To What Extent Is an E-Commerce Strategy the Best Way for Businesses to Increase Their Profits? (40 Marks)

In: Business and Management

Submitted By toddpitcher
Words 1411
Pages 6
To what extent is an e-commerce strategy the best way for businesses to increase their profits? (40 marks)

E-commerce is the online transaction of goods and services, which has completely revolutionized business and the way in which businesses can operate. It’s now easier for customers to compare prices/products with a little time spent browsing the Internet opposed to dragging themselves to the stores. This means that e-commerce is having an impact on what and how much businesses sell, therefore influencing the profits the business gets. In this essay I will consider whether an e-commerce strategy is the best way for a business to increase their profits, or whether e-commerce is not the best strategy to do this. I will be arguing that with the use of e-commerce businesses have more reach to customers and can provide more options to increase their profits. Alternatively I will also talk about how e-commerce may not work for all business plans/strategies, therefore increasing the risk of loss.

Introducing an e-commerce strategy allows the business to increase its customer reach, creating a larger customer base, as e-commerce is accessible to anyone who can use the Internet. E-commerce also creates an ease of use/purchase for customers, which means they do not have to go the physical stores, saving money and time. The combination of ease of use/purchase and larger customer reach results in the ability for companies to increase sales, and so this would lead to higher revenues. Costs would also be lower as store staff are not needed as much, resulting in higher profits being made. 92% of adults in the UK (2014) use the Internet, along with 76% purchasing online; a clear example of a large customer base providing the opportunity for higher sales and therefore profits. HMV are a business that provides an example of this. In 2015 their e-commerce website was…...

Similar Documents

E-Commerce Business Strategy

...E-Commerce Business Strategy Abstract The purpose of this paper is to solve the business problem of creating an E-Commerce business strategy for a traditional brick and mortar women’s boutique. The internet allows a company to reach a demographic through the Web that is all over the world, which results in an accelerated global marketing strategy and a possible competitive advantage in women’s fashion. There is a lot of competition on the internet and captivating the attention of customers will not be an easy task. The E-Commerce business strategy for Simply Unbelievable will be implementation of a cloud-based digital commerce platform that will create an exceptional shopping experience for consumers. Company Background Simply unbelievable is a home-based business that sells boutique fashions specializing in women’s clothing, jewelry, and handbags and has been in business for 10 years. Location is critical to the success of any business and Simply Unbelievable does not maintain a traditional brick-and-mortar store. The success of Simply Unbelievable has been by the home party plan business concept of direct selling to their customers. The home party plan has provided the perfect location for customers to view current fashion trends in the comfort of their own home or surroundings. Women who are comfortable spend more money and this has generated Simply Unbelievable revenues for the past 10 years. Simply Unbelievable has had no......

Words: 3856 - Pages: 16

E-Commerce

...questions worth a total of 35 marks * Part B: two case analyses worth a total of 65 marks Part A: Short-Answer Questions (35 marks total) Answer each question in one to two paragraphs. (5 marks each) 1. What are the major similarities and differences between the Google and Yahoo business models? Google and Yahoo are very similar, but there are also key differences between the two companies. Each site is considered a destination and is marketed as a place where consumers can fulfil their time on the internet by utilizing many different functions. Both of the companies can be considered B2C, or Business to Consumer companies. This means that they provide their services to consumers. Google and Yahoo are both portals, which means they offer users not only a functional search engine, but also a bundle of integrated services and content. This includes the ability to read the news, meet and chat with others and search for different entertainment such as celebrity gossip. Yahoo offers a search engine to users, but it also works to provide news, chat, e-mail and music. Google focuses mainly on being the very best search engine on the market. The revenue model for Google comes mainly from advertising and referrals from affiliates. On the other hand, Yahoo receives its revenue from advertising, subscription fees and transaction fees. The main competitors for Yahoo are AOL and MSN, while the main competitors for Google are Bing and Ask.com. 2. What are the most......

Words: 2980 - Pages: 12

What Is E-Commerce? the Key Components to Establishing and Providing a Successful E-Commerce Solution Within an E-Business Environment.

...16/04/2012 What is e-commerce? The key components to establishing and providing a successful e-commerce solution within an e-business environment. CONTENTS CHAPTER | PAGE | Introduction & Aims/Objectives of assignment. | 3 | 1. What is e-commerce? | 5 | 2. E-environment | 6 | 3. Establishing an e-business. How to support an e-business? | 9 | 4. E-business systems: infrastructure of hardware and software | 14 | 5. E-Logistics: Supply Chain & Procurement | 17 | 6. E-Security: Protecting and e-business & its infrastructure | 19 | 7. E-Marketing: How to push your e-commerce business using marketing tools online. | 21 | 8. E-CRM: Managing customer relations online | 24 | 9. The future of e-business | 29 | Conclusion | 31 | Bibliography | 34 | Introduction: Through this assignment I will be discussing the use of e-commerce in modern retailing. This essay aims to explore: What e-commerce is, the infrastructure needed to establish an e-business and the wider impact of e-commerce on the traditional business and retail environment. These aims will outline the main effects of e-commerce on a business. These will be achieved through: * Outlining the origins of e-business * Assessing the external impact of e-commerce on the environment & traditional retailing. * Examining the implementation and sustainability of an e-commerce business: Systems, Structures & Costs. * The impact of......

Words: 9784 - Pages: 40

With Reference to Your Own Research and the Item Above, to What Extent Do You Think That Targeting Emerging Markets Such as China Is the Best Way for Businesses to Achieve Profit Growth?

...– With reference to your own research and the item above, to what extent do you think that targeting emerging markets such as China is the best way for businesses to achieve profit growth? An emerging market is a market which is experiencing rapid growth and becoming highly profitable which becomes open to many businesses to enter. Achieving profit in China can be achieved through many ways by increasing revenue through changing the way the business operates or to operate as a joint venture. By doing this businesses that operate in China are able to benefit from their profit growth by becoming more well-known. There are exceptions however where business have become successful in achieving profit growth because of operating either unethically or non-environmentally friendly. There are also arguments and examples of business that have operated in China, who have not become successful from having targeted an emerging market because of vast amount of competition that is present. Targeting emerging markets in China has shown to be one of the best ways to achieve profit growth for businesses which sell food and drink, such as Yum Food Brands. China, having accounted for almost 40% of its entire company, was able to become a huge success by having KFC, its biggest fast food chain, reinvent its menus so that there was a wide choice for the 1.3b Chinese population who were are very experimental with western foods and brands. Through having a sheer size of population who like to......

Words: 1405 - Pages: 6

E-Commerce

...2/24/2015 Carolina Guerraz John Cabot University E-commerce Industry Analysis Contents Introduction 2 Industry Background 2 PEST Analysis 4 Political 4 Economic 5 Social 6 Technological 7 Michael Porter’s Five Forces Analysis 7 Threat of New Entrants 7 The Power of Suppliers 8 The Power of Buyers 8 Threat of Substitutes 9 Rivalry 9 Conclusion 9 Bibliography 11 Introduction The objective of this paper is to analyze e-commerce industry in Italy and to determine its attractiveness by applying PEST analysis and Michael Porter’s Five-Force Analysis. E-commerce is defined as the sale of products and services through computer networks.  As the world changes and technology advances, firms must adapt to new trends so that new competitive advantages can become part of the industry. In e-commerce industries, information and communication technologies (ICT) and merchandise are the suppliers, online retailers are the players, and end-consumers are the buyers. After having described the e-commerce industry background and its trends, both on a global perspective and specifically in Italy, an environmental analysis will be described as a way to determine the industry attractiveness. Industry Background The e-commerce industry is one of the fastest growing industries throughout the world even though differences exist in the stage of development from country to country. According to Euromonitor, global online retail sales have increased 17% from 2007 to 2012. In......

Words: 2657 - Pages: 11

To What Extent Is Targeting Emerging Markets for Sales the Best Way for Businesses to Achieve Major Growth in Their Profits?

...meet standards to be a developed market. This includes countries that may be developed markets in the future or were in the past. Many businesses may feel that it is most effective to target an emerging market to increase and maximise profits because the market can become loyal to the brand, making the market more sustainable. When a business expands into an emerging market, there is the opportunity to become part of an economic system that is still forming. Deloitte, a worldwide financial firm, notes that companies in emerging economies must expand capacity and capability. As large companies build power plants, roads and dams, other businesses step in to provide the locals with the goods and services they need. As the region's economy develops, the businesses that open up shop earlier may have a better chance at building lasting relationships with customers, increasing profits in the long run. Access to new capital is what drives many businesses to take on the risks of doing business in emerging markets. As new economies emerge, untapped capital is up for grabs and building and maintaining a pipeline to those funds helps companies not only expand abroad, but also bring in new resources for domestic growth. Emerging market capital can breathe new life into companies that have maxed out potential for new capital domestically. Small businesses especially may have opportunities to grow in emerging markets not available to them in domestic markets. For example, Procter &......

Words: 579 - Pages: 3

E-Commerce Essay

...E-Commerce Project Liberty University Online Busi-424 Since the early 1995 when commercial use of the web began to take off, E-commerce has transformed and impacted the way the businesses and consumers shop forever. Before the rise of E-commerce the only way to buy and purchase products was through your standard brick and mortar store and if you wanted to order products that were not available at that moment you would need to sift through a large catalog or directory. If you ordered through that you would send in the order item # along with basic contact information in mail and then came the long wait of receiving your product in the mail to your home or business. It all sounds really cumbersome, time consuming and inconvenient when compared to today’s current trends of ordering products. E-commerce has paved the way for people and businesses to shop easily, faster and more efficiently than was ever thought possible. Even though E-commerce is a relatively young industry with beginnings that point to only as far back as the 1970s, data has suggested that over the next few years some categories of E-commerce is expected to grow about 14% annually through 2017 while traditional retail sales are expected to only grow about 4% annually through that same time frame (Laudon and Traver, p. 27). There are four major types of E-commerce categories that are utilized daily. They include Business-To-Consumer (B2C), Business-To-Business (B2B), Consumer-to-Consumer (C2C) and Mobile...

Words: 3102 - Pages: 13

E Commerce

...E COMMERCE * Define e-commerce? What are the benefits of using e-commerce? The term ‘electronic commerce’ has evolved from electronic shopping, to imply all aspects of business and market processes enabled by the Internet and World Wide Web technologies. DEFINITION- Sharing business information, maintaining business relationships and conducting business transactions using computers connected to a telecommunication network is called E-Commerce. OR The exchange or buying and selling of commodities on a large scale involving transportation from place to place is known as commerce. When all this is done electronically, it is known as “e-commerce”. According to Philip Kotler: E-commerce can be defined as a general term for buying and selling process that is supported by electronic means. Electronic commerce, also known as e-business, a term for all kinds of business that are established electronically especially over the Internet. This includes both electronic sale (internet shops) and B2B transactions, i.e. business between two companies. It is any online transaction of buying and selling where business is done via Electronic Data Interchange (EDI). E-Commerce can be defined from different perspectives – 1. Communications perspective, 2. Business process perspective, 3. Service perspective and 4. Online perspective. E-commerce from communication perspective is the delivery of information, products or services, or payments via telephone lines, computer......

Words: 9434 - Pages: 38

Integrating E-Commerce Into Omni-Channel Strategy

...Abstract This paper presents comparative study, current trends, and success or failure of different industries in terms of strategies used by them for incorporating e-commerce in their Omni-channel success. The industries selected are Apparels, Electronics, Automobile, Groceries and Home Décor. We selected two companies in each of above industry in order to conduct research, analyze and draw conclusions for that industry as whole. Businesses which integrate e-commerce into their Omni-channel strategies generally have focus of providing superior customer experience and getting better analytics regarding their customers. But approach followed by different industries varies significantly. Another important consideration is that success rate of using such a strategy is different across industries. To achieve the goals mentioned for the study, we analyzed different functionalities of e-commerce that an industry would like when following such strategy. We divided functionality into Browsing, Buying, Pre and Post sale service, Reviewing and data analytics. This division also gave an insight into depth to which specific industry goes in applying such strategies. After this, we looked at breadth aspect of such a strategy by analyzing Digital Presence, Search Optimization Strategies, and Mobile integration. This exercise gave structured parameters to analyze the strategy of each industry. After above exercise, we researched about the two selected companies in each category based......

Words: 2943 - Pages: 12

To What Extent Is Growing Through Integration with Other Businesses a Good Way for a Firm to Increase Its Competitiveness?

...To what extent is growing through integration with other businesses a good way for a firm to increase its competitiveness? (40 marks) Growing through integration is concerned with mergers and takeovers of two businesses. There are several ways of integrating; Horizontal, which is where the business is in the same industry and or same stage of production, Backward Vertical, which is where it is the same industry towards a supplier, forward vertical, which is where it is the same industry towards the customer and Diversification, which is where the two businesses are totally opposite. Growing through one of the processes of integration can have a massive boost/effect on the competitiveness of a business as firms are able to buy out or merge with other large firms, in either their market place or another, to make one big firms in the market. The main firm will gain a larger percentage of the market at the two original market shares of the business are joint together. An example of this happening is in the mobile phone industry with the merger of Orange and T-mobile. This merger had brought together two of the UK’s biggest mobile phone networks and as a result gained them a combined 30 million customers, which meant they had overtaken O2 as the market leaders with a 37% market share. Furthermore, because of the two networks merging it provided them with a USP as it allowed customers to be able to receive signal of both......

Words: 1084 - Pages: 5

E Commerce

... 1.2 IN INFORMATION TECHNOLOGY Internet Service Provider Lesson 1 Lesson 2 & 3 Review Questions 2 THE NEW ECONOMY AND E-COMMERCE 2.1 Define E-Commerce 2.2 E-Commerce vs. business Lesson 4 Lesson 5 & 6 Review Questions 3 E-COMMERCE AND A NEW WAY OF THINKING 3.1 Changing paradigms Lesson 7 3.2 Portals and Vortals Lesson 8 3.3 E-Relationships Lesson 9 3.4 Return On Investment Lesson 10 & 11 Review Questions 4 BUSINESS OPPORTUNITIES ON INTERENT 4.1 Marketing Research Lesson 12 4.2 Advertising Lesson 13 4.3 Supply Chain Management Lesson 14 4.4 Customer relationship management Lesson 15 4.5 E-Business Lesson 16 & 17 Review Questions 5 BUSINESS –TO-CONSUMER E-COMMERCE 5.1 Defining business-to-business e-commerce 5.2 Creating a business-to-consumer e-commerce Lesson 18 Lesson 19 & 20 2 DIT In Information Technology | ECOMMERCE 511 Review Questions 6 BUSINESS-TO-BUSINESS E-COMMERCE 6.1 Define business to business e-commerce Lesson 21 6.2 Business to business hubs Lesson 22 6.3 Application service provider Lesson 23 & 24 Review Questions Prescribed textbook:  E-Commerce for South African Managers 1st ed 2000 Bothma CH 97806255837 Interactive Reality  E-Business 1st ed 2013 Schneider G. 9781408093672 Cengage 3 DIT In Information Technology | ECOMMERCE 511 INTERACTIVE ICONS......

Words: 49145 - Pages: 197

To What Extent Do Urban Areas Create Their Own Climate (40 Marks)

...To what extent do urban areas create their own climate (40 Marks) An urban area is the region surrounding a city. Jobs are those in a non-agricultural field, making urban areas very developed causing a high density of human structures such as houses, buildings, and transport links. Urban areas contain microclimates which measures the average weather condition in a small area. Due to human activity, temperature in an urban area is a fundamental characteristic, as temperature is relatively higher compared to surrounding rural areas, named as an urban heat island. This is due to housing and buildings being constructed close together. The material used for building is non-reflective and therefore absorbs heat, also road surfaces such as tarmac and concrete have a high thermal capacity and result in large insulation due to the albedo effect, where only light surfaces reflect more heat. Therefore urban heat islands have a low albedo effect due to the dark coloured nature of the area, only 5-10% of radiation is reflected due to the dark colours. There are large amounts of buildings with glass windows within urban areas due to high building capacity, the glass contributes a high reflective capacity and therefore reflects heat towards the surfaces where it is absorbed. Average night temperature in an urban area is 4 degrees Celsius warmer than surrounding areas due to the dust and clouds acting as a blanket to reduce radiation. During the night, temperatures remain high as the......

Words: 941 - Pages: 4

E Commerce

...08-076 August 11, 2008 E-commerce at Yunnan Lucky Air Inaki Berenguer, Cai Shijun, Li Liang, Liu Jing, Ningya Wang Preserve the essence of traditional Chinese culture while learning from successful models of the world. - Yunnan Lucky Air, statement of corporate culture Fortune had favored Yunnan Lucky Air. Four years after its founding in 2004, Lucky Air had grown into a US$104.3 million (RMB720 million) low-cost airline, serving domestic routes from its hub in Kunming, the capital of southwestern China’s Yunnan province. Yunnan was one of China’s top tourist destinations, famous for its beautiful landscape and multi-ethnic culture, and Lucky Air had successfully attracted over 1.2 million Yunnan-area travelers in 2007 alone – more than double the number of passengers from the year before. Compared to such major competitors as Air China and China Southern Airlines, Lucky Air operated at a relatively small scale, modeling its low-cost, highefficiency strategy on Southwest Airlines in the United States. And the years of consistently rapid growth seemingly demonstrated the model’s strength. Yet Lucky Air and its parent, Hainan Airlines, were growing concerned. The Chinese airline industry was heavily regulated, limiting flexibility for new airlines. Nonetheless, new low-cost competitors were blossoming, and Lucky Air found itself among an increasingly crowded field: there were 11 low-cost Chinese airlines by 2007, and two more waiting for official approval....

Words: 5376 - Pages: 22

To What Extent Is It Inevitable That Businesses That Fail to Invest in E-Commerce Will Lose Market Share to Competitors That Do Invest? (40 Marks)

...To what extent is it inevitable that businesses that fail to invest in e-commerce will lose market share to competitors that do invest? (40 marks) In this essay I will be discussing the extent to which businesses that do not invest in e-commerce lose market share to competitors that do invest. E-commerce is the trading of business online rather than through physical stores. There are several businesses that trade solely online. For example ASOS, whereas most businesses trade online as well as owning physical stores, these include Topshop, Next, etc. I will use these businesses to discuss to what extent is it inevitable that businesses that fail to invest in e-commerce will lose market share to competitors. One reason why it is inevitable that businesses that do not invest in e-commerce will lose market share to competitors that do invest in e-commerce is because of the improvement in technology. Several years ago when the Internet didn’t exist or when it was very limited, in order to succeed businesses had to own physical shops, as they were the only way of selling their produce. However, nowadays everyone has the Internet, therefore it is not always necessary for a business to own physical shops as customer can purchase items using their computers, which is much quicker and easier than searching through the shops, the Internet also opens up their target audience, allowing them to target a variety of ages. Therefore if a business does not invest in e-commerce then they......

Words: 951 - Pages: 4

E-Commerce

...European Commission, DG Internal Market and Services Unit E2 STUDY ON THE ECONOMIC IMPACT OF THE ELECTRONIC COMMERCE DIRECTIVE FINAL REPORT | 7 SEPTEMBER 2007 Study on The Economic Impact of the Electronic Commerce Directive COLOPHON Authors Dr. Claus Kastberg Nielsen, Mr. Christian Jervelund, Ms. Karin Gros Pedersen, Ms. Benita Rytz, Mr. Eske Stig Hansen, Mr. Jacob Lind Ramskov Client Date: DG Internal Market and Services, European Commission 7 September 2007 2 Study on The Economic Impact of the Electronic Commerce Directive TABLE OF CONTENTS Executive Summary.........................................................................................................4 Preface 6 Chapter 1 Main findings............................................................................................7 1.1. Intermediary providers and certain online merchants have benefitted already.......12 1.2. Cross border trade and productivity growth.........................................................12 1.3. Contractual obligations in consumer contracts may hinder cross border trade......14 Chapter 2 The impact of specific provisions............................................................16 2.1. Limited liability provisions ..................................................................................16 2.2. E-contracts ..........................................................................................................23 2.3. Information......

Words: 25986 - Pages: 104