Evaluating E-Commerce Strategy Development within Organisations Essay

BackgroundThe word of honor astir(predicate) the New Economy has triggered some entrepreneurial ventures to exploit on the electronic commerce (e-commerce) opportunities. Ventures such(prenominal) as virago and eBay have received signifi cant media attention and investor optimism about the authorisation of e-commerce. Now that the slew has settled, both management and academic interrogation have become interested on the impact of e-commerce on those companies that have supplemented their brick-and-mortar outlets with e-commerce initiatives.several(prenominal) investigatees have emerged on effect of e-commerce on g e precisewherening bodyal strategy. Tapscott et al (1998) discusses the organisational mixtures puddled by B2B e-commerce and the benefits of deploying e-commerce at bottom the organisation. OConnell (2000) discusses the effect of e-commerce in the organisational structure in light of the resource-based view and act court theory. E-commerce has been seen as up(a) efficiency, communication and weighty bes across affair solvees (OConnell, 2000 Krovi et al., 2003 Garicano and Kaplan, 2001).In addition, searches have also shown the influence of e-commerce on nock management. Wind & Mahajan (2001). discuss how the free-enterprise(a) surround is changing with the increasing bout of net income users and how the new-fashioned technology is redefining the martplace. The investigate presented a constructual framework delineating the drivers and outcomes of securities industry strategy in the context of competing in both physical and electronic marketplace. take up of the consequence of electronic marketplace is the expertness of organisations to offer highly customized products to consumers, and the capability to contour and to manage client dealinghips (Brown, 2000).The aim of the question is to investigate the coun marketing in which an organisation develops its electronic commerce strategy everywhere time in light of vivacious strategic approaches and development found inwardly related literature. The research particularly looks into attach & Spencer e-commerce strategy as the case atomic number 18a for the research. The research looks into how Marks & Spencer has developed and employ its e-commerce strategy.Drawing from strategic management theories, the research specific tot acquaintancey focuses on the how an e-commerce strategy is grounded on reducing consummation cost within the organisation and across the valuate chain. Furtherto a great extent, the research also looks into the importance of relationship merchandise and how e-commerce is providing organisations with the necessary technology to achieve circular-knit exchange of information and reduced costs. Strategically, the toleration of e-commerce within an organisation hinges on these cardinal important strategic management theories.In addition, the research is confined within the origin-to-consumer (B2C) market, since lineage-to-business (B2B) relations atomic number 18 frequently characterized by a small number of guests and a good emphasis on some mavenal contacts mingled with customers and salespeople as their means of marketing communication. Therefore, the research focuses on how consumers view their shopping fancy within an e-commerce site, particularly Marks & Spencer.The Overview of the employment The remainder of this study is as adjacent statement Chapter 2, Literature Review, exit put up a concise concept and news report of electronic commerce within sell organisation. The review of related literature discusses the concept and activity areas of e-commerce within organisation. The review impart also tackle the important strategic management concepts such as transaction cost theory and relationship marketing and how e-commerce is enabling organisations achieve incrrestraintd efficiency, alter communication, and lower costs across its order chain.Chapter 3, Methodology, will absorb the research contrive of this study. The research design of this study is observational research method using tri providedary data for quantitative analysis.Chapter 4, Results, will pose the results of this study. At out harvest-home, the descriptive statistical data such as maximum, minimum and mean, on the consumers perspective on the divergent assistance attributes of e-commerce site for Marks and Spencer.Chapter 5, Summary, remainder and Recommendations, the Summary section will first provide a comprehensive compend of the major findings of this study. The Conclusion section will highlight the implications of the research findings. Finally, Recommendations will be proposed to help companies to utilize the importance of electronic commerce in their strategic assessment. In next chapter, related researches in electronic commerce will be reviewedCHAPTER 2 LITERATURE REVIEWElectronic dutyAccording to the transnational engineer Forum, e-commerce is an uphil l model of new selling and trade tools in which buyers are able to embark in all phases of a obtain decision, while stepping through those processes electronically pick outably than in a physical depot or by phone (with a physical catalog). (online International Engineering Forum) E-commerce enables a customer to access product information, take aim items to procure, grease ones palms items securely and have the purchase settled financially. While the nonion of e-commerce as the ability of organisations or a person to sell over the net income is very popular, the research paper will film the definition of Organisation for Economic Co-Operation and instruction (OECD). E-commerce can be defined as the bestow of all maskings that pertain to online communications and transaction (OECD, 2000). The definition better accommodate our purpose of discussing e-commerce in the context of strategic management. The research views e-commerce holistically, which encompasses the comm unication between organisations and customer over the mesh, the completion of one-time or on-going online legal proceeding, and e-CRM administrations. The emergence of e-commerce in the retail sector is one of the most widely adopted and anticipate development in the perseverance. Following the victor of Amazon, m each brick-and-mortar retailers jumped into the dot com bandwagon and established their online armorial bearing in the World Wide Web. many a(prenominal) have adopted e-commerce capabilities out of a fear of falling behind competitors or as a result of the full general momentum to exposit the use of an alive meshwork presence. Nonetheless, the main apprise hint for organisations adopting an online presence is the prospect of increasing revenue from new markets and using a lower-cost, electronic- distribution shift (online International Engineering Forum). With a ironlike demand from organisations in creating an online presence, internet service suppliers (ISPs) have begun to offer electronic-commerce hosting go. ISPs often authority as a outsourced service provider of the customers electronic-commerce capabilities, managing the networking and server aspects of the initiatives. Such services are important consideration for the roll-out e-commerce sites as it allows organisations to supplement on the expertise of ISPs and allows organisations to concentrate on their core businesses (online International Engineering Forum). From the customers perspective, the main benefit of an e-commerce agreement is the convenience it brings to consumers, who are constrained by busy schedule and numerous activities. The e-commerce agreement enables a customer to locate and purchase a desired good or service over the meshwork when the customer is ready to make the purchase. Its function is synonymic to a virtual investment company (online International Engineering Forum). From the merchants perspective, the e-commerce system enables the organ isation to take measure of the strengths of online lay in and increase revenues. One of the key benefits of implementing an online reposition is the capability to cover greater market reach and a complementary distribution post to its existent brick-and-mortar lay ins. However, in request to effectively implement an e-commerce strategy, the e-commerce system moldiness recreate or utilize existing data and business processes.The merchant moldiness recreate the same shopping capture in its online store providing in-store assistance, secure wages process, catalogs and prices about the products and services, inventory management, and transaction capabilities (including creed authorization, tax computation, financial settlement, and shipping) (online International Engineering Forum). Furthermore, e-commerce not only allows merchants to take advantage of market reach, but it also enables merchants to redefine and enhance an enterprises brand strength, customer-service capability , and sum up-chain efficiency. An e-commerce site is one of the areas of an enterprise foot that is open to customers via the Web, but it is linked with other(a) information system of the enterprise evaluate chain (online International Engineering Forum). In implementing an e-commerce site, provision of the basic system requires an meshwork connection, a Web-application server and e-commerce application software, and a personal computer for the shopper. word form 1 illust range the basic economic drivers and application requirements of an e-commerce marketplace. On the buyers side, consumers are driven to the online retail store through advertisements, interesting features, needed information, and directory. On the sellers side, merchants are driven to the online s one thousand because of its ease of entry, increasing website traffic, ability to sell and incorporate marketing messages (online International Engineering Forum).Figure 1. business line Drivers in e-commerce stra tegyE-Commerce Strategies and task DriversA number of initiatives implemented within an organisation are driven by a market need. All industries are characterized by trends and new developments that gradually or speedily produce changes important enough to require a strategic result from participating firms. The popular hypothesis about industries going through a emotional state round of golf helps explain assiduity changes but is still incomplete (Porter, 1980 p. 157-162). The feel-cycle stages are powerfully keyed to changes in the overall industry proceeds rate (which is why such terms as rapid growth, betimes maturity, saturation, and decline are utilise to describe the stages). Yet there are more causes of industry change than an industrys position in the life cycle (Porter, 1980 p. 157-162).While it is important to judge what growth stage an industry is in, theres more analytical value in identifying the specific factors causing fundamental industry and belligerent adjustments. Industry and competitive conditions change because forces are in motion that create incentives and pressures for change (Porter, 1980 p. 162). The most dominant forces are called driving forces because they have the biggest influence on what kinds of changes will take place in the industrys structure and competitive environment.The Internet and e-commerce opportunities are unquestionably spawning a sweeping business revolution that alter industry boundaries, opens up all kinds of new business-to-business (B2B) and business-to-consumer (B2C) market opportunities and threats, sparks competition from new and exclusively different breed of enterprises and mandates fundamental changes in business practices (Thompson and Strickland 2001). In his book The Business of E-Commerce From Corporate Strategy to Technology, Paul may discusses foursome business drivers for adopting an e-commerce strategy. First, organisations have the obsession to catch up with competitors or to forgather competitive advantage by being early adopters of the new technology. Organisations continual pursuit to gain competitive edge in the marketplace is a primary concern and part of a survival component in the business strategy. Second, organisations need to develop a likely e-commerce channel from its current online portfolio.Third, organisations are everlastingly looking for ways to reduce cost and increase efficiency within its value chain. E-commerce can be a originative force in delivering reduced transaction cost, increased communication and coordination, and improve business processes. Fourth, e-commerce enables organisations to improve its value chain by creating strategic supplier partnership and delivering customized customer solutions. It allows organisations improve business infrastructural capabilities to play as an extended enterprise and not exactly a single business entity delivering greater value to its customers (May, 2000).Each of these drivers can be harnessed as a propelling force for the business, rather than a crooked or immobilizing one (May, 2000). industry areas of E-commerceSix key emerging application areas in electronic commerce can be identified. It can be organize into two important domains business-to-consumer (B2C) and business-to-business (B2B). The application areas embroil categories in consumer retailing to real-time business-to-business quislingismism (May, 2000). Retailers were the first adopters of the business-to-consumer e-commerce. Retailers found selling products and services online as a promising channel of distribution for its products and reaching new markets. Nonetheless, B2C e-commerce is at a time more diversified and classified into deuce-ace application areas which include retail, auction, and advice (May, 2000).The three application areas of B2C e-commerce are retail, auctions, and advice. Although each has its own distinguishing characteristics, and dynamics, a consistent theme underlies the development of all three. This is the increasing busy-ness of consumer lifestyles the extension from work life into private life of a last of ever-decreasing time-frames and ever-increasing obligations. Lack of time and complexity of prime(prenominal) drive the growth of products and services in each of these areas (May, 2000).Business-to-consumer is a term that stresses the focal point of delivery B2C e-commerce is supposedly something done by business to consumers. Yet this domain is founded on intense customer focus. Insight into the foreign desires and pressures affecting consumers is a powerful ally in building successful strategies in this highly competitive area (May, 2000).Business-to-business, on the other hand, is the umbrella term used to refer to proceedings between businesses conducted online, and the business networks and supply chains that make these transactions possible. While B2B activity has always, taken place, the Internet brings with it a new framework, B2B companies no long-range need to depend on the conventional one-to-one model for business transactions (Michel, 2003).Procurement, inventory exchange, and real-time collaboration are relatively obscure categories of application, which have the potential to flip many businesses inside-out. Procurement introduces process improvements in the buying functions of organisations and also points the way to a more competitive environment in inter-company trading. Inventory exchange introduces the apparatus of the market to smooth out supply and demand inefficiencies across entire value chain, potentially lowers transaction and carrying costs, and focuses on improving exchange of supplier information. Real-time collaboration allows organisations to cooperate as fluid colonies of actors, undermining the perceptual constancy of companies who prefer hands-off relationships or who prefer their reality-checks to be presented monthly (May, 2000).e-Commerce application in Retail IndustryReta ilers are at once increasingly adopting electronic commerce as another distribution means of selling products and services. Online channels have also proved increasingly popular amongst retail companies within other formats such as hypermarkets or catalog retailers, who have attempted to expand into the sector to escape from stale growth within their respective markets (Datamonitor 2006).Datamonitor estimates the world-wide Internet retail sector treasured at $656.4 one thousand million in 2005, representing a commingle annual growth rate (CAGR) of 30.3% over the 2001-2005 boundary. The estimate is based on the total revenues generated through the sale of retail goods via online channels, valued at retail selling price, with any currency conversions calculated using constant 2005 annual average exchange rates (Datamonitor 2006).With the number of Internet users increasing exponentially year-on-year, the industry has experienced strong global growth within the global Internet r etail sector. Much of the demand for online purchases is out-of-pocket to the escalating number of working mothers and time-starved consumers who are conveniently seeking ways of shopping without the rile of driving to a retail store and falling in-line (Datamonitor 2006).At present, drugs and health & watcher aids are the sectors most lucrative segment in 2005, accounting for a total of $154 billion in total revenues or 23.5% of the retail sectors total value. Computer, hardware, software, and supplies contributed prodigious revenues in 2005, generating $114.9 billion in revenues or 17.5% of the sectors total value (Datamonitor, 2006). While analyst do not see a similar large growth in the global Internet retail industry, experts still is optimistic the pace of revenue expansion for the next four years. Industry experts project to the expansion of industry to remain strong valuing the industry at $1.169 trillion by 2010. This translates to 12.2% CAGR over the 2005-2010 period (Datamonitor, 2006). In terms of revenues generated per region, Datamonitor reports that Europe has the largest market share in the global Internet retail sector with 44.4% of total value, followed by the United States and the Asia Pacific with 22.5% and 21.7% respectively (Datamonitor, 2006).