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Executive Summary
The purpose of this particular report is discussion about the importance of the
Ecommerce and the use of ecommerce in our daily lives. This report also showcases
the challenges and drawbacks of the Ecommerce. It is also about converting brick and
mortar business into successful venture through Ecommerce. Therefore it also offers
viable opportunity to any organization to improve its operations and widen its
customer base. Ecommerce consists of platforms that enable the interaction of buyers
and sellers. It is also a platform for every individual to make profits through
Ecommerce by selling his products and making his/her services available to the
people. A business can choose to operate online entirely or partially. Coventry City
Books exists as a brick and mortal retail store hence consists of a physical business
premise where the customers make over the counter purchases and borrowing of the
books.
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Contents:
1.0 Introduction .................................................................................................... 4
2.0 Main Report..................................................................................................... 5
2.1 Business-To-Business (B2B) ............................................................ 5
2.2 Business-To-Customer (B2C) ........................................................... 6
2.3 Opportunities of Ecommerce Strategy…………………………….8 2.4 Challenges of Ecommerce Strategy………………………………9
2.5 How Consumer Preferences can be satisfied using the World Wide Web? 11
3.0 Recommendations………………………………………………………………...13
4.0 Conclusion..………………………………………………………………………...13
5.0 Reference List……………………………………………………………………...14
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1.0 Introduction:
Ecommerce involves the running of business with the help of computer
networks like the Internet. It facilitates the buying and selling of commodities as well
as services across the Internet. Modern ecommerce mainly utilizes the World Wide
Web in conducting business though it may also incorporate some technologies such as
the email. Ecommerce offers various services; online shopping enabling the direct
retail sales to customers, online marketplaces for the customer-to-customer or
business-to-customer transactions, business-to-business interactions, collection of
demographic data, electronic data interchange, and marketing platform through email
and fax. Ecommerce enhances the market presence and position of a business. This
enables the business attain its revenue targets and realize profit maximization. The
growth of a business may also result from adoption of ecommerce in the running of an
enterprise.
This system may pose challenges in meeting the customer’s expectations as
well as ensuring customer satisfaction. A customer may face challenges in physically
visiting the store hence preventing their access to the facilities. The bookstore must
therefore consider incorporating the Internet and other ecommerce facilities in
undertaking its operations. This begins with understanding ecommerce, its available
facilities, and choosing the most appropriate for the business. Various kinds of
ecommerce transactions exist with the major ones being business-to-business and
business to customer.
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2.0 Main Report:
2.1 Business-To-Business (B2B)
This involves the transactions between two or more businesses. Such
transactions may include supplier- manufacturer transactions as well as manufacturer-
wholesaler transactions. These transactions cover approximately 80% of the overall
ecommerce transactions. A standard supply chain involves numerous B2B
transactions and just one B2C transaction through sale of the finished product. It
involves the relationship among various businesses in the operation of their
businesses. B2B market consists of two basic components; the e-frastructure and the
e-markets. E-frastructure covers the architectural framework consisting of logistics
i.e. warehousing, transportation, and distribution, service providers, outsourcing
functions such as web-hosting, customer care services and security solutions, auction
management software, content management software and web-based enablers.
(Investopedia n.d.)
E-markets consist of platforms that enable the interaction of buyers and
sellers. B2B incorporates applications that assist in inventory, supply, distribution,
channel, and payment management. Various websites facilitate B2B transactions such
as company websites, product supply and procurement exchanges, specialized portals,
brokering sites and information sites. Company websites target the audience of other
companies as well as the employees of the company. They disseminate information
concerning a company’s operations to attract potential clients. Product supply and
procurement exchanges assist a company in the placement of orders for supplies,
request proposals, as well as bidding to make purchases at desirable prices.
Specialized portals provide information, discussion platforms, and product listings
among other features. Brokering sites act as intermediaries between a company and
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potential clients for services and commodities. Information sites offer information to a
company and its employees. It offers specialized search engines to facilitate this. For
the business to succeed on the online platform, it needs to maintain proper
relationships with other businesses that facilitate its operations. A breakdown in the
B2B transactions negatively affects B2C transactions and result in business failure. A
retailer needs to maintain a healthy relationship with the wholesaler who supplies
commodities in bulk and at a lower cost. A poor relationship will amount to shortages
for the retailer and tainting of the corporate image. (Investopedia n.d.)
2.2 Business-To-Customer (B2C)
This form of transaction involves a business and its customers for the
exchange of physical goods, services, information goods among others. This became
the earliest form of ecommerce since it inspired the other forms of businesses. Its
establishment began in the 1990s with the sole purpose of enhancing online retailing.
It mainly emerged to assist e-tailing for the online direct sales to customers on
platforms like Amazon.com, E-trade, among others. It holds the second position in the
e-market after the B2B transactions. The most common examples of this form of
transaction involve the purchase of consumer products, information goods, and
financial management services. (DigitSmith n.d.)
B2C transactions have various categories; direct sellers, online intermediaries,
advertising based models, community based models, and fee based models. The
subdivision of direct sellers falls into two categories; manufacturers and e-tailers. The
manufacturers use the Internet as a platform to sell their finished products directly to
customers. This aims at eliminating intermediaries thus minimizing distribution costs.
Direct sales assure the manufacturer of establishing a loyal clientele since the
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products reach the customers at low prices. E-tailers on the other hand make direct
sales to customers from their warehouses. This enlarges their customer base and
enhances the delivery channels. The online intermediaries take the brokerage role
between customers and the business. They facilitate the transactions by assisting the
customers in making the purchases. They help in assembling of attractive packages
for consumers to fasten the shopping process and minimize the costs incurred.
Facilitation of financial transactions also falls under their docket. The advertising-
based models utilize specialized sites as well as high-traffic sites to advertise for
various commodities. Placing of adverts on these sites ensures that information
reaches a large number of potential consumers. Advertising businesses therefore earn
income from the amount of traffic the direct to the respective adverts. Companies may
utilize these services to attract a niche market since people with certain characteristics
visit certain sites. Community- based model seek to disseminate product information
to various communities on the web such as chat groups. Fee-based models obtain
income depending on the value of content they post on the Internet. (InvestorWords
n.d.)
Customers form part of the most important stakeholders in any form of
business. Since a business requires customers to survive and grow, it must capitalize
on the opportunity to widen its market base. Ecommerce offers a perfect platform for
direct interactions with customers and elimination of the barriers posed by
intermediaries. B2C therefore becomes the most basic form of Ecommerce
transactions since every business requires selling of its products to consumers to raise
revenue income and make profits.
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2.3 Opportunities:
Elimination of Geographic Limitations
Ecommerce enables a business to operate on the global platform. This
eliminates the geographic barrier placed by a brick and mortar business that can only
market its commodities to customers near its physical location. Ecommerce facilitates
transactions at any point in the global market. (Triua 2014)
Obtaining New Customers
The success of e-tailing largely depends on traffic from search engines.
Potential customers may find the ecommerce websites through following certain
links. This enables them to learn about a company and its products for the first time.
The information may further trigger them to make purchases of the products offered.
Costs Reduction
Conducting business on the online platform helps the business save on various
costs. A brick and mortar business requires a large initial investment to cater for the
establishment of physical premises. This entails the cost of building the offices,
warehouses as well as the production plant. A business operating entirely on the
Internet platform does not require a physical office hence saving on establishment
costs. Ecommerce also saves the business marketing costs since the Internet offers a
cheaper advertising platform. It eliminates costs incurred in hiring sales persons to
undertake door-to-door sales promotions. The cost reduction enhances the pricing
system by offering discounts to customers.
Time Saving
Running an online business saves on time since the Internet enables the
stakeholders visit the business premises at the click of the mouse. The customers do
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not need to make physical visits to the premises to make enquiries or to purchase
products since they can do it from any location.
Communication Enhancement
The Internet facilitates communication between the business and its
stakeholders. Proper communication can ensure online delivery of products and
services to customers and timely delivery of raw materials for production purposes. It
also eliminates misunderstandings that may delay operations. The business can also
utilize the communication channels to communicate with its employees and offer
guidelines.
Information
The online platform offers valuable information to stakeholders of the
business at the click of a button. An investor may require information on the financial
performance of the business to make decisions regarding financing. A customer may
also obtain information concerning the available products and their respective prices
from the Internet. The business provides information on their offers, new
commodities and other facilities. (ESalesTrack n.d.)
2.4 Challenges:
Lack of Personal Touch
Ecommerce eliminates the need for personal interaction between the service
provider and the customer. This may cost the business customer loyalty due to the
lack of customer satisfaction. Personal touch complements the customer service and
ensures customer satisfaction. (Triua 2014)
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Virtual Existence
A business whose existence appears only online may face extinction in cases
where its websites becomes dysfunctional. This may cause drastic loss of customers
that the business may not recover. Online existence may deter customers from having
faith in the business since it may collapse and cease to exist any minute.
Low Security Level
The rising trend of cyber crimes has lowered the confidence of customers and
businesses on online transactions. Online transactions have posed a great risk in the
financial transaction hence negatively affecting ecommerce. Some customers as well
as businesses have become sceptical about electronic payments due to the risk of
giving their financial information to malicious people.
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2.5 How Consumer Preferences can be satisfied using the
World Wide Web?
With the operation of a brick and mortar business, the customers must make
physical visits to the bookstore to borrow books, make enquiries, and make purchases.
The bookstore maintains records that facilitate the buying process and the customers
obtain evidence of purchase or borrowing of books. The use of the Internet in running
the business will enable the customers make book purchases at lower costs. They can
therefore increase the number of their orders, which consequently raises the revenue
of the business. Initially, the customers had to consider the travelling costs, which
cease to become an issue with the introduction of online transactions. The customers
redirect the amount spent on travelling into buying more units of the commodity.
Elimination of the queuing system improves the corporate image and attracts more
customers who perceive the bookstore’s operations as efficient. The minimal effort
offered by electronic transactions encourages repeated purchases.
Ecommerce offers the consumers a wide variety of commodities to choose
from hence the consumer obtains maximum satisfaction from the commodities
purchased. The World Wide Web offers search engines that facilitate obtaining
information concerning a business’ operations, prices, brand names, available services
and general information on a company’s products. The extensive information offered
attracts more customers who learn about the commodities offered by the company.
The effective communication ensures customer loyalty since it enables personalized
customer attention. The World Wide Web offers the bookstore information on the
highly demanded books and the emerging trends of bookselling. This offers the
bookstore competitive advantage and ensures it stays ahead of its competitors. The
elements of ecommerce also facilitate the translation of physical books into eBooks
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that facilitate the transacting process. EBooks facilitate book storage and management
of the inventory. Tracing of books becomes easier hence, customers receive quick
services and can access books at their own convenience.
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Recommendations and Conclusions
The adoption of ecommerce by a brick and mortar business therefore offers it a viable
opportunity to improve its operations and widen its customer base. Ecommerce helps
the achievement of the major goals of every business entity, which involve revenue,
and profit maximization. The benefits obtained and gained from ecommerce
overshadow its downside making it a crucial facility for a business to consider.
Elements of ecommerce help in enhancing internal relations among the employees,
which translate in the production of quality goods and services to end-users.
Ecommerce enhances transaction between a business and its stakeholders such as the
customers, other businesses, and the government, among others. Business-to-business
transactions dominate the ecommerce platform due to interactions with raw material
suppliers, manufactures, and wholesalers. Business-to-customer transactions
dominated the original ecommerce market at the initial introduction of the World
Wide Web. The World Wide Web continues to facilitate the transactions on the online
market hence improving the global economic environment.
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Reference List
1. Investopedia (n.d) Business-To-Business [online] available from
http://www.investopedia.com/terms/b/btob.asp (n.d.) 2. Investopedia (n.d) Business-To-Business [online] available from
http://www.investopedia.com/terms/b/btob.asp (n.d.) 3. DigitSmith (n.d) Ecommerce Definition [online] available from
http://www.digitsmith.com/ecommerce-definition.html (n.d.) 4. InvestorWords (n.d) B2C [online] available from
http://www.investorwords.com/5410/B2C.html (n.d.) 5. Triua (2014) Advantages of E-Commerce [online] available from
http://www.triua.com/100/5-advantages-and-disadvantages-of-e-commerce.html (25 December 2014)
6. ESalesTrack (n.d) Advantages of Ecommerce [online] available from http://www.esalestrack.com/blog/2008/09/advantages-and-disadvantages-
of.html (n.d.) 7. Triua (2014) Disadvantages of E-Commerce [online] available from
http://www.triua.com/100/5-advantages-and-disadvantages-of-e-commerce.html (25 December 2014)