In this assignment I'll be explaining the competitive pressures on two businesses to develop their use of e-business.
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bilal-mohammedhotmailcouk (student)
Introduction
In this assignment I'll be explaining the competitive pressures on two businesses to develop their use of e-business. Secondly I'll be explaining how two businesses have responded to competitive pressures to develop their use of e-business. Lastly I'll be evaluating how successful my selected business has been in preparing for the growing use of e-business.
The Five P’s
Competitive Pressure faced while developing the use of e-business (ASDA)
Actions taken by the business to respond to these competitive pressures
Product
The competitive pressure ASDA is facing is pricing of products. They need to make sure their prices are much more reasonable than competitors such as Tesco. If Tesco are selling their products at low prices, ASDA will need to either have a similar price, or go cheaper or offer a good promotion with the product such a ‘buy one get one free’. This will enable ASDA to gain more customers. Not only do they face the pressure of changing their prices but also updating their product. If Tesco introduces a new item on the market ASDA will have to counterattack by doing the same and doing it better.
ASDA have taken action by lowering all their products prices, and compared to Tesco they have over 1000 more items cheaper at ASDA than Tesco. This gives them the advantage of gaining more customers to shop with them as the pricing at ASDA is more appealing. A also sells items of clothing such as school which engages more parents to shop with them. This also means that not only are they competing with other brands in the ‘Supermarket field’ but also mainstream shops from the ‘clothing market.’ This shows that ASDA are making excellent strategic decisions and are staying ahead of the markets.
Place/Physical Evidence
The pressure ASDA faces when operating online is drawing the customer’s attention onto their homepage by making it as attractive and appealing as they can. They need to be able to grabs the attention of the public before close competitors like Tesco. If ASDA’s homepage is more visually appealing than Tesco’s people will want to use their site. The information on the homepage must be relevant and accurate as customers tend to get annoyed at false information.
The way ASDA has taken action is by promoting special offers and deals on the homepage of ASDA’s website. This means that as soon as a customer visits the site their attention will be captured by the bold graphics and promotion on the page. This will make the customer curious on what else is on offer. In addition the information written on the site 100% accurate as if you were to go in store, the products will be the same price. This builds a good relationship with the customers’, as ASDA is not deceiving them.
Price
The pricing of the products is key for ASDA making profit. If the pricing is not appealing to the customers it is more likely that the public will turn their nose at them and go to a better store with the pricing they find reasonable. If ASDA was to have higher price on a certain product and it was cheaper in Tesco the customer will automatically but it from their as it is worth their money. ASDA will need to compare their prices with competing stores and make strategic decision on how to better their pricing without losing profit.
The way ASDA have taken action is by not only lower their prices but they have also added more deals and offers than competing stores. For example the 250ml shampoo head shoulders are sold at Tesco for £1.99 however in ASDA the 450 ml is sold for £2.99. Although it is more expensive the value of it is more worth it as you are getting more for your money. In addition there are a lot of buy one get one free product and ASDA made products that appeal to the customers. Their prices are very hard to compete with which means stores like Tesco will have to work harder on their pricing and ASDA can just take the time to think of strategic plans on how to get gain more customers. This shows that they are always one step ahead of the market.
People
ASDA faces the pressure of delivering excellent customers service. As ASDA has a lot of products similar to Tesco both companies will be competing for customers. This can be done through here customer service. When a customer goes into any of these online supermarket websites they will always compare the prices of each product through different websites such as ‘my supermarket’. So as a result of this ASDA provides better customers service than Tesco because ASDA always respond to the customers through social media and their website. the consumers will want to shop again online ...
This is a preview of the whole essay
People
ASDA faces the pressure of delivering excellent customers service. As ASDA has a lot of products similar to Tesco both companies will be competing for customers. This can be done through here customer service. When a customer goes into any of these online supermarket websites they will always compare the prices of each product through different websites such as ‘my supermarket’. So as a result of this ASDA provides better customers service than Tesco because ASDA always respond to the customers through social media and their website. the consumers will want to shop again online due to the online experience and also the friendly service and customer service.
ASDA has taken action by being friendly towards their customers. They are always willing to help and resolve any enquiries customers have. They greet their customers politely and are willing to help them with any questions which are often online. By doing all this they are providing the customer will outstanding customer service, as a result this build strong customer relationship with them. In addition not only are they friendly are helpful towards their customers they also look after their staffs well. This creates a peace and good working environment. Customers will enjoy the online experience and not feel uncomfortable to purchase fresh product online due to the good reviews on the online website. Furthermore ASDA have social media sites online to reach to customers about their enquiries or feedback which can help ASDA to help the customer and improve within each business around the UK.
Promotion
Every online business has some sort of promotion, especially big businesses who compete with each other online; in this case ASDA faces a lot of pressure from neighboring online businesses such as Tesco with their promotion strategy. When promoting a new product this can be pressure-rising to ASDA. This is because If ASDA has a new promotion technique; they will face the pressure even more if Tesco are promoting the same technique as them. This means they will need to think of a strategic idea of how to grab the public's attention before Tesco and how to lock on to them for a longer period of time to keep the loyal customers with ASDA.
ASDA has responded to this competitive pressure action by promoting their online products by giving out free deliveries on orders over £25, and this has had a massive impact on the ASDA’s online business base which has increased many customers and majority of them are happy with the service. Recently ASDA has promoted their delivery by customers paying £5 per month and they can get their deliveries for free in any time they order during the month, and this can go for 12 months.
The Five P’s
Competitive Pressure faced while developing the use of e-business (New Look)
Actions taken by the business to respond to these competitive pressures
Product
New look is a fashion/ clothing based organization. They face the pressure of having more fashionable and appealing clothes than stores like Primark and forever 21. New look will have to try and provide better quality clothes that are in style.
New look have taken action by making their clothes look fashionable and stylish. They meet the goal of aiming for their target audience. The clothes they sell are trendy and look appealing therefore customers will happily go and purchase from them. In addition the items online look exactly the same the ones in store so buyers will know for sure what they are purchasing.
Place/Physical Evidence
New look face the pressure of making their online site look appealing. As new look is a fashion website they must also create a website that proves to the audience that they are indeed fashionable. The way they present their homepage will give the audience an insight what they expect to see. For example on their homage they may have a good looking model dressed nicely in New look clothing and as result the customers may be visually captured by and then check out the whole online site.
New look have taken action by proving to their customers that they know what fashion is. They produce quality pictures of their models and advertise it well on there homepage. Not only does it draw attention from the public but it also shows customers that the models clothing are from a store like New look and is not the typical designer wears that models wear. It will make the customers want to buy the product as it look good on the website
Price
New look need to produce prices that are reasonable and affordable. The face the pressure of creating low prices from competitors such as H&M and Primark. As the clothing sold in these stores are different not only does New look have to capture their audience with the style of the clothing but also with the pricing. New look will feel the pressure of making sure that the prices they put up are enough for them to make a profit however it also needs to be better compared to competing stores.
New look have taken action by making their prices as affordable as they can. Compared to other stores there quality of clothing is worth the money. Although clothing is cheap at Primark the quality of the product is not as good as New look therefore customers will not mind paying an extra £5 knowing that it will last them much longer. In addition they take their customers and target audience into consideration. A lot of young teens like to shop at New look therefore they have made a strategic decision of offering 10% of two students.
People
New look faces the pressure of delivering excellent customers service. As New look has a lot of products similar to Primark both companies will be competing for customers. This can be done through here customer service. When a customer goes into any of these online supermarket websites they will always compare the prices of each product, moreover they would also like to see the review on the online services. So as a result of this New look provides better customers service than Primark because New look always respond to the customers through social media and their website. The consumers will want to shop again online due to the online experience and also the friendly service and customer service.
New look has responded to this action by making sure that their customers are being treated well online by answering the questions with any queries about their product sized, material and shipping. Furthermore New look has responded to this action by employing staff who are IT literate and also have good skills with the interaction of the customers through the online server.
Promotion
New look face the pressure in having new fashion trends, and keeping up to season/date. As New look is about fashion, they must introduce new trends and keep track of latest trends before there out. With close competitors such as Primark, they will face more pressure in introducing new trends before they do. If Primark introduces something new and New look hasn’t, it builds a ton of pressure on them, knowing that they have to counter attack by introducing new trends to overcome their rivals.
New look has responded to this action by introducing new fashion clothing and style online, furthermore they also include the exclusive items on the online store at a reasonable price with free delivery which makes customer want it because it’s original as no other brand has it, secondly the delivery is free worldwide. Therefore competitors such as Primark with have no chance competing with New look as the customers have already viewed the exclusive product and they would want it.
Ultimately ASDA had a plan to take its ASDA Direct and George Clothing business online, so they can increase their profit and turnover. At the time, ASDA did not have the IT infrastructure in place to take its business online, however as the time went passed ASDA has successfully advanced in an online services in 2008, and the plan that ASDA has is to establish an online business that helped ASDA to generate more turnover and profit, reinforce the relationship with existing customers and attract new ones. In addition to this ASDA has successfully established their online presence with millions of customers across the UK purchasing products through the online services which ASDA has provided. In evident to this the ASDA statistics page provides that "Grocery Home Shopping continues to grow with market share now 18.4%", "Click & Collect continues to drive e-commerce growth with more than 20,000 customers per week". Furthermore, with the great results ASDA is gaining from the online market, now they're rapidly developing their online services with more advanced and better services for the customers to access the website, use the site for shopping and different payment methods for the customers to purchase the item with. With the improvement of the online services, one of the features which ASDA has delivered back to the customers is ASDA has also been able to respond to customer demands to shop online and collect in store. The e-commerce supplier implemented a ‘click & collect’ capability for ASDA and today, on average, 60% of online orders are collected in store. The other feature that ASDA has implemented in their website is that they've also added PayPal, which is another type of payment and now it's easier for customers to do payment online without entering their bank details as some customers are worried to give out their bank details. All of this being said, this is how ASDA has become successful by doing the following and now it's still doing good as the internet evolved more people are ordering online, especially in this modern day as it is easy to just order within a minute or so and this is less time consuming.
After all the statistics and improvements I’ve seen with ASDA online services I’d gladly say they are using the internet at the best uses because ASDA has substantially improved greatly since 2008 and onwards until now, they’ve adjusted their online services and made it into another phenomena which customers are happy to use due to the different beneficial reasons. ASDA are taking in account of the online internet skills which other online businesses have such as Amazon, and EBay. Before ASDA never had any advanced online services such as click to collect, but now ASDA has merely improved on that section and it has been a blast with the results it got, now there are 40,000 click and collect deliveries which is a terrific result. Ultimately I’ll say ASDA use the Internet for the best uses to increase their online customer base moreover the main point is to increase their profit and turnover to make ASDA an established online presence.
However there are several factors which ASDA can work on and improve on to make it a better version and stand out against their competitors such as Tesco through the online services. The factors that I’d like to clarify is to offer reassurance about the security of the website and payment as some customers have doubt to enter their information and bank details, therefore ASDA should show some sort of image or symbol of online security check as this can make more customers online to feel confident in shopping with ASDA. Another factor that I’d like to conclude is that ASDA shouldn’t allow shoppers to register before checkout because this will cause a lot of distractions as you will have to enter details and it will spare time, as some shoppers will like to view the items and price of the overall shopping then once they’re happy with the cost, they will register their information after the checkout, so that’s the second factor that ASDA needs to work upon on. The last factor that I’d like ASDA to improve on is to add a forum page for all the reviews of the products and items as this can help new customers with any unsure problems therefore I’d like ASDA to work on creating a forum page on the same website which ASDA can answer questions about anything which regards with the online website products and prices.
Advantage: The biggest advantage of using the Internet for business is its cost effectiveness. Opening and maintaining an online store costs a fraction of the budget required to open a physical shop. Advertising online is less expensive than in traditional media, and it allows business owners to reach a more targeted demographic. Another advantage for ASDA is that they can reach to more customers online because of the big following on social media sites such as Facebook, twitter therefore when they promote an offer or a deal the word can get around on social media sites and it can attract new customers who are willing to try out ASDA and their products, services.
Disadvantage: One of the problems with doing business on the Internet is that it can be expensive to copyright or patent your website ideas, although ASDA is a huge national business however it will cost a lot of money to copyright the business ideas and this will be part of the capital expenditure. Another disadvantage is that ASDA online does the online service for the UK, if ASDA expands into other distant markets in Europe this can increase their sales and recognition across Europe and this will make ASDA much more successful and known.
ASDA has a lot of competitions with competitors such as Tesco and Morrison’s. The competition that ASDA faces with the businesses such as Tesco is the, Price, customers, and many other factors. First of all I’d like to compare the prices of both businesses which are ASDA and Tesco. According to the many reviews and websites it has evidently said that ASDA is much cheaper than Tesco because of the prices of nearly all of the products. For example ASDA sells 550g chicken fillet for £3.57, whereas Tesco sells it for £4.00 and clearly you can tell that ASDA has a cheaper price. The evidence for this is this website http://www.mysupermarket.co.uk/shopping/findproducts.aspx?query=chicken&store=asda, and the evidence for the cheaper products on the whole is this website, http://www.thegrocer.co.uk/home/topics/christmas/asda-christmas-shopping-basket-nearly-10-cheaper-than-tescos/510882.article.
Secondly I’d like to compare the customer base for both of the business, and I’d gladly say that ASDA is doing much better than Tesco with the customer base online because they have more customers by the result of the social media following, in Twitter ASDA has more than 300 thousand followers whereas Tesco has more than 200 thousand followers so there’s a huge difference between customer base online. Furthermore Click & Collect continues to drive e-commerce growth with more than 20,000 customers per week for ASDA which is a terrific result, and this shows that how customers are fonder with ASDA online services.
Print screens and Evidence:
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http://i.guim.co.uk/static/w-620/h--/q-95/sys-images/Guardian/About/General/2013/11/29/1385736595197/Asdas-Twitter-page-reques-009.jpg
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http://your.asda.com/media/BAhbB1sHOgZmIiwyMDE0LzA0LzE3LzE2XzM3XzIwXzM2M19waGlsaWxwcGFfMS5qcGdbCDoGcDoKdGh1bWIiCTU0MHg/phililppa_1.jpg
5) http://www.retailtechnology.co.uk/news/5018/study:-asda-builds-up-e-commerce-success/
This talks about the evolvement of ASDA online business.
6) https://twitter.com/asda
ASDA has more than 300k followers on twitter which they can answer any questions that the customers tend to ask, and this is a good way for ASDA to stay in contact with their online customers and this can build a good relationship between them, as sometimes ASDA give out free deliveries or shopping vouchers.
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by
bilal-mohammedhotmailcouk (student)
