E-Business Strategy: A Case Study

Introduction

E-business refers to the application of the “internet technology” to run various business processes and systems where the result is a “differentiated business value” (Singh 1). These processes are integral to one solution, but this final solution offer flexibility of the single systems, as well as facilitating secure transactions.

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The coming of the World Wide Web brought new power in the business arena. It has facilitated inter-connectedness between customers, suppliers, producers and manufacturers, as well as established linkages between firms. This has contrasted the first ideas in e-commerce strategies in the 1990s, which involved application of “stand-alone” solutions with less linkage to each other (HighTech Dimensions). This inter-connectedness and linkages have presented a variety of advantages and opportunities in business, including cutting costs of operation, faster means of doing business and business flexibility. This does not mean that there are no challenges and disadvantages of these networks. E-business aims at utilizing these “networks” to form an efficient strategy to facilitate business activities (Abdullah, 2).

This paper analyzes the case study of Triplim Exporters. The company is an exporter of a variety of commodities in the electronics market, including computers and television sets. The products are both for home and office use. Export markets for the company are in third world countries in Africa and Arabian countries. The company buys these commodities from the United States, China, and UK markets. The suppliers are the main producers of these electronic products. The company employs 100 workers in the sales, procurement, and supplies departments, IT support, as well as customer relationship departments. The company has been in business for more than ten years now. Although it has put in place traditional strategies to win local and international markets, the company is yet to implement e-business strategy. Traditional strategies include establishment of outlets in various markets where it has customers.

The company has already established an online portal as part of their plan for e-business strategy. From a careful analysis, the company has found the need to establish e-business strategy, with an overall aim of covering more markets and gaining more sales. This paper recommends e-business strategy for Triplim Exporters. The paper first highlights the challenges and market situation facing the company before discussing an efficient e-business strategy for the exporter company.

As part of the e-business plan, the company aims at providing low prices for the different range of commodities it sells online. The products vary from home electronic products, stationeries, and office stationeries.

Situation in the market

The electronic sector is experiencing low costs of switching products among customers because of high competition. This competition partly occurs because of increase in producers for electronic products. In addition, demand is changing for various products because of dynamic nature of technology: customers are quickly shifting to one product from another as technology discovers new products with better and enhanced features. Customers in this market are demanding for high quality and cheaper products at the same time, reliable and quick service delivery. The sector is also experiencing high competition, which is forcing businesses to look into strategies for lowering costs of operation and production.

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Companies in this market are adopting such strategies as going online and supply chain management. For instance, several enterprises in Sweden are already using internet to enhance their marketing and ecommerce operations. Denmark had an “internet usage” rate of 95% in 2002, according to a study of OECD countries (Department of Enterprise, Trade, and Employment 15). Some gaps exist even with high rate of usage of internet by firms, such as the fact that many lack a linkage between payments systems and IT invoicing systems.

However, several companies in these markets are already managing orders and using re-ordering technologies. In Sweden, even small suppliers have been forced to enter into online “chain supply systems” by large companies (Department of Enterprise, Trade and Employment 24). In addition, knowledge management identifies as an important aspect of businesses in this sector. This is forcing companies to adopt e-business strategies, which put into consideration the aspects of customer management, supply management, knowledge management, and expanding of current markets. An e-business strategy seems inevitable for Triplim Exporters. The business environment in this sector has also been dynamic. Companies are facing economic challenges characterized with low customer expenditure for the products.

E-Business Strategies for Triplim Exporters

Traditional competences can be enhanced through e-business techniques or the company can create “new competences” (Jutla, James & Peter 2). Clearly, an all inclusive e-business strategy will touch on several aspects as aforementioned, such as employee management, knowledge management, supply management, as well as linkage with business partners. E-business strategies must address aspects of business as they affect each “stakeholders,” from employees to customers (Jutla, James, & Peter 1). All these stakeholders need appropriate enhancement in an efficient strategy. This paper will focus on e-business strategy that will enable Triplim achieve the goals of selling more products and covering more markets.

This is e-business strategy helps in distribution, as well as managing customer relationships. The use of multiple business strategies, which are interlinked or separate, features in business literature. It is evident that companies can accommodate an e-business strategy while applying traditional models. Several companies employ the internet as a distribution channel, in addition to using traditional channels. This model of distribution is termed “clicks-and-mortal” (Jutla, James & Peter 2).

Indeed, Jutla, James, & Peter observe that this is the “most sustainable” model of channeling products to customers. Thus, the paper proposes a model for e-business strategy linked with traditional distribution methods. This will mean that the company will not have to abandon the current strategies. Triplim is not a company born on the internet; hence, a “clicks-and-mortal” strategy will be beneficial for them, since they only aim at expanding the current distribution channel to capture more markets. As will be seen latter, there are several e-business solutions, to adopt in the final e-business model. All these solutions can interlink in the company web channel. Web channels provide Triplim Exporters with an opportunity to offer products with lower prices than the physical outlets. This is because the channel of distribution is cheaper in costs than other physical channels. Web channels can therefore, benefit the company to win a larger market share. Cao, Hng-Qin Ye and Xue-Ming propose a combination of hardware and software solution for a “web-based” supply chain (p. 765). Use of software web-based supply solutions can enhance product customization. In addition, “internet-enabled” supply facilitates meeting local customer and environmental needs according to Cao, Hng-Qin Ye and Xue-Ming (p. 766). Triplim Exporters would be using many interaction patterns where all stakeholders engage and support the company meet customer obligations.

However, some companies are relying solely on the internet as their distribution channel. A successful case reported by Jutla, James, & Peter is that of Bulk Handling Technology which had very high sales through their online portal and urged to enter into very expensive contracts in the international markets in 1990s. The company only employed three people.

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Knowledge management identifies in literature as an important practice to managing employee-based knowledge resources, as a strategy for e-business teams. Research indicate that organization incur some losses when they do not put in place mechanisms and tools to identify, collect and manage “organizational expertise” (Jutla, James & Peter 2). Organizational expertise includes innovation of employees, their attitudes, and abilities. Leveraging on knowledge management can help Triplim Exporters to manage their relationships with their customers. One of the innovative ways through which KM is applied is Customer Relationship Management. It involves “technology-oriented” strategies of managing the interactions between the customer and the company (Gebert, Malte, Lutz & Gerold, n.p.).

Various forms of knowledge from various sources need to be managed, such as that from customers (e.g. feedbacks about products), about customers (e.g. their expectations) and for customers (e.g. information about products meant to satisfy the customers). CRM can link to the web channel.

E-business strategy aiming at winning more customers needs to focus on the customer as the central of business practices. This can be achieved by the “e-business stakeholder model”, where the customer satisfaction, customer retention and demand creation is the focus for all the business stakeholders (Jutla, James & Peter 5).

However, one understands that every customer has his/her needs. Research proposes that “micro-segments” – which refers to the adoption of many customized solutions to cater for the various needs of customers – can help in such situations (Jutla, James, & Peter 2). Since the company has several business lines, each line can have its enterprise resource planning system. Then, the company can use integration technology to enable viewing of these many lines to a single customer. Knowledge management can also help in managing these various needs of customers. Human resource should manage these micro-segments through knowledge management software. In addition, such software and management of the customer relationships can enable the company to customize their services. This is through collection and application of relevant data.

One of the important aspects that the company must address while seeking to come up with a e-business channel is that it must be linked with other physical channels. In deed, as a virtual store supplying commodities, it must link to the physical stores to facilitate complete transaction. This is why the e-business strategy must not eliminate the traditional model but boost it. For instance, linking the online store with the physical local store can facilitate customers to return goods without any further struggle, if the company does not collect it instead.

The customer must be availed with the opportunity to attend demonstrations for the new products at the local store, for instance, when the company announces them on the online portal. In addition, it is necessary to link the e-business strategy with the Supply Chain Management where the goods and services arrive to the customer “more efficiently.” This means that the company must involve its suppliers and local stores. Supply chain management includes a range of other aspects such as inventory management, procurement and the forecasting of customer demand among others (León-Peña 79). Enterprise Resource Planning technology may be beneficial for such practices.

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The company needs to identify all the elements involved in their value chain, an exercise termed as “value chain deconstruction” (Timmers 4). These elements include the primary and support elements. Technology needed to manage staff and procurement is termed as support elements while such components as sales and marketing identify as primary elements. These elements should become integral to each other through information processing. This process of integrating primary and secondary elements is the “re-construction” of the value chain (Timmers 4).

The other aspects of online virtual distribution channel focus on the quality of the solution itself. The web channel must have the attributes to accommodate traffic immediately for purchases, be attractive from the look of it, interactive in nature, and allow customer support. It must provide the necessary information to the customer as they look for the various answers. It must be easy to use and intuitive. It is necessary that it must avail such services as payment for the services and products. As such, it must be secure in nature. Literature recommends that the solution be integrative. It would allow linkage with other websites from other firms, such as suppliers and partners in order to facilitate business-to-business transactions. B2B solutions allow companies to earn a large income as transaction fees and subscription fees. E-procurement is a method which companies are bringing suppliers into the web channels.

Recommendations

As can be seen Triplim Exporters desire to gain more markets and more customers to increase sales of their products and related services. In this respect, e-business strategy can help them, but it is important to focus on e-business solution that carries other benefits such as linking all stakeholders. This is to avail the possibility of future expansion, such as including e-procurement strategy. This solution compares to a strategy where the company adopts a stand-alone web channel solution to distribute products in more markets. The paper proposes e-business stakeholder model for Triplim Exporters, where the company leverages on gaining more customers, retaining the customer, increasing demand for commodities, and boosting customer satisfaction. The strategy helps in managing customer relationships to uncover his/her preferences and choices. The company aims at introducing all stakeholders to assist them in this respect.

These stakeholders include employees, partners, and customers. The company makes use of three important aspects of business to support this model, namely technology, knowledge management, and trust in the relationships. Moon indicates that these factors are also “important” as far as “internet retailing is concerned” (p. 11).

A number of factors may drive “Price competition” in electronic markets where IT is applied. One such factor is when there is increased flow of free information. When consumers reduce perception that the product is not complex, price competition may occur. In addition, decreased asset “specifity” and transaction costs would lead to price competitions according to Moon (p. 12). This means that the customer may win in such markets, normally. However, suppliers adopt IT strategies to make price comparisons “difficult” for consumers. In addition, these strategies can help them exploit small niches to control the benefits getting to customers. Combination of “lower seller costs” strategies and use of mechanisms for controlling the quality of products that are entering the electronic markets can result in the prices of these commodities being higher in the electronic markets than they are in the physical markets (Moon 12).

Triplim Exporters should analyze and become aware of the strategies competitors are using for this purpose. The current traditional strategies are unable to deliver the desired increases in customer base and increase profits in sales. They are unable to deliver customer retention and high demand for the products supplied by the company.

The relationships between the shareholders build through provision of feedbacks, knowledge management, and online collaboration. Customer transactions are easier and quicker through facilitated viewing of products and purchasing online. They pay through secured connections and are supplied commodities by the local shops. This means that the e-business shop has to connect to the computerized local shops.

In order to implement this strategy, the company needs to access the current situation and needs. The company must examine the objectives it aims at achieving through this strategy. Since this strategy serves to boost the current strategies, Triplim should analyze the current strategies and establish the linkage points. Here, it is assumed that Triplim will make the decision of being more e-business enabled as compared to abolishing the existing distribution channels. The company then should prioritize the main objectives and aspects. The other important step to implementation is the determination of all stakeholders to work with.

The company must also identify the competitors and find out what they are doing. The company then should establish web integration technologies available in the market and choose the ones that serve it needs. Alternatively, the company can ask for development of a customized solution by working with a development partner. A development partner should be able to develop a customized solution that links business needs and aspects as well as stakeholders.

References

Abdullah, Al-Mudimigh. “E-Business strategy in an online banking services: A case study.” Journal of Internet Banking and Commerce 12.1 (2007): 1- 8

Cao, Chengxuan, Heng-Qing, Ye, & Xue-Ming, Yuan. “e-Business strategies for software focused supply chain management.” IEEE International Conference on Industrial Informatics in 2006 in Singapore, New York: IEEE, 2006.

Department of Enterprise, Trade and Employment. E-Business strategy: Optimizing usage of ICTs by irish SMEs and microenterprises. Department of Enterprise, Trade and Employment, 2004. Web.

Gebert, Henning, Malte, Geib, Lutz, Kolbe, & Gerold, Riempp. Towards customer knowledge management: integrating customer relationship management and knowledge management concepts. Communications of the IIMA 9.4 (2009): 37-52.

HighTech Dimensions. E-Business strategies. HighTech Dimensions, 2007. Web.

Jutla, Dawn, James, Craig & Peter, Bodorik. “A methodology for creating e-business strategy.” International Conference on System Sciences in Hawaii in 2001. New York: IEEE, 2001.

León-Peña, Jorge. “E-business and the supply chain management.” Business Intelligence Journal 1.1 (2008): 77-90.

Moon, Jon. What influences business-to-business electronic markets’ performance? – A study of four companies. Henley Management College, 2004. Web.

Singh, Mandeep. “A primer on developing an e-business strategy.” First Stop Business Information Center, Adams Springfield, IL. n.d.

Timmers, Paul. “Business models for electronic markets.” Electronic Markets 8.2 (1998): 3-8.

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