E-COMMERCE

OBJECTIVES

As a person with knowledge of e-commerce, the author has always brought up to his superiors the viability of strategy formation regarding the analysis of this topic and at times fails to understand the reasons or logic behind certain strategic implementations imposed on it.

By delving into this project paper, the author intends to have better insights into how e-commerce is thought up, formulated and then imparted down into the subsidiaries of the company or organization. The author hopes to have an in-depth understanding as to how e-commerce enables companies and organizations to compete effectively and profitably in this era of internationalization where competition is extremely intense.

In order to reinforce the learning objectives, two key focal issues were focused upon, i.e. innovation and diversity. Innovation was discussed with regard to e-commerce where it was renowned for its developmental capabilities to constantly innovate. Diversity came under strategic thinking and formation as the author considered the diverse culture, political climate, economic surroundings, social environment, technological settings, government policies and legal systems in order to better understand the issues being discussed.

 

 

 

HALFSED CASE STUDY

1. As you explored some of the links given in this case, did anything catch your eye? What looked good and what looked bad? Why did it look good or why did it look bad?

 

Positive Points:

• Halfsed Company has products that boast of a very powerful retail. This includes a reputation for value of money, convenience and a wide variety of products


• Halfsed Company’s main competence lies on the use of information technology (IT) to fully support its international logistics system. Therefore, Palm, Inc. can see how their individual products perform even at stores at a glance. IT also supports Halfsed Company’s efficient procurement.


• Halfsed Company is able to deliver good customer care, as the limited amount of work would mean plenty of time to devote to customers.


• Halfsed Company can afford to change direction quickly if its management finds that the company’s marketing strategy is not effective.


• Halfsed Company has little deficits and overheads. Therefore the company can offer good value to customers on a consistent basis.

Negative Points:

• Since Halfsed Company sells products across many sectors, the company lacks the flexibility that some of its more focused competitors possess.


• Halfsed Company operates globally, but its presence is located in only relatively few countries worldwide.


• The company lacks market presence or reputation.


• The production costs of most consumer products have the tendency to fall because of lower manufacturing costs. Manufacturing costs fall because of outsourcing to low-cost regions around the globe. This phenomenon could lead to competition in prices, which in turn would result in the deflation of prices in various ranges. Intense price competition must definitely be considered a threat.


• The latest developments in information technology which could possibly change the markets might challenge the company’s ability to adapt to these changes

2. Describe some of the ways in which electronic selling might differ from that which goes on in a traditional department store.

Sales are an important part of any commercial transaction. The most common approach to personal selling in a traditional department store pertains to a systematic process of continuous yet measurable methods in which the person selling describes his offered products or services in such a way that the buyer will be able to visualize how to benefit from the offered products or services in an economic way. Selling is basically a part of the implementation procedures of marketing.  It often forms a particular grouping within a corporate structure, employing independent specialist operatives known as salesmen (. 2003).

The continued interrogation in order to understand a consumer’s goal as well as the establishment of a set of feasible solutions by conveying the necessary information that convinces a buyer to achieve his goal at a reasonable cost is the main responsibility of the sales person. On the other hand, the main objective of professional sales in a traditional department store is to be able to know the needs and satisfy the wants of consumers effectively, and therefore convert possible customers into actual and reliable ones (, 2002).

On the other hand, electronic selling refers to the paid promotion of goods and services through the Internet. While marketing has the objective to choose markets that have the capacity to purchase a product, electronic selling, on the other hand, is the paid communication through which relevant information about the product is conveyed to potential consumers via the Internet (. 2001).

In a general sense, electronic selling is being utilized to be able to impart to the consumers the availability of a particular product or service online. In a way, electronic selling is also able to provide critical information regarding the product or service through the Internet. When an online selling campaign is achieved effectively, this can lead to an increased demand for the product.

There are commonly three main objectives of electronic selling: (1) conveying relevant information regarding a particular product or service; (2) persuading consumers to purchase the advertised product; and, (3) keep the company under the watchful eyes of the public (. 2002). Most successful electronic selling campaigns usually mix the elements of all three objectives. More often than not, newly established products are supported with informative and persuasive electronic selling ads, while strongly established products utilize institutional and persuasive electronic selling ads.

3. Would using the Internet as a distribution medium be more conducive to selling certain types of products and less conducive to selling others?

 

The diffusion of the Internet has revolutionized the business landscape. The Internet has been instrumental in transforming the value chain from manufacturers to retailers to consumers, creating a new retail distribution channel. Research has investigated the components of e-marketing, notably banner advertisements and consumer information search processes. Marketing on-line services is all about cultivating trust, building relationships and recognizing that the customer defines the rules of engagement.

Since after, the Internet emerged as a tool to advance commercial and leisure activities. New terminology in relation with the internet (i.e. internet commerce, electronic commerce, cyberspace, market place and the virtual organization) has entered the business ad academic communities at rapid rate, and there are strong behavioral indicators that the Internet is becoming a fixture in consumers’ daily lives.

Perhaps one of the most important changes brought by the Internet is its impact on marketing and its ability to be used as an efficient distribution medium. According to  (2001), e-marketing basically consists of the same principles found in conventional marketing (the four Ps: product, price, people, and place). Its advantage over the traditional marketing is that it has the ability to greatly enhance the effectiveness of each one of these components. Cole adds that small businesses and large corporations are jumping on the bandwagon and are investing heavily on research and development on e-marketing, respectively.

However, information problems impede the efficient execution of many transactions in the economy because information is often asymmetrically distributed between buyer and seller. Information asymmetry is heightened further in e-commerce markets, encompassing not only the “usual” problem of private information regarding product attributes but also potential uncertainty about the very identity of one’s trading partner.  Fundamentally, all one needs to enter e-commerce is a website. This lowering of entry barriers is often touted as one of the great promises of e-commerce; ease of entry and exit reduces market power and can bring lower prices. But minimal barriers to entry are not an unequivocal plus. When firms can effectively change identity at a moment’s notice, traditional forms of fraud become easier and entirely new dimensions of fraud appear.

4. What do you think of the features offered by Lands’ End and the “live customer service” options offered by several companies?

 

As part of their positioning strategy to stay connected with their young consumers, the competitors of Halfsed Company have initiated various global advertisements and programs such as the Lands’ End and the “live customer service” options. These options are able to provide information regarding the benefits of these companies’ products. These options aim to further strengthen the positioning of these companies’ brands with the help of the continuous advertisement campaigns

The occurrence of options such as the Lands’ End and the “live customer service” within the economy reflects the growing difficulty in the management of organizations that require the effective use of valuable resources such as money, materials, equipments, and people. And the competitors of Halfsed Company are no exception to these. This is the reason why Lands’ End and the “live customer service” options are being implemented by the competitors of Halfsed Company in order to determine the most effective ways to coordinate these resources through the application of analytical methods derived from fields of studies such as mathematics, science, and engineering (, 2003).

5. What might some of the advantages to Halfsed Inc. be of using the Internet as compared to using its traditional method of distribution? The disadvantages?

 

1) Advantages

The distinctive advantages of Internet selling and distribution for Halsed Company include its capability to change behaviors in a limited span of time as well as its flexibility. It also includes the immediate access to feedback, the persuasive nature of the endeavor, the option of choosing a target audience for the sales person, and its capability to give detailed information.

 2) Disadvantages

The disadvantages of Internet selling and distribution for Halfsed Company include its potential for being abused, which could possibly lead to disputes regarding promotion. Also, Internet selling and distribution may have the tendency to become extremely expensive per exposure, and the gathered information may be different among the sales persons involved. It is a well-known fact that the main objective of Internet selling is to help a consumer achieve his / her goals in a reasonable way. However, this is not always the case. Consumers can easily be persuaded by outside factors to patronize a product or service that normally does not have any interest to them. Some sales people are being commanded by their mother companies to sell to consumers odd products that they don’t necessarily need via the Internet. This anomalous behavior is being supported by incentives of sales personnel to increase their total number of sales, incentives from the companies of service providers to sales personnel to sell their products where other similar products offered by competitors are offered, and the incentive to sell a consumer a product that is in need of being wiped out.

In recent years, the public opinion regarding Internet selling and distribution has become very negative. They view it as a medium that only promotes lies. This is of course contrary to the purpose of Internet selling to encourage the target market to patronize a particular product or service. Nowadays, most Internet selling advertisements are either perceived as merely stating opinions or portraying a product or service in a totally distorted idea away from reality. It is this alarming situation regarding the true objectives of Internet selling that have led to an increase in the responsibilities that companies and advertising firms face (. 2004).

6. Do you recommend that the company pursue selling its jeans on the Internet?

            Yes. The existence of Internet and the continued revolution in the world of Information Technology are certainly positive signs for the blossoming of many new advertising opportunities. For instance, Popup ads and email ads have started to invade the Internet. Most advertising firms have also started to exert efforts to make their advertisements appealing to the public. This is something that Halfsed Company has to take advantage of.

In terms of appropriateness, the option to sell its jeans via the Internet will be able to directly address the current issues mentioned. However, the question remains whether Halfsed Company could be able to implement any of these options, and whether these options can be acceptable to the key stakeholders. Any merger or alliances may also involve the sharing of expertise. This company has traditionally relied on the inside-out approach. It is important to note that any Internet selling transactions would have many implications on the company’s values and culture as well as the resources. The key stakeholders definitely would be concerned with such options and need to be convinced of the positive aspects. Somehow, Halfsed Company will be able to overcome this barrier in managing strategic changes in the process of implementing any of the above mentioned strategic options.

 

 

REFERENCES

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