Identify the way in which the site seeks to trade and the customer base that it is attempting to attract. Does this site provide an example of disintermediation etc: give your reasons?
This is a direct mail company website; the site greatly adds value for the customer. The customers can directly order online or request a free catalogue to view items in a printed format to be delivered free of charge with in 48 hours all over UK. They also have various forms of payment options available, like instant payments using bank cards, interest free credit up to 2 years or interest credit of up to 5 years. They are trying to bring new customers offering £15 discounts on first orders. Customer data security is also taken into account, as 128 bit encryption is in use.
The prime target of the website is young men and women aged 18-35 (someone familiar with the brand) in the UK. Apart from offering branded clothes for all ages (0 to 45), they also provide a huge variety of electronics, footwear, appliances, toys, game consoles, jewellery, cosmetics, home wares, travel items, accessories, gift experiences, insurance and credit card for other people in the community. Every person in the UK can benefit from this website as an online credit provider and it is available 24/7. As it would seem, the main reason they provide credit options is that more middle class and lower middle class would be able to afford buying them instantly from their website. They are also trying to enhance brand recognition by introducing a credit card, discounts on new orders & a one-stop shop.
Well they have their own warehouses, people order items through their website and they deliver it to them. They are directly connecting with the consumer; so there is no further intermediation. But as this is a retailer website they buy items from manufacturer and sell it to customers, thus this is already an intermediate company. Example: they are buying items from a manufacturer like diesel, Toshiba and then selling it to buyers.
Identify the business model/s that you consider to be utilized on this site and justify your identification.
www.Littlewoods.co.uk is an online retailer; it utilizes two forms of Business models: Infomediary, merchant, advertising and manufacturer model. No other site advertises about Littlewoods on their site thus they do not have an affiliate model either.
Infomediary (Registration Model): Since its provides financial services to customers online, therefore customers have to register their details, which might be used for marketing and research purposes; for example they might want to know what age group of people visit the site, what they buy the most, site usage patterns and identifying a market. They offer incentives to bring in more customers. They might also pass this data to a third party in exchange for products or services.
Merchant (Catalogue Model): the website is of an online e-tailer or a catalogue merchant. The customers can view their products online or order a free catalogue to see items in a printed format, and then order online or by filling in a form or by contacting the sales line. They provide product information and have an online ordering mechanism. Users add items to their baskets and then pay for their items. The prices are fixed; it is the same as traditional Bricks & Mortar, difference being real and virtual. They can sell directly without the need of wholesalers or retailers.
Advertising: They provide all sorts of financial services, along with that they also advertise other products from different companies like RAC, car insurers, AXA pet insurance etc under their money matters section.
Manufacturer: They not only provide loan or credit to buy their items, but they are also offering credit card, insurance and of their own brand. This shows that although they are intermediates they are still trying to remove the intermediary for their own products.
Analyse how important you consider it that anyone trading on the net has an understanding of the business model/s that they may be using, and the ways in which their website adds business value.
It is very important for a firm to know their business model and the website adding business value. Business model is a method of doing business so that a firm can sustain itself, add business value and generate revenue. A firm’s Internet business model provides it an opportunity to gain competitive advantage in the market place enabling it to earn higher revenue than competitors do on the internet. They allow a firm to answer questions like, what value should be provided to the customer? What should be the price of the product? What market to target? Who to attract? Thus answering these questions allows businesses to develop strategies on long term planning of how to earn money. Previously many companies (incumbents) when e-commerce started, without deciding what they wanted to do on the internet, invested millions of pounds developing websites; this led to a huge disaster.
A business value is defined as attaining a position in the economy, which cannot be always measured in monetary terms. Business value is measured in terms of customer satisfaction, revenue, brand recognition, trust and relationship duration. Now let us look at, how internet Business models affect business value.
For example, not all firms enter the web to earn direct revenue, some sites which have chosen advertising models who advertise other company websites also earn money, they are not selling anything but providing some free content for the users which make them come back. The companies pay the advertisers for every click through the user makes on the advertisement. Intel has developed their website, providing support to its customers, now they do not sell on the internet then why did they develop a website. They did to deliver customer satisfaction and add value to their business. A survey conducted by an independent newspaper showed that 67% of people do internet retailing in the UK. The first point of contact for any company now is online. This means that a Bricks & Mortar retailer has to enter the web in order for it to stay in business. In addition, there are hundreds of other retailers on the web, and if they have a better business model and strategy. The fittest companies having good internet business models and strategy are most likely to survive, get more customers and thus add values to their businesses. If the base and planning is steady then making changes to the businesses will not be a difficult task. We will discuss this further in the next question.
In your opinion how important is flexibility on the part of the individual entrepreneur/company from the perspective of keeping the e-business trading
Effective brand management entails preparing a solid relationship with the customer, this is often shaped on the net. Internet can be constructing as well as destructing for an organisation, users are turning towards forums & discussions, where customers share their experiences on buying products from a particular site.
Companies need to be highly flexible to take advantage of the new opportunity and competitive challenges offered by e-commerce. Change is the need. Organisation can use the web to monitor competitor websites and respond to brand messages quickly. There are strategies to attain sustainability of a business. These are Block, run or team up strategy. In the block strategy, a firm creates barriers (patents, copyrights) around its product market space, run strategy, innovate new technology & team up strategy, form up alliances with others to share resources. The world of technology is evolving with new technology invented everyday, companies must change their strategies and business models according to the needs and opportunity.
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