Developing Business Plan for E-Link - Essay Example

E-Business Table of Contents Introduction 3 Industry and Business Environment Context 4 PESTLE Analysis 5 Porter’s Five Force Analysis 7 Potential Threats and Opportunities Relative to Competitors 9 Value Proposition 9 E-Business Strategy 10 Target Customers 10 Potential Suppliers 11 Revenue Steams 12 Potential Cost 12 E-Marketing Plan 13 Potential Risks and Downsides 13 Threats 14 Weaknesses 14 Works Cited 15 Introduction Global business environment is becoming highly competitive as several leading organizations are trying to develop and implement unique strategies in the business operation processes in order to gain potential competitive advantages. Now-a-days, several leading multinational and national organizations are trying to capitalize on the potential business operation opportunities that have been developed due to the technological advancement. It is true that demand for online marketing activities is significantly increasing among the target customers. Therefore, leading organizations are trying to adopt and implement online business operation strategies in order to increase core competencies and gain potential competitive advantages in this competitive global business environment. E-Link is the newly developed US based retail organization headquartered in New York. In addition to this, the organization is trying to implement online or e-business strategy in the business operation process. It is true that bricks-and-mortar business industry has become highly competitive and saturated. Therefore, the organization is trying to adopt and implement differentiated business operation strategy in the business process in order to enhance effective business performance. The organization is following e-commerce business model. Electronic goods and gadgets, clothes, fashion accessories, and several important consumer stationary goods are available through the company website of E-Link. The organization will operate within the global retail industry and will follow e-commerce business model. The US economy is recovering from the critical effect of recent financial crisis and global economic recession. This recent economic slowdown affected the economic environment of the United States of America. Limited purchasing power and low disposable income of people are the major consequences of this economic slowdown. Therefore, people of the United States of America are trying to consume high quality products in economic price level in order to back their affected purchasing power. Therefore, several leading multinational organizations are trying to adopt and implement e-business strategy in the business operation processes in order to reduce the business operation cost. Most importantly it helps the organizations to take meet the market demand and needs of target customers. Now-a-days, customers in several global market places try to reduce their traditional consumption time and cost. It is true that the people are getting busy in their daily life due to growing stress and pressure in daily life. Therefore, it is highly important for the E-link to consider these aspects in the business operation process in order to meet the growing market demand. Demand for e-commerce consumption process of retail goods has significantly increased among the target customers. Te essay will develop a business plan for E-Link. It is highly important for the newly developed organizations to prepare an effective business plan that can help the organizations to gain valuable support from several important external stakeholders. In addition to this, this business plan will help the stakeholders to determine the developed strategies by E-Link in the business operation process. E-Link will operate within the US retail market. This retail market is highly competitive and saturated due to the presence of several leading retail chain organizations. Industry and Business Environment Context It is highly important for E-Link to understand the industry and business environment scenario before developing the business plan. Following analytical tools and models will help the organization to determine the business and industry environment. PESTLE Analysis PESTLE Analysis can be considered as an important macro-environmental strategic analytical tool that helps an organization to determine the impact of several macro environmental factors on the business performance of the organization. Following PESTLE analysis has been conducted with respect to E-Link. Political It has been mentioned earlier that US economic environment is still suffering from the recent financial crisis and global economic recession. US can be considered as politically stable. In addition to this, government of the United States of America is supporting several organizations to develop and implement unique business operation strategies to maximize business profit. There are several reasons behind the support of the government as the organizations significantly generate employment (Canzer 92). It helps the government as well as the country to control the rising unemployment rate. Economical United States of America can be considered as economically developed. It is true that the recent financial crisis and global economic recession affected the economic environment of the country. Therefore, people are trying to reduce their consumption process due to limited purchasing power. It is true that several organizations are trying to reduce business operation cost in order to implement competitive pricing strategy to offer products at economic price level to the target customers (Kalakota 67). Therefore it is important for E-Link to consider effective pricing strategy in order to maintain effective business performance in this inadequate economic environment. Social Social demand for online marketing activities is significantly increasing among the people of the United States of America. It has been mentioned earlier that people of the United States of America are avoiding traditional consumption process by buying products from the Bricks-and-mortars stores or outlets (Pride 135). Actually, people are getting busy in their daily life. Therefore, they are trying to reduce their consumption time and cost by consuming products through online. Therefore, it can be sated that the social environment is becoming favorable for E-Link. Technological United States of America can be considered as technologically advanced. The government of the United States of America always tries to ensure technological growth of the country. Several leading multinational organizations and domestic organizations can get appropriate technological resources so that the organizations can gain effective potential competitive advantages. Therefore, it is clear from above discussion that E-Link can avail effective technological resources in the United States of America. Environmental Government of the United States of America has developed several environmental policies for the business organizations in order to maintain sustainability in the society, economy and environment. It is true that, several organizations used to consume high amount of fossil fuel in the logistics and supply chain processes. High consumption of fossil fuel can increase the carbon emission level. It actually affects the balance of the environment. Therefore, the government has developed environmental regulatory policies for the business organizations in order to maintain effective environmental sustainability. Legal Organizations in US have to maintain several developed regulatory and policies developed by the government t in order to run business operations quite smoothly. It is true that business organizations have to maintain several developed employment policies, labor policies, wage distribution policies and environmental policies to maintain sustainability in the business organizations (Sharman 82). Therefore, it is true that E-Link has to follow each and every developed policy by the government to overcome several possible issues. Porter’s Five Force Analysis Porter’s five force model can be considered as one of the important strategic analytical tools that help an organization to determine the impact of several external environmental factors on the business performance of the organizations. Following porter’s five force analysis has been conducted with respect to E-Link. Buyer’s Bargaining Power It has been mentioned earlier that the economy of United States of America still has not fully recovered from the effect of the global economic recession and financial crisis. People in United States of America generally try to consume high quality products in economic price level. Moreover, the US customers are trying to ensure limited consumption activities due to busy daily life schedule. In addition to this, e-business retail industry is becoming highly competitive and saturated due to the presence of several organizations. Looking into these above aspects, it can be stated that the bargaining power of the buyers is quite high for E-Link. Supplier’s Bargaining Power Availability of effective suppliers is quite high in the US retail industry. Effective availability of the suppliers can help the organizations within the E-Business retail industry to face limited threat of suppliers bargaining power due to intense competition among the suppliers. Therefore, it can be stated that the supplier’s bargaining power is quite low for E-Link (Palmer 3). Threat of New Entrants It has been mentioned earlier that US retail industry is highly competitive and saturated. In addition to this, the newly developed organizations have to face several legal entry barriers as the government of The United States of America has developed several strict policies for the organizations. Moreover, the organizations require huge capital to enter in the competitive e-business retail industry. Therefore, it can be stated that threat of new entrants is low for E-Link. Threat of Substitutes US retail industry is highly competitive. Bricks-and-Mortar retail chain stores can be considered as the major substitutes of e-business retail organizations. Wal-Mart, Sainsbury, Nordstrom are the major substitutes of e-business retail organizations (Lee 81). These substitutes pose real threat to the e-retail organizations. Looking into the growth, demand and market share of the substitutes, it can be stated that the threat of new entrants is quite high for E-link. Degree of Industry Rivalry US e-business retail industry is becoming highly competitive as the popularity and demand for several organizations, such as e-bay, Amazon, Jabong and Flipkart can be considered as the major competitors of E-link. These organizations already have developed a potential client base in US. Looking into these aspects, it can be stated that the degree of industry rivalry is quite high for E–Link. Potential Threats and Opportunities Relative to Competitors Growing demand for bricks-and-mortar stores, intense market competition and distressed economic environment can be considered as the real threat for the organization. On the other hand, adoption of competitive pricing and differentiation strategy in the business operation processes can be considered as the real opportunity for the organization. Value Proposition E-Link will follow e-commerce business operation strategies. In addition to this, the organization will operate within the retail industry. The organization will offer high quality differentiated products to the target customers in order to gain potential customer loyalty. The organization will adopt and implement porter’s generic strategy in the business operation process in order to gain potential competitive advantage in this competitive business environment. The organization will implement both cost leadership and differentiation strategy to offer differentiated products in economic price level to the target customers (Currie 342). The organization will adopt just-in-time approach in the supply chain management process. In addition to this, the organization will ensure low supply chain lead time and low inventory turnover in order to reduce overall business operation cost. In addition to this, the organization will source high quality differentiated products from the effective suppliers to maintain the quality and variety aspects of the product range. These strategies will help the organizations to maintain effective relationship with the target customers. It is quite sure that the target customers will try to consume products from E-Link to gain high quality products from the organizations in low price level. In addition to this, it can help the customers to gain products through minimum consumption efforts (Napier 432). Therefore, it can be stated that the organization can gain potential competitive advantages. In addition to this, the organization can develop potential client base by providing high quality products and services to the target customers comparing to other competitors. E-Business Strategy It is highly important for E-Link to develop effective business operation strategies in the business operation processes in order to grab the market share of the leading organizations within the industry. Therefore, it is important for E-Link to consider effective strategy development process in order to ensure effective business performances. Target Customers E-Link basically sells all types of goods starting from consumer goods, books, digital cameras, mobile phones, laptops, clothing, watches and other different types of products at competitive prices. The target customers of the company comprise businessmen, college persons, school going kids, executives and also the middle age group persons. It has grown at a rapid pace after the introduction of many innovative features like cash on delivery, replacement guarantee within 30 days. It has also launched a delivery network of its own which has helped the company to grow tremendously in the recent years. It target group of customers fall in the age group of 12 to 45. It follows a marketing strategy which divides the target market into various subsets of customers who share common priorities and needs. It then designs and implement strategies to target them. Its market segmentation includes geographic segmentation, segmentation according to occasions, behavioral segmentation and segmentation according to benefits. Geographic segmentation includes segmenting the customers according to their states, nations, regions, cities, countries and neighborhoods. Behavioral segmentation classifies the consumers according to their attitude, knowledge and response or usage rate for a product. Segmentation according to occasion classifies customers according to the preferences and desires of the customers that they have on various occasions. Potential Suppliers It is important for an e-business retail organization to find and effective relationship with the existing potential suppliers. First of all, it is highly important E-Link to develop effective corporate values and valuable business operation policies in order to maintain sustainability in the business operation process. Supply chain management practices can be considered as important activities for the organizations. Therefore, it is highly essential for the organization to ensure effective supply chain management practices. First of all, it is the responsibility of the operation management department to find effective suppliers who can source and supply effective and high quality raw materials and resources. The management of the organization has to develop a strong relationship with the suppliers so that the organization can source high quality product and resources from the suppliers in low cost (Burn 10). It is highly important for the organization to ensure low inventory turnover and supply chain lead time. It can help both the suppliers and organizations. First of all, it can help the organizations to maintain efficiency across the supply chain network. On the other hand, it can help the suppliers to increase their business transactions that can enhance suppliers’ profitability. Revenue Steams The organization will implement transaction fee revenue model. It will help E-link to sell products at profitable rate. According to this, revenue model, E-Link can receive commission depending upon the volume for executing or enabling the transactions. In addition to this, the organization can earn profit through transaction fees as the profit will be generated by the consumers paying the processing fee for a particular transaction to a specific operator of a particular platform. Potential Cost It is highly important for the management of E-Link to consider the potential cost aspect before starting up the business. The organization cannot earn profit without the consideration of potential business operation cost. There are several potential start-up costs that E-link has to bear. It is important to develop an effective webpage and develop an attractive and efficient online platform through which the organization can attract potential target customers. On the other hand, it is highly important for the organizations to consider effective cyber security in order to ensure the customers safe and secure online transaction process. Last but not the least; it is highly important for E-Link to develop a potential and widespread supply chain network (Liddle 24). It will help the organization to source high quality products and resources in low price level to ensure the offering of high quality and differentiated products to the target customers. E-Marketing Plan It has been discussed earlier that the e-business retail industry is becoming highly competitive as several leading organizations are operating within this industry. In addition to this, these organizations are constantly implementing unique strategies in the business operation processes in order to ensure potential competitive advantages. Therefore, it is highly important for E-Link to focus on effective service marketing mix strategy. First of all, it is highly important for the organization to ensure unique, and both cost and time effective business operation processes to create a benchmark within the industry for several competitors. It will help the organizations to enhance high brand recall in the mind of the target customers. People and physical evidence also can be considered as important aspects for the e-marketing plan. It is important to develop customer and employee centric business operation strategies as people are the major business growth drivers for the organizations. Last but not the least; it is highly important for the organizations to focus on effective promotional strategies in order to create significant awareness among the target customers. Digital media and online social media promotional strategies can become important source of brand awareness in the mind of the target customers. Therefore, it is highly important for E-Link to consider above mentioned aspects in the business operation process in order to increase core competencies and develop potential client base. Potential Risks and Downsides It is clear from above discussion that US e-business retail industry is highly competitive as well as potential. Therefore, it is highly important for the organizations to consider possible threats and weaknesses of E-Link. Following threats and weaknesses have been provided below to help the organization to develop effective business operation strategies so that the organization can overcome the threats and weaknesses. Threats Intense market competition can be considered as one of the major threats for E-Link. On the other hand, strong market share of substitute players can make it difficult for E-Link to maximize business profit from initial stage. It is true that the economy is still suffering from several issues, such as high unemployment rate and job cut, low GDP growth rate, recent global recession and financial crisis, low disposable income of people and limited purchasing power of people. These are also can be considered as critical threat factors for organizations. Last but not the least; it is highly important for the organization to follow the rules and legislations developed by government to overcome possible future threats. Weaknesses Inadequate brand awareness and poor market reach can be considered as major weaknesses of E-Link. In addition to this, insufficient business capital and lack of strong relationship with several important external and internal stakeholders also can be considered as other major weaknesses that needed to be solved out. Works Cited Burn, Janice. E-business strategies for Virtual Organizations. London: Routledge, 2007. Print. Canzer, Brahm. E-Business. Stamford: Cengage Learning, 2006. Print. Currie, Wendy. Value creation from E-Business Models. New York: Springer, 2008. Print. Kalakota, Ravi. E-Business 2.0. New Jersey: Pearson, 2004. Print. Lee, In. Transformations in E-business Technologies and Commerce. New York: Springer, 2011. Print. Liddle, Stephen. Conceptual Modeling for E-Business and the Web. New York: Springer, 2010. Print. Napier, Albert. Creating a Winning E-Business. Stamford: Cengage Learning, 2005. Print. Palmer, Daniel. Ethical issues in E-Business. London: Sage, 2010. Print. Pride, William. Student achievement Series. Stamford: Cengage Learning, 2008. Print. Sharman, Raj. Exploring the Grand Challenge for Next generation. New York: Springer, 2011. Print. Read More