand for privacy. Chaffey (2009)
3.1. Present Position Analysis
In this section the factors that impact Tesco’s strengths, weaknesses, opportunities, and threats will be looked at. Figure 3.1 presents the factors that impact the SWOT analysis of Tesco.

Strengths
Advertising and marketing
Strong customer base
Product range
Services offered
International entrance
Location
Sale increase
Brand name
External economies of scale
Product quality
Cost reduction

Weaknesses
Transport cost
Dependence on the UK grocery market
Market dominated by another company

Opportunities
Online market
Growth
Product expansion

Threats
Tax increase
Innovation of other companies
Customer preference
Internet security

Tesco’s success in the market stands firm due to their product range which allows customers to choose products from different market segments. With this strategy Tesco establishment a strong customer base. They also kept and grew their customer base by introducing new services within the organisation and by way of their advertising both in store and online. They introduced a clubcard that encouraged and continues to encourage customers to shop online with rewards. To keep their customer base strong they use different advertising and marketing methods such as sending customers mails using effective mediums which include both direct mail and electronic mail. Advertising is can be done in store and is even more effective using the online medium such as advertising on Google or sites that are used regularly by general web browsers. Services such as insurance, visa cards, saving accounts, music downloads and gas filling stations where some of the services introduced by Tesco. The products and services offered by Tesco meets or at times exceed the expectations of customers. The brand name Tesco uses allows customers to identify them and the products and services they provide even though other companies provide similar products and services. Tesco’s strategy of branching out into different locations was a major move which allowed them to target all groups of customer wants and needs with the products and services they offered. They also branch out into international markets and expand their products and services into different cultures. Tesco’s move to the online arena allowed them to target all groups all at once and allow their customers to purchase items that are in or out of season and are not available in store. They also grant them five dollar discounts to encourage them to shop on the online market. Tesco’s have an advantage over their competitors and due to this fact the prices they offer for the same products are much lower allowing more customers to come into Tesco instead of the competitors.
Dependence on the UK market is considered a weakness because of their dependence on UK suppliers for their products. Tesco can turn their dependence on the UK market into strength by outsourcing products with equal or superior quality than the products they currently offer.
Tesco dominates the market but in certain cities, Tesco’s competitors have monopolised the cities. In order for this monopoly by their competitors to be destroyed Tesco needs to open more branches within the cities and boost up their services to gain a wide range of customers in those cities.
3.2. Industry Analysis
Porter’s Five Forces for Tesco.com
4. E-Business Strategy
Strategy development should be strongly influenced by considering the environment the business operates in. The most significant influences are those of the immediate marketplace of the micro-environment that is shaped by the needs of customers and how services provided to them through competitors and intermediaries and via upstream suppliers. Technological innovations are vital in providing opportunities to provide superior services to competitors or through changing the shape of the marketplace. Chaffey (2009)
4.1.E-Business strategy
4.2. Implementation
5. Legal and ethical issues
Privacy of consumers is a key ethical issue since many laws have been enacted. Data protection legislation is enacted to protect the individual, to protect their privacy and to prevent misuse of their personal data. This affects all types of organizations regardless of whether they have a transactional e-commerce service. Chaffey (2009)
When gathering information Tesco.com needs to take in mind what the Data Protection Act states concerning personal data and the use of that data.
In schedule 1 of the Data Protection Act 1998, it states eight principles by which data must be protected. These eight principles are:

Personal data shall be processed fairly and lawfully and, in particular, shall not be processed unless—

at least one of the conditions in Schedule 2 is met, and
in the case of sensitive personal data, at least one of the conditions in Schedule 3 is also met.

Personal data shall be obtained only for one or more specified and lawful purposes, and shall not be further processed in any manner incompatible with that purpose or those purposes.
Personal data shall be adequate, relevant and not excessive in relation to the purpose or purposes for which they are processed.
Personal data shall be accurate and, where necessary, kept up to date.
Personal data processed for any purpose or purposes shall not be kept for longer than is necessary for that purpose or those purposes.
Personal data shall be processed in accordance with the rights of data subjects under this Act.
Appropriate technical and organisational measures shall be taken against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data.
Personal data shall not be transferred to a country or territory outside the European Economic Area unless that country or territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data. [opsi 2008]

According to the principles of the Data Protection Act 1998 above Tesco must ensure that:

When Tesco.com collects information from a data subject, the data subject must be aware that their information is being captured and because they agree to it. This information is obtained when a customer registers an account with Tesco.com. This information will be used by Tesco.com to create a profile for the individual.
Tesco.com must let the data subject know why they are collecting this information and how it will be used both now and in the future. They need to let the data subject know if they data will be sent to third parties or not and how long they will keep this information stored.
The data requested by Tesco.com must be relevant according to their needs. It must also be information that a customer will feel comfortable disclosing.
Tesco.com must ensure that the data being collected and processed from a data subject is accurate and up-to-date.
When a customer requests the closure of their account Tesco.com should delete all data concerning that customer or they will be in violation of the fifth principle in the Data Protection Act 1998.
Tesco.com should supply information to the data subject without hesitation once they request it.
In gathering information Tesco.com must ensure that the data stored is safe and secure.
In distributing data Tesco.com must ensure that the data subject agrees to it or the country to which the information is being transferred to must have proper data protection or else there will be a breach of the Data Protection Act 1998 principle 8.

According to the Privacy and Electronic Communications Regulations Act, Tesco.com must see to it that the e-mail sent to customers where based on the customers opt-in or consent to receive e-mails and should also have the option for them to opt-out or un-subscribe to getting e-mails. Tesco.com should also supply the customer with some contact information so that they can contact if they feel the e-mails being sent is spam.
6. Conclusion
 

Segmentation: E-business market

1.0 Introduction
This report will cover some outlines of segmentation and how to target the potential market for our new E-business in the market it is important that we understand what kind of requirements there are for effective segmentation. I would try to compare and contrast some of the important points give some examples. Also to keep our position safe in market and to keep running a successful business first we need to consider different segmentation processes and then I would define the business model according to our E-Business.
1.2 Identify the target markets for Complete Training Solutions’ intended expansion. The school will need to consider the demographic, geographical, psychographic, and consumer characteristics of there identified markets. For that school need to understand the market segments which are as follows.
2.0 What are the market segments are?
Market segmentation may be defined as Jobber says that “the identification of individuals or organistaions with similar characteristics that have significant implications for the determination of marketing strategy”.
“Where segmentation is the first and one of the most important steps” (Yan, 2008).
Where as according to Lancaster & Reynolds market segmentation is defined as “the process of breaking down the total market for a product or service into distinct sub-groups or segments where each segment may conceivably represent a separate target market to be reached with a distinctive marketing mix.
2.1 Market segmentation
A segment is a unique group of customers or potential customer who share some kind of common characteristic that make them different from other groups. Proctor thinks that different segments may have different needs, they may ask for different versions of the same product, pay different prices, buy in different places and they may be reached by different media. Every one has the own opinion and own choices. It is very important for us to keep a healthy relationship with the customers and to do this they need to understand their customers’ demand.

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According to Proctor in consumer markets customers and prospective customers can be grouped together or segmented by attitude, lifestyle, age, gender, stage in the family, lifecycle, job types, level of earnings and many others relevant variables. These things should be kept in mind whenever introducing any new brand because if we want to maintain our image in the market then we need to fully understands the logic of customers and their purchasing behaviours.
It is very important for us to identify what each segment wants, what it can afford, whether it is loyal to a particular competitor and how it might respond to an offer is vital information. As mentioned by Proctor that market segmentation and accurate targeting keeps a firm close to the market. It reduces waste, finds the best customers and helps to keep them satisfied.
Segmentation is very useful tool. But it is necessary for us to understand each and every sub-group in order to get the positive result from customers and to compete with competitors in the market.
As mentioned by Croft the methods of separating the market according to similarities that exist among the various subgroups within the market. Characteristics, needs and desires may be the common similarities. Market segmentation comes about as a result of the observation that all potential users of a product are not alike, and that the same general appeal will not interest all prospects. Therefore, it is essential to develop different marketing tactics to effectively cover the entire market for a particular product. There are four basic market segmentation strategies: behaviour segmentation, demographic, geographic, and physiographic segmentation.
2.2 Demographic segmentation
Involves dividing the market on the basis of statistical differences in personal characteristics, such as age, gender, race, income, life stage, occupation, and education level (Anon 2002)
We could focus on customers’ age because user needs and wants change with their age although they still want to learn the same types of courses. In order to introduce the new ideas in market and we should look at the design of the courses and what will be the learning outcomes we could meet the user demands of different age group.
Income is another popular basis of segmentation. Customers will be more attractive towards the less income. We need to understand this point that in marketing the courses that appeal directly to the customer is relatively low prices.
So therefore other variables of demographic are as important as mentioned above and they should not be neglected.
2.3 Psychographic segmentation
It is based on the assumption that the types of products and brands an individual purchases will reflect that person’ personality and patterns of living.
Generally to promote the product marketers are using celebrities, such as football team. If we use this technique for her new courses then we could create a big image in front of users. As it mentioned in the definition that every one has different life style, they have there own opinions but it could be influenced by other people personalities. This is benefit for us because for example if David Becham is learning the team building strategies from our institute then the user influencing his fans to join in the same course.
2.4 Geographic segmentation
Lancaster & Reynolds said that geographic is consists of dividing a country into regions that normally represent an individual sales person’s territory. This is mostly suitable for broad companies and these massive regions are then broken down into areas with separate regional manager controlling salespeople in distinct area.
This will help only if we expand our company our institute international, so far there is need of geographic segmentation. The geographic segmentation method is useful where there are geographic locations differences in consumption patterns and preferences but in our case we need to think about that because our institute is more about online courses so we have to consider about that.
2.5 Behavioural segmentation
As stated by Lancaster and Reynolds behavioural segmentation is based on actual customers” behaviour’ towards products. It has the advantages of using variables that are closely related to the product itself. Such as: brand loyalty, benefits sought, occasions (holidays, events which stimulate point for marketing) etc.
As Lancaster & Reynolds stated that the customers that can be divided into number of groups according to their loyalty, or their propensity to repurchase brand again is called brand loyality.
Actually we have to think about if we will provide the those learning facilities are those are enough for the learner requirement with that they can bring some more students for the reappearing in the same courses or tell others to participate in those courses those are good and according to the your standards this is some sort of the advertisement when any costumer tell other customer for the same product just we need to think about if, if the user doesn’t like our learning style then what will be our next plan to satisfied the learner.
3.0 Effective segmentation
The needs of customers should be central to all business decision making so therefore
Effective segmentation can be achieved by solving the problems of users. The major dimensions are price, service, product and quality for example an image of institute. Therefore it is necessary to identify all the requirements of user so realistic segments could be targeted. Kotler said that, “A customer orientation toward marketing holds that success will come to organizations that best determine the perceptions, needs, and wants of target markets and satisfy them through the design, communication, pricing, and delivery of appropriate and competitive viable offerings”.
According to Xu, Jianfeng “An accurate and effective segmentation technique is the basis of the ideal dynamic heart modeling”.
One author state that effective segmentation is about customer needs, demands and other is telling the importance of effective segmentation. Each segment should be evaluated in terms of its overall size, projected rate of growth, actual and potential competition and customer needs. According to the targets we need to decide which criteria is appropriate for assessing different bases.
3.1 Measurable
According to Recklies it has to be possible to determine the values of the variables used for segmentation with justifiable efforts. This is important especially for demographic and geographic variables. For an organisation with direct sales the own customer database could deliver valuable information on buying behaviour (frequency, volume, product groups, mode of payment etc.
3.2 Accessibility
Lancaster & Reynolds researched that accessibility base used should ideally lead to the company being able to reach selected market targets with their individual marketing efforts.
3.3 Validity
Reynolds and Lancaster mentioned the extent to which the base is directly associated with the differences in needs and wants between the different segments. Given that segmentation is essentially concerned with identifying groups with different needs and wants, it is vital that the segmentation base is meaningful and that different preferences or needs show clear variations in market behaviour and response to individually designed marketing mixes.
3.4 Substantial
According to Lancaster & Reynolds substantial is the base used which lead to segments which are sufficiently enormous to economically and practically worthwhile serving as discrete market targets with a distinctive marketing mix.
If we need to make segmentation effective it is important that we know that where and who we targeting. Segmentation is the basis for developing targeted and effective marketing plans.
4.0 Targeting
Lancaster & Reynolds mentioned that after market has been separated into its segments, the marketer will select a segment or series of segments and ‘target’ them. Each segment has different tastes and demands unique marketing mix in order to make the product or service more attractive to those customers who occupy that market segment. The process of manipulating the marketing mix in terms of differentiating products, methods of communication and other marketing variables is known as ‘target marketing’.
After the process of segmentation the next step is for us to decide how it is going to target these particular group(s). There are three options
Undifferentiated marketing
Differentiated marketing strategy
Concentrated Marketing
We should use differentiated marketing because we can use several segments and develop distinct courses with separate mix strategies at the varying groups.
Mr Jobber stated that “When market segmentation reveals several potential targets, specific marketing mixes can be developed o appeal to all or some of the segments”.
As Siklos and Abel says that “The…giving inflation targeting an additional credibility…boost many emerging markets”.
Comparing these two definitions of different authors its becoming noticeable that targets play an important roll to achieve goals. It would allow us to identify specific customers groups with different needs and wants and also the unfilled gaps in a market can be apprised and then satisfied through unique product or promotional offering (Lancaster & Reynolds 1999).
Target marketing can thus be said to be the process of identifying market segments that will be the most likely purchasers of a company’s products, and devising inventive marketing approaches to suit these specifically distinguished needs (Lancaster & Reynolds 1999).
After segmentation process has taken place as Lancaster and Reynolds mentioned that each segment should be identified and must be assessed in order to decide whether or not it is worthwhile serving as a potentially profitable target market with its own distinctive marketing mix. Where there is good sales and profit potential the favourable attributes of a target will include segments. If competition is not too intense and where the segment might have some previously identified requirements we should able to serve them.
5.0 Mix marketing
As mentioned by Lancaster and Reynolds that the marketing mix describe the functional aspects of marketing over which the company has control. This includes what E Jerome McCarthy dubbed the ‘four Ps’ in 1960, namely, Product, Price, Promotion and Place. In addition to these four Ps, is sometimes added a fifth P – People, which includes the people who mainly carry out the function of marketing and who interface with customers. These have been described as the key elements of the marketing function. There are two further Ps that specially relate to the service industry because of its tangible nature. These are Process and Physical evidence. These are called the seven Ps of service marketing. However we should understand the notions of four Ps which are still prevails in marketing litre.
The elements of marketing mix are all related in terms of how they combine in the marketing planning process. Lancaster & Reynolds pointed out that it is the skill of marketing management to ensure that the combination chosen is a successful one.
“Marketing is seen as a strategic management activity aimed at developing customer relationships. Concepts such as the ‘four Ps’ (product, price, place and promotion), marketing plans, the marketing mix, segmentation, promotion and evaluation are identified and discussed in relation” (Wakeham, Maurice 2004).
According to these authors we can see that with marketing mix we could raise the strong relationship with users and with the concept of 4 P’s we can identified and evaluate the segmentation. Let’s expand on these 4 Ps’ and see how we can link them with our new online learning facilities of Team Building, Assertiveness, Coaching Skills and Delegation Skills for the Busy Professional.
Mission statement draft:
A learning experience that prepare students to contribute in a dynamic, global, and diverse business environment. Our mission is to provide training to all level of the users who ever is connected with their business, Including team building, assertiveness, coaching skill and delegation skill for the busy professionals.
Objectives
Aim
Our school of intelligent learners is for the users who wants to build up there extra qualities for to compete the new era requirements. And our aim is to provide them up to date training which is purely concerned for the business levels. Our school is one of the best schools in Bradford. Currently we are struggling for more students that is why we are moving online and we will provide online courses for the relevant business. That was the our main reason to be online but there is one more reason to be online is that before we were enable to mark the global market now we can mark the global market by choosing online learning facilities now we can provide our service across the glob where ever any one and any type of user can access us and learn what ever they want from our main courses. We will provide online video and audio conferencing which is the solution to save the cost of the booking hotels and halls. Our main concern is to think about the user from different back ground from any part of the world we can arrange there course in any language. Our basic and main aim is to provide them solution for their problems.
Value proposition:
For the learner’s satisfaction school has to think about the language, course compatibility, learning facilities for the disable people which we don’t have at the moment so we have to concerned about those problems and we have to satisfy the learner needs by that as a distance training provider we will have to save their time and they can chose there own learning style and they can manage their staff as possible as they want they can call more people if they want they can organize big halls for more people and they can provide the requirements for the disable peoples as well by using the our video and audio libraries.
Product and services:
The school will provide Team Building, Assertiveness, Coaching Skills and Delegation Skills for the Busy Professional. That will be a complete training for the binger’s as well as for the expert. Expert can learn new techniques and binger can develop some skill too for the requirements of the new era. School will also provide some extra courses as well whoever will join the school for instance, web development in visual basic oracle it is good for the companies for there advertisement and for account as well. Learning on internet is the best learning style then old time styles you can learn while sitting at home at your own pace. The school will provide you the services of all the documentation and applications with which the students and companies can enable to access the schools resources.
Business models:
There could have been taken several attempts to categorize all the business models emerging with the coming new economy in order to understand how e-companies are making money or not making money. Some of are the company see there business model highly exposed such as the reverse action model of Priceline or online grocery model of shield. But still, is at all so clear so far? For instance, ebay.com might be typical of an Agora B-web like in Chicago but all the same as ebay.com and the main function is to be a online merchandiser. All of them have the same object but the different perspectives. Is there any better or could be worse way to explain or justify the business models? Are those comparing with each other or allowing comparisons? Do they help customer to categories the different actors in the same category, for instance online grocery shop? Do they explain why some of them benefits from the financial figures? Nowadays new business models do not finish emerging in electronic commerce and can become a major stake in the e-business game ((Maitre and Aladjidi (1999), Kalakota (1999)). It is even possible to patent them in some countries (Pavento (1999)! Research issue is important to understand the new business for to helping to design but not covered so well until now.
E-business modelling has similar as to enterprise modelling in general. Modelling helps the companies to develop their business visions and strategies, redesign and align business to operations, share knowledge about the business and its vision and ensure the acceptance of business decisions through committing stakeholders to the decisions made (Persson, Stirna , 2001). A business model is nothing else than the architecture of a firm and its network of partners for creating, marketing and delivering value and relationship capital to one or several segments of customers in order to generate profitable and sustainable revenue streams. The E-Business Model framework is therefore divided into four principal components.

The products and services a company offers, representing an ample value to a target customer (value proposition), and for which he is eager to pay.
The relationship assets the firm creates and maintains with the customer, in order to suit him and to generate sustainable revenues.
The communications and the network of partners that is necessary in order to create a good customer relationship. And last, but not least,
The financial aspects that can be found throughout the three previous components, such as cost and revenue structures.

If we think in depth how the school is related to the business models and how it will work to generate the more revenue. Basically the intelligent learner’s is associated with several business models. The main models include business-to-business (B2B) and business-to-consumer (B2C). B2B consists of companies and school doing a business with each other, whereas B2C involves selling directly to the end consumer (students). When intelligent learners first began, the B2C model was first to emerge. B2B transactions were more complex and came now.
Conclusion:
some of the benefits associated with online intelligent learners are include the availability of information 24/7. Students and companies can log onto the Internet and learn about products, as well as purchase them, at any hour. Intelligent learners can also save money because of a reduced need for a sales force. Overall, intelligent learners can help you to expand from a local market to both national and international marketplaces. And, in a way, it levels the playing field for big and small players. Unlike traditional marketing media (like print, radio and TV), entry into the realm of Internet marketing can be a lot less expensive and offers a greater sense of accountability for advertisers.
 

Impact of E-business on the Economy

The Impact of E-business on the Economy
Introduction
Electronic business also known as E-business is the conduct of business on the internet and other computer networks, not only does it involve buying and selling of products but also customer servicing and collaboration with business partners. In recent years, e-business has developed rapidly and the e-purchasing is becoming more popular over the world.

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Electronic business (e-business) is a general concept covering any form of business transaction or information exchange executed using information and communication technologies (Whiteley, 2000). E-business may take place between firms (B2B), between firms and their customers (B2C), or between firms and the government (B2G). According to Whiteley (2000), e-business operations can be grouped into three categories; Electronic categories, Electronic Data Interchange (EDI) and Internet business.
E-business has been recognized as an important contributor in the economy of many countries. In the emerging global economy, e-business has increasingly become a very important and a necessary component of business strategy and a strong catalyst for economic development.
This report will be analysising the impact of e-business on the economy (EU) and the importance of e-business, stating the critical issues and challenges involved in e-business.
Impact of E-business on business organisations
To assess the economic impact of e-business in an organisation, I will concentrate on the important sectors in the European union which are the Retail industry, Banking industry and the Travel and tourism industry.
Retail sector
Retailing is one of the most important industry sector in the world, with no exception of the EU. In 2004 the EU retail sector, the industry comprised of approximately 17 million firms that employed people in the EU27 (e-business watch 2007)
In the retail sector, e-business has had great impact on the value chain. It has made a great difference in terms of shelf life of products and stock rotation time. It also highlighted the relevance of inter-business exchanges. In fact, retailers, beside their relationship with suppliers and consumers, have significant impact on intercompany exchanges through CEDI (centre of distribution). In essence, retail companies will want to rationalize and reduce costs of supply and management of the supply chain, starting with purchasing cost. They will also want to differentiate their own offers from the competitors, exploiting customer relation management techniques as to communication, sales and customers’ loyalty (e-business Watch 2000).
The UK figures released by the Office of National Statistics in February 2009 showed that internet retail sales, as a percentage of total retail sales, rose by 13.2% (average weekly value of £167 million). These figures closely match figures released by the IMRG/Capgemini Sales Index which showed that the e-business retail market rose by 17% in July compared to July 2008, this increase has been driven by the clothing, accessories and electrical goods online retail sales.
Banking Industry
The introduction of E-business (ICT) in the European banking system has had a significant impact on banks operating system and their operations within physical branches. The most important form of e-business used by banks is the online banking which has help cut down cost. E-business has enabled banks to redefine their boundaries and also gained competitive advantage through it. Internet banking is nowadays supported by advanced ICT solutions which enable most everyday banking services to be conducted online (www.ebusiness-watch.org). Studies also shows productivity growth rose in the EU from year 2000 onwards, while average working hours per employee has decreased subsequently, this study tells use e-business investment is largely substituting labour particularly in retail banking.
Travel and tourism Industry
In the last few years travel pattern has changed in the EU. The travel sector in the EU is so large that even a small share of it produces a major online market. Taking the internet for example, it has had a very high impact on the air travel industry. It can provide a direct connection between airlines and customers without the need to use travel agents or Computer Reservation Systems (CRS), thereby leading to cost savings in the distribution of air tickets (Law and Leug, 2000) the internet has become very extensive in the travel industries and its impact has been particularly significant on the distribution channel for air travels and the use of the Internet for searching and purchasing airline tickets has become common in travel markets. The introduction of e-business to the airline industry has enabled most travellers to bypass travel agents alltogether, with most agreeingthat the most current air market will shift form traditional travel agents to internet based agents like www.opodo.com. Recent studies shows that firms that have reinforced their e-business strategy in the airline industry has had an increase in sales volume for airlines’ website. The internet has contributed strongly to the growth of most budget airlines taking easy jet as an example. Easy jet has never used the travel agent network, they rely on the internet because all their flights are booked online by customers. (Journal of Air Transport Management
Volume 12, Issue 5, September 2006, Pages 253-260)
Impact of E-Business on the economy
Over the past decades e-business has helped and provided various methods in which buyers and sellers can transact In the decades to come, exploiting the full potential of developments could have profound impacts in individual sectors of the economy as well as for macroeconomic performance and economic policies. At the aggregate level, productivity and economic growth could rise, at least for some time, as a result of more efficient management of supply and distribution, lower transaction costs, low barriers to entry and improved access to information. In the business-to-business context, higher efficiency can be gained from B2B e-commerce and B2B exchanges via lower procurement cost and better supply chain management. Many companies claim that putting their supply chains online has led, or will lead, to major cost savings. According to Goldman Sachs (2000) study these gains range from between 2 and 40 percent of total input cost depending on the industry which may subsequently reduce the price in the overall economy.