A CASE STUDY ANALYSIS OF E-COMMERCE STRATEGIES FOR RETAIL BUSINESSES

Business
Research Project

Table of Contents
INTRODUCTION...........................................................................................................................1
CHAPTER 2....................................................................................................................................3
What is E-commerce..............................................................................................................3
E-commerce strategy..............................................................................................................3
Customer Satisfaction and trends...........................................................................................4
Digital technology/ New technology......................................................................................4
Porter’s five forces.................................................................................................................5
Generic strategies...................................................................................................................6
Chapter 3..........................................................................................................................................7
Research Methodology....................................................................................................................7
Research philosophy ..........................................................................................................7
Research approach .................................................................................................................7
Research strategy....................................................................................................................7
Time horizon..........................................................................................................................8
Data collection method...........................................................................................................8
Chapter 4..........................................................................................................................................9
1. Why is e-commerce strategies important to Nestle UK?...................................................9
2 What significant role of e-commerce plays in the life of consumers ?.............................10
3 What are the security and legal concerns of Nestle Company UK associated with e-
commerce?............................................................................................................................11
4 What are the future trends in e-commerce within the country?........................................12
CHAPTER 5..................................................................................................................................13
To understand E- Commerce and its applications in business medium is used to do
commercial ..........................................................................................................................13
To critically evaluate the growth of e-commerce in the retail industry ..............................13
To analyse the impact of e-commerce on productive and profitability................................14
RECOMMENDATION S..............................................................................................................14
CONCLUSION..............................................................................................................................14

LIMITATIONS OF STUDY.........................................................................................................15

Title: A critical study of strategies in e-commerce within the UK (A CASE STUDY OF
NESTLE UK).
INTRODUCTION
Overview of Business
E-Commerce is an activity in which purchasing and selling of different types of products
and services are done through the medium of internet. All these activities are done via electronic
funds transfer, online transaction processing, and inventory management systems. Present report
has been based on, Nestle providing their services in Food processing industry (Nestle focusses
on going direct-to-consumers as ecommerce sales hit 5%. 2019). Company was founded in the
year 1866 as Anglo-Swiss Condensed Milk Company. Nestle offers wide range of products like,
baby food, dairy products, bottled water, per foods etc. Along with this company is taking
advantage E-Commerce websites in order to sell their products and services to customers. In
order to raise its competitiveness in the marketplace E-commerce strategies will benefit company
to grab more market share in a much easier way. In this research, Nestle future strategies in
relation to expanding their area of servicing in E-commerce sector have been discussed. Along
with this, strategic decisions implications of new product development and widespread level of
research development is covered. In addition to this, effective strategies in E-commerce will help
expand their services. Company's senior management planned to formulate research in an
effective way on topic of E-commerce strategies within UK which will benefit in increasing
operational activities in international market.
In this regard, mentioned below there is an aims and objectives for this research. In
addition with this researcher will also be able to aware about company trends, benefits,
challenges and significant role that e-commerce plays.
Research Aim: A Critical Study of Strategies in E-commerce Within the UK (A Case Study of
Nestle UK).
Research Objectives:
 To understand E-commerce and its application in business
 To critically evaluate the growth of e-commerce in the retail industry
 To analyse the impact of e-commerce in the retail industry
Research Question
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 Does e-commerce have an impact on retail organisations?
 Does e-commerce improve E-Commerce competitive positioning of organisations?
 What significant role of e-commerce plays in the life of consumers?
 What are the security and legal concerns of Nestle Company UK associated with e-
commerce?
 What are the future trends in e-commerce within the country?
CHAPTER 2
LITERATURE REVIEW
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What is E-commerce
According to Andrew Bloomenthal, e-commerce is referred to as electronic or internet
commerce, it comprises of buying and selling of services or goods via usage of internet and
transfer of money to accomplish these transactions (Electronic commerce, 2019). Basically, it
can be described as commercial transactions which are facilitated via internet (Chiu and et. al,
2014). Nestle has established direct channels of communication with their customers to offer
enhanced services, communication and ability by which they can buy services directly (Flick,
2015). E-commerce is fastest growth area and sales of Nestle have grown by around 34%. As per
Nestle around 57% which can be tracked comprises of highest market share in online rather than
offline (Nestle focusses on going direct-to-consumers as e-commerce sales hit 5%, 2019). This
figure states that Nestle is doing well with respect to e-commerce.
E-commerce strategy
According to Michael Evans, there are different strategies related with e-commerce
which organisation must adopt. Nestle has opted for e-commerce as most of people are addicted
to online services and this will provide them better options for growth. Different strategies have
been opted by Nestle for usage of e-commerce, they are mentioned below:
 Personalize: Visitors of e-commerce site expects that they get a kind of experience by
which they can satisfy their interests and needs. Technology is used by everyone now a
day but way in which it is used makes the difference (Laudon and Traver, 2016). Nestle
ensures that they provide customers with user friendly experience by which shoppers
preferences and interests are taken into consideration.
 Create a content to build stickiness: Nestle has effective content on their website which
makes their potential buyers sticky and this is their main motive to take into consideration
taste of their customer ( Chen, Pan and Ouyang, 2014). Furthermore, they are using meta
tags and keywords to increase their ranking within search results.
 Integrate across channels: By creating multi-channel offering, Nestle enables customers
to experience brand concordantly. As per Michael Evans, it is necessary to make sure
that products which are sold via usage of various channels must be significantly
differentiated as per price differences ( Chaffey, 2015).
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These are some strategies which are formulated by Nestle. These strategies will assist
them to stand different from their customers. Furthermore, by having relevant content with their
real images will attract more number of customers which will provide them competitive edge
within digital world or e-commerce industry.
Customer Satisfaction and trends
As per Laduram Vishnoi, changing needs of customers, there demands and expectations
are increasing. Due to this organisation are making relevant changes in their working processes
so that they can meet requirements of their customers (11 Effective Customer Service Trends
That Will Drive Success in 2018, 2018). As per recent trends which is e-commerce industry
people are more focussed to these services. Therefore, it is necessary for organisations to adopt
to this changing environment. Nestle have opted for e-commerce to cope up with trending
market and their needs (Schuckert, Liu and Law, 2015). To satisfy customers, it is mandatory for
organisation to acknowledge their requests so that they can stay strong within market. E-
commerce makes it easy and convenient for customer as it has become preferred way of
shopping. They can get services at any moment of time. Nestle offers wide range of products and
when they will be offered online then it will have relevant impact on their sales.
Digital technology/ New technology
According to Tara Fenwick, it is defined as accumulation of methods, skills, processes
and techniques which are used for production of services or goods for accomplishment of
organisational objectives (Exploring the impact of digital technologies on professional
responsibilities and education, 2019). Technology is basically knowledge of processes and
techniques which can be embedded on machines. Digital technology is widely used in present
scenario as people are more inclined towards online services, therefore it is necessary to have
technology which can meet expectations of customers (Ku, 2017). For this Nestle have opted for
e-commerce by which they can provide their customers with unique experience and they can
have services or products at their fingertips.
Porter’s five forces
Nestle is known for its constant growth via innovation and research which assisted it to become
market leader and acknowledge requirements of their customers. According to Ovidijus
Jurevicius, Porter’s five forces analysis is technique via which analysts analyse
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competitiveness of company by identifying its internal and external factors. These factors
aids to identify factors which effects growth of organisation (Porter's Five Forces, 2018).
Furthermore, it also aids Nestle to improvise their strategies with respect to their
competitors. Analysis of five forces with respect to Nestle’s competitiveness within market
is presented below:
Threats of new entrants: Consumer's food industry is large and it makes difficult for new
entrants to enter within market as there are large number of barriers on entry (E. Dobbs,
2014). Large number of new entrants enter every year in an attempt to acquire large number
of market shares. This makes low threat of new entrants to Nestle.
Threats of substitute goods: Products like pasteurized milk and bottled water already have
substitutes present within market. They have home-made substitutes like baby food. Some
of products which are being offered by Nestle are not good for consumption ( Yunna and
Yisheng, 2014). Due to this there is high threats from substitutes.
Bargaining power of suppliers: Nestle have large market shares within industry due to
which they need massive quantities. That is the reason that suppliers of Nestle never
interferes with prices they are being offered ( Indiatsy and et. al, 2014). This indicates that
bargaining power of suppliers is low.
Bargaining power of customers: As per Ovidijus Jurevicius, due to high competition
within market, bargaining power of buyers is high as they have multiple options and they
can switch from one substitute to other (Mathooko and Ogutu, 2015). Nestle ensures that
their customers are satisfied.
Competitive rivalry: Nestle have to face intense competition, there competitors are
Kraft Foods, Group Danone and P&G. Competition is not just for prices which are being
offered but it is also for promotional offers, creativity and variety of products (Zhao and et.
al, 2016). All the players strive hard for retaining their market share.
Generic strategies
Strategic choices are made by Nestle which are analysed in this section to render
innovative and unusual varieties of chocolates to their customers.
Cost Leadership: According to Ritika Tanwar, it is essential segment to gain
competitive vantage within market by developing pattern of resources and scope of decisions
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(Cooper, 2017). Nestle is recognized as lower cost producer in this industry as they do not
compromise with quality of services and focus is on customers.
Differentiation strategies: Organisations are looking forward for product differentiation
by which they can acquire control within market (Golon, 2017). Nestle has targeted media
sources such as magazines, newspapers and television by which they can advertise their products
(Porter's Generic Competitive Strategies, 2013).
Focus strategies: It focusses on narrow segments. Customer focus strategy refers to ways
in which expectations of customers are satisfied with respect to specific group of segment
(Hajli, 2015). As per Ritika Tanwar, this will increase interaction of customers with
organisation thereby creates value chain management as per their preferences.
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Chapter 3
Research Methodology
Research philosophy
It is a belief about way in which data must be collected, analysed and used. It addresses
origin, quality and evolution of knowledge. Data is collected by different means and then it is
analysed to address to answer to various questions related with research. In this, positivism
research philosophy has been used by researcher. It states that some knowledge is dependent on
natural phenomenon, properties and their relations (Kumar, 2019). This information is
interpreted by usage of logic and reasons which forms knowledge. This is used by Nestle as it is
highly structured method for data collection and comprises of large samples. This approach tends
to evaluate, measure and evaluate phenomenon by which rational explanation can be obtained.
Researcher has used this approach as it goes from specific details to general.
Research approach
It is a procedure and plan which comprises of steps that include wide anticipation with
respect to data collection methods, its analysis and their interpretation. They are divided into
different approaches which includes deductive, inductive and abductive approach but researcher
has opted for deductive approach (Flick, 2015). It is related with developing of hypothesis with
respect to existent theory by formulating research strategies for testing hypothesis. Nestle has
opted for this as they can identify relationship exact relationship between variables and concepts.
It assists them to conduct market research which has been conducted and accordingly develop
idea.
Research strategy
Research strategies can be classified qualitative and quantitative research. Qualitative
research is referred to as exploratory research by which understanding can be gained with respect
to underlying motivations, opinions and reasons. It gives insights of problem by which
hypotheses and ideas can be developed ( Silverman, 2016). It is a data collection method in
which data is gathered by observations, individual interviews and group discussions.
Quantitative research refers to quantifying problem in which data can be converted into usable
statistics. Measurable data is used to formulate facts and identify patterns within research. It
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includes telephone interview, surveys, online polls, longitudinal studies and systematic
observations.
Time horizon
It is also referred to as planning horizon with reference to fixed point where certain
processes can be assumed and evaluated to end. Cross-sectional study is used to compare various
population groups within single point of time. By this researcher can compare wide range of
variables within same interval of time (Taylor, Bogdan and, 2015). It can include income,
education, gender, age which needs no additional cost or very little amount is required. They are
observational in nature and mostly described as descriptive research. In this, nestle do not alter
variables but analyse the variables which are present within population. In this researcher analyse
prevailing characteristics of given population.
Data collection method
It is process for measuring and gathering information with respect to variables of interests
which are established in systematic manner that enables researcher to answer relevant answer by
which they can evaluate results. Secondary data collection method is used by researcher in this
research. This is defined as process in which data is gathered by someone else for some specific
purpose (Thuries and Gillet, 2016). There is no specific method to collect this data and this is
available in readable form. These sources are: financial statements, sales reports, company
information, customer details (such as contact details, age, name, etc.), management information
system, journals, books, magazines and many others.
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Chapter 4
1. Why is e-commerce strategies important to Nestle UK?
Strategies have been formulated by Nestle UK to have high return of interest, they are focussed
to develop and design a website which is considered as initial step in e-commerce strategies. It
has been observed that at present scenario people are more keen towards smart devices and that
is the reason behind fast evolution of technology which results in enhancement in potential
online market and internet is a tool from where lots of information can be attained (Morganti
and Lenz, 2014). Therefore, it is essential for Nestle to have their own website by which they can
attract large online users. It should be designed in such way that target leadership can find
important information. In case of Nestle UK their webpage must contain their brands like
Maggie, Neslac, etc and they should be designed using flash type technologies in which pages
will splash. Website usability assist visitor to attain their objective for which they are visiting site
in simpler way. Nestle need to formulate their website in such a way that there is transparent
categorization of their brands. Moreover, they need to provide in-site search option where they
can provide message search again when product is not found. Furthermore, they need to update
their website on regular basis to provide latest information about products offered by their brands
(Morris, 2011). They can also provide details of ingredients used within each product.
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2 What significant role of e-commerce plays in the life of consumers ?
In present scenario e-commerce plays major role in life of customers as it provides wide range of
facilities, some of them are described here. They provide customers with easiness and
convenience. It is preferred way of shopping as they are able to do shopping at any time either its
day or night. Customers can get details and description of products from online catalog which
makes them easy to make decision what to buy and what not (Pantano and Iazzolino, 2017).
This information may not be gained while in physical store, as it becomes difficult to equip
employees who can provide details of different products to their customers. Moreover,
customers get lower cost by e-commerce website when compared to traditional selling and
shopping. It takes less time to do shopping. Customers also gets exciting offers which is the main
reason they opt more for shopping through e-commerce website and they also gets notifications
when new products are added into list which makes them easier to identify latest trends within
market.
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3 What are the security and legal concerns of Nestle Company UK associated with e-commerce?
Nestle has to face labour laws of different countries as they are operating and carrying out their
functionalities in various parts of world (London, 2008). Therefore, they need to abide rules and
regulations formulated by government/ruling bodies of different countries. They need to follow
minimum wages act and accordingly give salary to their employees, this law has set certain age
limit and wages for different age groups on per hour basis. They also need to follow regulations
and rules when they set up themselves in any part of country. Furthermore they need to secure
their trademark so that anyone else cannot copy that and they also need to ensure that they do not
imitate others. They also need to follow health and safety laws set by government to make sure
that their employees are safe and healthy products are being offered to their customers. Security
is main concern while running online business, privacy is main concern which can create
problem for both customers and business. Information is shared by customers through online
mediums and they expect that their information is kept confidential by sellers. If things go wrong
then organisation can lose their potential customers (Cassell and Symon, 2012). It is necessary
that Nestle should abide all rules set by government to address privacy concerns.
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4 What are the future trends in e-commerce within the country?
In future, e-commerce can provide automation and personalization options to their customers. In
this case progress will be enhanced and organisations can gain enhanced vantage. Automation is
referred to as process of creating and providing technological applications by which processes
such as marketing, sales, production, delivery and management system can be improvised. When
there is high traffic on online stores, then these automation processes will provide well-oiled
selling machines which will automate the processes. This will improvise the experience of
customers. Checkouts can become easier (Taniguchi and Thompson, 2014). This process was
irritating as payment process can turn into card abandonment, due to this organisation suffers
income loss. It can be made easier by making it one-page checkout, creation of autofill fields, by
making process of registration shorter and easier and by scanning credit cards of users/customers
through image recognition services. In future key steps for online shopping processes can be
changed. This will have relevant impact on website analytics, checkout ways and overall
targeting of clients.
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CHAPTER 5
To understand E- Commerce and its applications in business medium is used to do commercial
E-commerce is a term in which electronic transactions, in this mainly sale of wide range
of products and services are done through the medium of internet (Collis and Hussey, 2009).
There are different types of business areas in which application of E-commerce applications are
done such as, manufacturing, wholesale and retail. Mentioned below there are some most
common applications of E-commerce:
Online marketing and purchasing:
There are different types of marketing and purchasing is done through the online system.
Some of these activities include, game marketing, website social network, mobile application etc.
E-commerce and Web, benefits in collecting information about consumer behaviour, buying
patterns and needs (Li and Kannan, 2014). Along with this, it helps business industries to
conduct their functions relating to product feature enhancement, price fixation and maintaining
formative relationships with consumers.
Retail and Wholesale:
There are different types of E-commerce applications involved in wholesale and retail.
Such as, E-retailing and on-line trading of products and services are done through a business
medium of Business-to-Customer with the help of electronic stores. In this, shopping cart model
and electronic catalog are designed with these help of which buying of goods and services are
done. There is only one single website known as Cybermall that provide various goods and
services under single internet connection (Bumpass, Ginn and Tuttle, 2015). It benefits in
attracting different types of customers and various sellers in a single virtual space.
To critically evaluate the growth of e-commerce in the retail industry
Mentioned below there are so many revolutionary growth sector for E-Commerce which
is briefly described below:
Mobile payments are gaining grounds:
In the present digital world, large number of customers prefers to pay through mobile
payment gateways. All these payment gateways have large impact in shopping experience.
Therefore, it is important for a web store owner to provide more payment modes to customers.
Delivery as differentiator:
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E-Commerce industry effectively aid in rapid growth and development and with the
increase in competition it is hard for e-commerce websites to provide their products in a
differentiated way order to become leading players in online market (Yusuff, Jimoh, and Munda,
2014). E-commerce benefits industries to have more delivery options, offer free delivery
products, deliver their products in certain time period and take advantage of express delivery.
To analyse the impact of e-commerce on productive and profitability
E-commerce industry effectively influence an industry production and profitability as
with the help of different types of e-commerce web sites owners can attract large amount of
customers base by offering them various types of attractive benefits.
RECOMMENDATION S
On the basis of the above specified research, it can be said that e-commerce is a good
strategic activity which assists an organisation in enhancing its base of customers and
consequently the share in market as well as profits (Saunders and Thornhill, 2012). Thus, it has
been recommended that Nestle UK should adopt e-commerce as a tool to provide convenience to
customers as well as to enhance its presence in market. This strategy of entering e-commerce
market will help the organisation in persuading customers prevailing within international market
to build a connection with business and make a purchase. Also, this strategy of company is
convenient, easy and ensures relaxation to people in terms of non-necessity of making visits to
brick and mortar style stores of Nestle UK. It has been acknowledged that by gaining entry into
e-commerce sector, entity can gain the attention of a larger quantum of population and influence
them to stay loyal to business by rendering high quality and fairly priced products and excellent
customer service. Further, it has been suggested to company to hire technical personnel who can
render training to existing staff of the organisation who do not possess the right skills, knowledge
and competence to carry out activities associated with handling of e-commerce portal of entity.
This will assist the entity in developing the existing knowledge base of workforce to make them
compatible for carrying out the high tech activities of company which will assist the organisation
in enhancing its sales as well as profitability in global marketplace.
CONCLUSION
From the above specified research report, it has been concluded that e-commerce assists
an organisation in gaining a strategic and competitive edge in market. Further, it has been
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analysed that there are a number of trends that are associated with e-commerce sector that can be
tapped by a company to enhance its share in global marketplace. Also, it has been ascertained
that the management of organisation has to alter their functioning and operations in a way that
the workforce do not resist entry into e-commerce sector. Further, it has been acknowledged that
to effectively carry out the activities related to e-commerce, entity need to provide training to its
non-technical staff so that they can effectively execute the processes associated with handling of
e-commerce portal of company.
LIMITATIONS OF STUDY
While conducting this research, the researcher faced a number of issues or it can be said
that this study possessed several limitations. One of these limitations was the time allotted to
investigator for conducting this research which as per their perception was not adequate or
sufficient to effective carry out study upon the topic under study. This owes to the fact that e-
commerce is a vast concept having a number of elements associated with it which cannot be
studied and researched upon in a time span of few months. Further, while carrying out the
research, the investigator found that the resources as well as the money available for conducting
the study was not enough to effectively gain knowledge about all the aspects of study. Yet
another limitation of this study was in relation to the validity and reliability of data which
together act as the foundation to conduct a good research and should not be ignored by
investigator in any circumstances. This happened because while collecting information through
secondary sources, the researcher at times felt that the point of view of authors and academicians
contradicted his perceptions in relation to the topic under study.
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