E-Commerce - Proposed business to make available to the public, quality racquets at affordable prices.
E-Commerce
Introduction
This proposed business plan is for a business wanting to sell squash racquets to the public. The owner of the company is a Mr Derick Maxwell who is an international squash player based in Huddersfield town. Mr Maxwell has been playing competitive squash for over 15 years and feels that there is a hole in the market for players to purchase quality racquets and so has decided to set up his own online store to cater for this shortfall in the current market. Over the years, Mr Maxwell has established a vast resource of international contacts from which he can purchase quality racquets at reasonably cheap prices he, is also sponsored by 'Prince' a leading squash racquet manufacturer.
Aims & Objectives
The main aim of Mr Maxwell's proposed business is to make available to the public, quality racquets at affordable prices. The racquets that will be on offer will be from well-established manufacturers providing extra re-assurance to his customers that the products they purchase are indeed from reputable firms.
As like all businesses the underlying theme of this proposed business will be to make a profit. An added facility is offered to allow the customer (at a small extra cost) to have their racquet re-strung to their desired tension, string colour and selected logo'S designed on the strings. Mr Maxwell aims to achieve the ability to offer a reliable and friendly service with delivery time in 5 working days. A resource that could be exploited is the facility to supply racquets to local and possibly national squash clubs around Huddersfield and the UK.
Market Assessment
With the current competition being from high street stores, the main advantage is that the high street stores can only offer racquets of limited quality and cannot afford to purchase and sell one off special racquet requests. The racquets offered by the high street stores are expensive for their quality and so, there are plans to have a section for cheap racquets and free squash balls to encourage new players to take up the sport without it costing them too much.
The main competitors online will include sites like www.all-products.com and www.racket-sport.com, both these sites offer a range of squash racquets, however lack in the area of providing an added option of personalised stringing facility. The target market audience will predominately be semi-professional and professional players who may be considered to be as described by "Peter Ruxwell theory of shopper categories" as 'social' or 'value hunting' shoppers. These shoppers will be attracted to the site due to its competitive prices and interesting information supplied about the sport in general. With the growing awareness of keeping fit and exercising regularly, introducing an e-commerce site of this nature may help the general public to take part in new exercising ventures. The timing of the New Year may also be a hype that may lead potential customers to take up a new sport as part of a new years resolution, this could lead to an increase in sales.
Many websites like the ones mentioned above that do actually sell squash racquets on-line, don't have much details regarding the game and so Mr Maxwell proposes to have a section dedicated to explaining the rules and laws of the game for beginners as well as helpful hints and tips to allow beginners to get into good habits from the start. With the added feature of interesting information on the website, this will hopefully attract more potential customers.
Given that there is not such a high demand for purchasing squash racquets online, the range of racquets that will ...
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Many websites like the ones mentioned above that do actually sell squash racquets on-line, don't have much details regarding the game and so Mr Maxwell proposes to have a section dedicated to explaining the rules and laws of the game for beginners as well as helpful hints and tips to allow beginners to get into good habits from the start. With the added feature of interesting information on the website, this will hopefully attract more potential customers.
Given that there is not such a high demand for purchasing squash racquets online, the range of racquets that will be available may change the views of the avid and professional squash players that the business is aimed at. However the disadvantage of setting up an e business like this one is the lack of experience of using PHP and facilities to design web pages but the possible compensation will lie in the pricing of the racquets on offer.
STRENGTHS
Cheap, reliable, quick and friendly service.
Strong contacts abroad and well-respected racquet manufacturers.
Good market knowledge - experienced player aware of good products.
WEAKNESSES
No skills in PHP to develop e-commerce web site.
Finding the correct suitable business model.
Not reaching the target customers.
OPPORTUNITIES
To sell products to local and national squash clubs.
To exploit the specialised market arena.
Better appeals to the professional industry.
THREATS
Possible new competition.
New idea thus high risk of failure due to lack of experience.
Existing competition, high street stores.
Lack of product sales.
Benefits Costs & Risks
The main reason for going on-line is to reach a wider audience in order to sell more products. Once the business would have sold a few racquets, customers may spread the news by word-of-mouth and possibly increase sales, however there is always the risk of no-one purchasing the products and so taking care of all customers and potential customers by offering a friendly service will be of utmost importance.
The benefits of having a professional looking site as well as information regarding the sport will attract more customers and by attracting more customers there is an increased chance of increasing sales. There are no other e-businesses currently offering a personal re-stringing facility this, for the professional players may be a key factor when purchasing their subsequent racquets. The cost of the restringing facility will be minimal, as Mr Maxwell already owns a restringing machine that he purchased for himself a few years ago for international play, hence the only cost that will be incurred is the cost of the different type of string.
With the ability for Mr Maxwell to buy in bulk, the costs are kept down for importing from around the world and being an official sponsor for 'Prince' allows Mr Maxwell to set up a legally supported outlet for their products by purchasing racquets at reasonable prices direct from the manufacturer.
The risk may remain of not reaching the target audience and if this happens then the business will obviously suffer, in order to minimise the risk of this happening the website should be well linked to search engines. The security factor also needs to be addressed before going on-line as data is being continuously exchanged, it will be necessary to provide a safe environment for the customers to input their data and ensure any information provided by them cannot be intercepted and used by any third party.
Credit card fraud is the biggest risk for e-businesses like this one, while all businesses accepting credit cards face this, there is an increased risk when it comes to Internet based companies, as a proof of signature for authorisation cannot be obtained. Other risks may include the ease of use of the e-shop as if the customer cannot find what they are looking for in a reasonable number of clicks then they may be lost. The key to overcoming this problem is to have a good navigation system and the ability to maintain the look and feel of consistency throughout the website.
The speed at which the page loads up may also be an aspect of interest as if the web page takes too long to load the site may become annoying for the customer causing them to leave, also another point that should be noted is that it is important to gain the trust of the customer and this can only be don't by producing a professional looking website and allowing the customer an easy facility to make contact with the business if needed.
Business Model
The basis of the business model is to show the various participants related to the business and their roles along with a description of potential benefits for using these participants. The main overall business environment that could be used to describe this business is a B2C (business to customer) as explained by Turban.
"Business-to-consumer (B2C) - E-tailing
(Include retail transactions with individual shoppers)"
However it is not quite so simple, as this business, will be purchasing the products from another businesses in order to supply their customer and so it could be argued that a Turban's B2B (business to business) model could be adapted.
"Business-to-business (B2B) -
(All participants are businesses or other organisations)"
The truth is that the business operational environment to be adopted is a combination of both described above, as it is in fact a type of mail-order business model.
"The mail-order model is typified by enterprises such as Amazon.com where a Web site shop front is employed to sell physical goods, which are then posted or delivered."
Bambury, P (1998) A Taxonomy of Internet Commerce.
Another example of a mail order enterprise is something like www.eastbay.com where the website is used as a shop front and the products are posted or delivered. Relating this type of business model to this business may seem to be simplified but in effect the participants of the business are the overseas contacts and the customers and the customers orders are processed then posted out or delivered to them.
The "sell, buy, fulfil" concept of e-commerce trading portrayed by Timmers will be the backbone of the company's selling strategy as this cuts down on costs involved in storing excess stock and there will be no cost of running a physical store.
Week7 Lecture Notes
Timmers business models
Value Chain
It is also important for a business to be constantly aware of its position in the e-market and this can he helped by relating to Michael Porters value chain.
Michael Porter's value chain (1985)
A typical value chain analysis can be performed in the following steps:
. Analysis of own value chain - which costs are related to every single activity, in this business the cost of purchasing from abroad, shipping costs to get products back to the UK.
2. Analysis of customer's value chains - how does our product fit into their value chain? Profits made will be a direct result of the sales made.
3. Identification of potential cost advantages in comparison with competitors
4. Identification of potential value added for the customer - how can our product add value to the customer's value chain (e.g. lower costs or higher performance) - where does the customer see such potential?
Issues & Constraints
The main issue of concern is to be able to reach the target customers fast and effectively, this may not be as simple as first thought to be although linking the web site well to search engines actual physical posters may need to be printed and strategically places around sporting facilities to reach the target audience more effectively.
As there is a growing amount of awareness in the uk today regarding personal health aspects and the fact that more people are encouraged by the governments to take up new sports, this business will be a simple solution to encourage customers to start playing and purchase cheap squash racquets to allow themselves to become more healthier.
To allow issues of constraints to be assessed the best method to use for analysis is the PESTL analysis to determine the wider implications of going online. The PESTL analysis is a framework of strategic analysis, which assesses effects of possible changes in the environment of an organization. The main purpose of the PESTAL analysis is to assess the external factors that may influence the business
The points covered by a PEST analysis consists of: -
. Political Factors: Government stability, the overseas contacts used to purchase the desired products. Taxation, if there is an increase in taxes the prices will be directly effected.
2. Economical Factors: The state of the national economy will affect the purchasing price of racquets from abroad. The effects of different business cycles may result in seasonal trends affecting the sporting industry.
3. Sociological Factors: Concepts of income distribution affecting the ability for everyone to purchase top of the range racquets.
4. Technological Factors: The processes of making racquets available quickly and transferring them across the world.
5. Legal Factors: The current employment state of overseas factories and exporting custom laws, may affect the availability of possible shipping times.
Technology To Be Used
There are many solutions of designing an e-shop such as:
* DIY with Authoring Tools
* Web developer
* Flat packs
* Flat pack ASP
* Fulfilment House
The creation of the website must be of the utmost quality to ensure customers feel safe in browsing the selected products and purchasing the products on offer. This shall be done by designing the website with simple to navigate yet professional looking introductive homepage and subsequent linked web pages. A possible proposition would be something like designing the website using Macromedia Flash or Dreamweaver package linked with PHP.
Making the ordering process easy for our clients will a key factor and this will be done by using cookies and shopping carts, so the user doesn't need to do any calculations. Reducing redundant information by using cookies again will ensures that the user will not need to fill in the same information more than once. The facility of sending a conformation e-mail to the customer will also be provided as a form of receipt to officially confirm to the customers that we have received their order and confirm exactly what they have purchased.
Using an offline storefront involves installing software on the computer infrastructure then published on the service provider's end. The advantage is that the developer retains control and speed issues are resolved to the most part. Disadvantage is the lack of software portability and/or installation, and upgrades of systems are likely.
Bibliography
Web sites visited: -
http://www.firstmonday.dk/issues/issue3_10/bambury/index.html
http://ecommerce.internet.com/how/tk/article/0,,10366_569741,00.html
http://www.allprodusts.com
http://ecommerce.internet.com/news/insights/outlook/article/010535_125521,00.htmlhttp://www.racket-sport.om
http://digitalenterprise.org/models/models.html
http://www.easybay.com
www.sbaer.uca.edu/Research/2001/ACME/45acme01.htm
www.swan.ac.uk/ebms/modules/ebc315.htm
http://www.digitalenterprise.org/models/models.html
Books Used
Johnson & Scholes Exploring Corporate Strategy. ISBN: 0130807397
E-Commerce CHI 2565
