Buss 4- Research theme E-commerce

Buss 4- Ecommerce Research

• Bulletpoints-
• 1- The impact of e-commerce on the competitive environment within industry

Bullet Point 1

• The impact of e-commerce on the competitive environment within industry
• Asos- Innovative with online shopping, founded in 2000 and since grown to be the leader in its market (17% share)
• Pure play- competitors such as Primark (bricks and mortar) only has a market share of 10.9%
• ASOS have encouraged for competition due to their good customer service and quick returns and delivery.
• - Amazon- biggest online retailer in the Western world- took over and forced HMV into administration in Jan 2013, everyone buying music off pure play Amazon as quicker online and HMV were bricks and mortar.

Bullet point 2

• The impact of e-commerce on business and their functional areas
• Argos- two types of stores based on e-commerce, one type is an online store where you can then go and collect the product your purchased from the store. The second example is a store in which you can go in and browse the products before you purchase them.
• Asda- In July 2014 Asda had a large restructure in which they made 1,360 members of staff redundant, but in turn recruited 5,670 new members of staff. This restructure was due to moving online, and the redundancies were due to those people not being able to reach criteria that was expected of them, Asda invested a lot of money into multi channel and does operate at 300 click and collect points.

Bullet point 3

• The impact of e-commerce on different stake holder groups
• Amazon- now offers same day delivery which is for its prime members, and even 1hour delivery in some postcodes in London for Amazon prime members after this venture was successful in the US.
• Marks and Spencers- in November 2015 Marks and Spencer's online shoppers personal details were leaked to other customers accessing their personal account due to a glitch- This could have lead to many problems for the customers and also could have lead to a loss in popularity for the business, this could have then lead to share prices dropping which would affect shareholders for the business.
• OECD research carried out in 17 EU states between December 2010 and Feb 2011 and revealed that online products are sold at lower prices than those sold offline bringing in a consumer wellfare gain of £2.5 billion.
• Benefits- Increase in choice of suppliers, reduced search, lower prices, 24/7, faster delivery, improved availability, customised products
• Drawbacks- Lack of knowledge on use, Privacy and security, High street shops closed.
• Shareholders-

Bullet point 4

• The extent to which e-commerce offers opportunities and poses threats to businesses
• Tesco- Tesco has had to close down many of its new stores and also had to stop many of its stored being open 24 hours a day, One threat of this to stakeholders is to some employees who were only able to work the late shift for different reasons such as family commitments etc, this means they are no longer able to work for the shop. Other threats come to customers who are no longer able to go and pick up an item they desired late at night, and have to now order online where delivery can take several days. Their online profits will likely grow, however their is a threat to their business as a whole as their USP was being open 24/7 compared to the other "big 4" supermarkets who did not offer this service, their marketing team will have to adjust their approach.
• Uber- Just like netflix is a fast growing pure play business which solely operates online, Uber is the fastest growing multinational business in history. Due to Uber being an online business their rapid growth has been due to that e-commerce, it has been able to use modern technology such as apps and mobile phones.
• However, due to this extreme rapid growth they have caused a massive threat to the original taxi businesses which operated in the cities they have expanded into, such as London, due to the easy accessible method of getting a taxi.
• In the US Uber have a market share of 46% and the use of taxis, limos and shuttle cars has decreased by 85% in the past year.
• Starbucks- $1billion business with 7000000 using online payment method and 100000 downloads of the mobile app which allows for loyalty points through e-commerce.
• There are also oppurtunities for Starbucks through many social media outlets in which they can promote new products etc.
• Starbucks market share in the US is 32.8%.

Bullet point 5

• The factors influencing if, why and hows businesses respond to growth of e-commerce
• ASOS- Known on social media- 3 million on facebook and twitter- main competitor is H&M and Zara
• Asos uses mobile apps, websites and Technology such as Apple Watch, which means more people are able to access the service and order items. They are using e-commerce to grow at a rapid pace with their reigning market share of 17%.
• Factors influencing response- Competition- Competition among-st businesses pushes them to invest into different markets and new ventures such as e-commerce and the ever growing demand for online shopping- eg Tesco invested in e-commerce and ventured into online shopping in 2006 and became the market leader inonline food shopping in supermarkets, slowly other supermarkets Asda and Sainsbury's joined the online market, but Morrison's wanted to remain a store based business and did not invest until 2014, by which time they were too late as Tesco had a market share of 40% and Morrison's had a share of 2%. The online food shopping business is not profitable as they offer delivery for £1-£5 when in actual fact the cost of delivery would be around £20 , showing that one of the main reasons businesses invest in e-commerce is based on pressure from competition.
• Suppliers- You need to maintain a strong relationship with suppliers as they are the ones delivering the product or service and if moving and investing in e-commerce is the way of maintaining the relationship then they have to move with them.

Bullet point 6

• The impact of e-commerce on business performance and on strategy, both nationally and internationally
• Businesses are often able to grow internationally due to investments in e-commerce. For example Netflix has grown internationally through investing more and more into e-commerce. Netflix started off as business where you would order films and they would post them to you but in the past decade they have expanded from this service operating in the USA to moving to Europe and South America, they did this by investing in new technology which hadn't been used before. They then became the market leader for the market.