UUIS8100: E-commerce Business Strategy Report - New Zealand

This comprehensive report examines the e-commerce business strategy, focusing on the company AVP, which sells digital goods, specifically antivirus software, in New Zealand. The report begins with an executive summary, letter of transmittal, and an introduction to e-business and its rapid evolution. It then delves into disintermediation, exploring how e-commerce transforms intermediaries and the functions they serve. The core of the report analyzes the e-commerce business model, including value proposition and revenue models, with a focus on subscription-based services. It also incorporates a discussion on the impact of various factors on e-commerce adoption. Furthermore, the report discusses clickstream behavior and concludes with recommendations to establish the e-commerce business and references. The assignment also included the development of a prototype website using Joomla, with details provided in the appendices, including a checklist and website development journal.

Running head: E-COMMERCE BUSINESS STRATEGY
E-COMMERCE BUSINESS STRATEGY
Name of the Student
Name of the university
Author note

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Table of Contents
Executive Summary...................................................................................................................2
Letter of Transmittal..................................................................................................................3
Introduction................................................................................................................................4
Disintermediation.......................................................................................................................5
E-commerce business model......................................................................................................7
Clickstream Behaviour.............................................................................................................10
Conclusion................................................................................................................................12
Recommendations....................................................................................................................13
References................................................................................................................................14
Appendices...............................................................................................................................16

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Executive Summary
Electronic commerce includes technologies such as mobile commerce, fund transfer system
by the electronic medium, management system of the supply chain, marketing on the
platform of internet and many more. With the increasing usage of the internet the e-
commerce business has grown significantly. The report below is on the emerging e-
commerce business platform, encloses some facts on the same. An e-commerce website that
has been developed has also been discussed in the company name being AVP. It is to be
operated in New Zealand only. The report concludes by providing certain recommendations
on how the e-commerce business can establish itself amidst it target customers.

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Letter of Transmittal
Date ()
Professor,
Assistant Professor,
Department of (),
University name ()
Subject: Submission of assignment on “E-commerce business strategy”
Dear Sir,
The assignment below has been completed as per your instructions and according to the topic
that was given by you. I am thankful to everyone who has been of help in completing this
assignment. I will be obliged to answer all your questions based on this report. The class
notes and the knowledge got from professors were of great help.
I have tried my best to fulfil the requirements of the assignment and am hopeful that you will
like it.
Thanking you.
Yours obediently,
(NAME)

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Introduction
E-business is evolving at a faster rate with the advancement of technology around the world.
It can be attributed to the revolutionary discovery of the internet which has found its usage in
all spheres and as per some researches conducted, the usage of internet has increased over
almost 400% from the year 2000 to the year 2010 (Rahayu and Day 2015). In New Zealand
almost 86 percent who were aged between 16 years to 74 years used the internet
(Stats.govt.nz 2019). These data are the source of encouragement for the firms in building
websites and at the same time coming up with modern methods to serve the customers who
prefer online platform (Kurnia et al. 2015). In most cases in the case of B2C businesses, this
refers to the creation of an online store or web store. Along with this, the companies or the
firm operating by making the Internet as the medium are growing. The impact that the
internet has put on the global marketplace is explained by Peter F. Drucker as follows:
“The explosive emergence of the internet as a major, perhaps eventually major, worldwide
distribution channel for goods, for services, and, surprisingly, for managerial and professional
jobs is profoundly changing economies, markets, and industry structures; products and
services and their flow; consumer segmentation, consumer values, and consumer behaviour;
jobs and labour markets.” Internet commerce or e-commerce refers to the way the internet
technologies and its associated applications are made use of to support the business activities
of any firm (Erturk and Fail 2015). As per definition, any kind of business activity can be
oriented in two ways that are internally or externally at the same time being of either
transactional nature of the strategic nature (Howison, Fingerm and Hauschka 2015). The
report is about e-commerce businesses and here a website that has been developed is been
considered. The name of the company being AVP that sells digital goods. The website has

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been developed and it’s mainly for antivirus software the name itself suggesting AntiVirus
Pro. In the paper facts related to e-commerce businesses have been discussed.
Disintermediation
As per the traditional ideas, disintermediation refers to development that aids the
households in effectively bypass the banks rather than any such place where they keep their
savings, financial institutions as well. In this Web context, it has been able to curb the
interference of the middlemen or such intermediaries thereby creating an enhanced network
of sales where the customers can deal with the service providers directly (Eyers and Potter
2015). The outcome of the same also reduced the inefficiencies in the middlemen process and
costs also decreased. Initial studies on the e-commerce business platform were not according
to the anticipations of the researchers but gradually it evolved and has made itself a strong
firm. Critics believed that the Internet would prove detrimental for their business while some
others agreed to the fact that e-commerce will take their business to another level. The e-
commerce platform has transformed intermediaries to Cybermediaries (Popescu 2015). The
change of the intermediaries to cybermediaries needs a certain approach that can effectively
break down sales related transactions to certain consistent functions and associated functions.
When this is done in a direct manner or via the medium of a third party four primary
functions make the exchanges taking place easier, cutting on the prices of this sales
transaction at the same time improving the responsiveness to the needs of the customer. Four
of these functions are as follows:
1) Aggregation- The comprehensive demands of the customers by a specific intermediary or
maybe the accumulation of numerous suppliers by the distributors serve as alternatives in
case of the situations where each of the customers finds a direct path acting as the source of
the products and producers need to sell the same directly to each of the buyers. This function

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decreases the costs of transaction and aids the economy of the business thus cutting down the
asymmetry existing between the negotiating clout in between the customers and the
producers.
2) Trust- The intermediaries provide a guarantee by protecting the buyers or the sellers from
manipulative actions. This possibly decreases the transaction costs that play a vital part in the
e-commerce platform and in that case where the mechanisms assure the confidence of the
buyers in the producers and security is also a concern. E-commerce platforms have slowly
and steadily gained the trust of the customers.
3) Facilitation- The process of transfer of information to the decentralized markets are costly
as each of the participants needs to seek out and pass on information with the other
participants involved in this. In the above-said scenario, a broker can speed up the process
being an intermediary in the process, decreasing the costs related to coordination in the
market premises. The intermediaries speed up the exchanges by providing the related
services, for example, managing the financial and the administrative arrangements.
4) Matching- The intermediaries have different methods to search out the buyers for the
sellers and the other way round. The methods comprise of the database administrators,
sorting that particular information that needs to be sent to the customers in catalogs,
focussing efforts on the preference of the buyers and alternative studies and associated
characteristics of the competing offers. The supermarkets mainly offer this providing the
chance to the customers to make a comparison between various products and categorize this
accordingly.
Since the middle of the year 1995, Amazon.com has been in the business of selling
books online making the internet as the medium by replacing the direct contact with the
customer for the transactions that some time back involved “the bookstore around the
corner”. Amazon.com has since then got a major percentage of the U.S. sales of books

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thereby capturing the sales from the traditional bookstores and the book superstores as well.
The primary advantage of this online website is that this provides the customers with a
variety of books and a buyer can get many choices comparing prices as well. The plus point
of Amazon.com is that it provides its buyers with a personalized service establishing new
relationships among the readers. The application has the criteria to provide suggestions for
the books and record the current as well as the past preferences of the customers or
specifically the like-minded book readers (Turban et al. 2017). These are some of the value-
added services that are personalized and can be distinctly viewed by the customers avoiding
delays in case of physical processing in the process of purchasing the same and till the
packing and shipping of the products.
E-commerce business model
Recent survey research in some of the small to medium-sized enterprises in New Zealand
conducted to find out the impact of ten factors on the adoption of the e-commerce platform
along with three categories of the dependent variables (Laudon and Traver 2016). The ten
factors that had been considered are as follows; cost, size of the firm, the innovation of the
company’s CEO, compatibility of the e-commerce platform with the business, intensity of the
information of the related products, the involvement of CEO in the decision of adoption, the
competitors, technology vendors’ support and the pressure from the supplier or the buyer.
The three categories of the dependent variables are as follows:
1) “Starters” that consist of adopters of Internet technology and email technology.
2) “Adopters” that consist of the adopters among the four infrastructure and the
communication technologies that include the Websites, Extranets, Internet EDI and
Extranets.

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3) “The extended adopters” which was made a part of the model for testing the difference
existing in between the adopters and non-adopters along with the adopted ECITs.
Three of these above-written categories of adoption were introduced as it was necessary to
find out or monitor in which place genuine adoption and related innovativeness generate in
the firms.
The website that has been designed is to sell digital goods online that include antivirus
software and generating revenue by subscription strategy. The evolution of the e-commerce
platforms have given a direction to the online websites and this website is made to sell some
of the digital tools and the e-commerce platform has been chosen as this comprises of buying
and selling by making use of the internet platform and at the same time helps in collaborating
with the various business partners (Chaffey, Hemphill and Edmundson-Bird 2015).
Value Proposition – With the digitization in the market surveys prove that almost every
organization are opting for digital transformation strategies and making e-commerce as the
heart of their digital transformation will be of great help to stay competitive and retain some
of the loyal customers. The surveys conducted suggest that 44% of the respondents believe
that the e-commerce platform can effectively deliver a customer experience that is important
for the growth of the business. AVP deals in antivirus software and thus the customers of the
firm will get the antivirus software from the web stores rather than from local markets that
often trick the public. The customer demands can be considered as well and work can be
done accordingly. The second most vital concern is that the demands of the customer have
been changing from being simple to something more personalized experience. E-commerce
has been considered as the appropriate platform providing a personalized buying experience.
By obtaining conclusions from the existing data of the ERP systems of companies, e-
commerce solutions are tailored delivering the extra information helping the buyers to make
better decisions when buying things. The details, for example, the history of the purchases

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previously, some add-ons for the products that were bought previously and the stock update
regularly will keep the customers involved with the website.
Revenue Model – AVP can earn revenue in five distinct ways and they are as follows:
1) By selling services: The person handling the website must be an expert in the field of
antivirus software so that services can be explained to the customers.
2) Subscribed Communities- Subscriptions can be made use of as part of the revenue model.
The subscriptions can be either for a product model or some sort of pricing model. E-
commerce businesses are moving over to this model and they rely on their subscriptions for
encouraging repeat business.
3) Information products: Information products are the products that are sold online and these
are the essential vehicles in case of delivering expertise.
Return on Investment is keeping track of the expenses made by the company and the
revenues earned after that. ROI also keeps a track of the time invested in the strategies. To
get a positive ROI the company needs to have a note of its expenses and the revenue being
earned along with the time being invested in the different strategies.
Competitive Advantage – The advantage of the firm over the other e-commerce is that the
buyers are the organizations and these will be requiring antivirus software to keep their data
safe and thereby becoming significant clients. Selling of the antivirus software online is not
that popular in the market and if AVP can establish itself in the market of New Zealand then
it can gain the trust of its clients at a faster pace. The idea of selling antivirus software online
can be considered as a unique one and thus it can attract customers. With the increasing
number of data breaches, this will the appropriate platform for the victims to but antivirus
software that too online.
Market Strategy – Marketing strategies are important to capture any market. Every
individual business deals in different things and thus the procedure to market its products are

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different. In the case of AVP, the promotion of the website can be done using blogs. Blogs
are one of the well-known strategies that can be used and these provide educational and
quality of the content. Blogs can be used to write posts answering different questions of the
buyers providing specific solutions. Promoting the business on social networking platforms
can help capture the market as well. Social media can act as the best medium to promote any
business.
Organisational Development – AVP follows the functional structure which comprises of a
top-down flowchart having an executive at the highest position with numerous sub managers,
for example, the human resource, accounting, webpage developing and accounting
department heads and these heads are responsible to the top executive directly. The
department heads manage these departments and they are answerable to the manager at the
topmost level. This is a structured organizational development structure and in e-commerce
platforms will be effective in bringing the necessary developments.
Clickstream Behaviour
The present era of Internet services is driven by the users and the content that is
generated by the user. The complex nature of the behaviour of the user is highly challenging
in managing and securing online services (Sılahtaroğlu and Dönertaşli 2015). Considering
one aspect the service providers are not able to prevent the attackers from developing fake
identities in disseminating the unwanted contents and another aspect of the same is that
abusive comments from the real users posing serious threats (Alswiti et al. 2016). Here
clickstream models have been considered characterizing the behaviour of the user in the large
online services. The clickstream behaviour of the customers is beneficial for the organization
as by analyzing these clickstream traces the organization can achieve its goals such as:

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1) Detection- In capturing various user groups to detect malicious accounts.
2) Understanding extracting the semantic information from the user groups to get an
understanding of the behaviour that has been captured.
Two systems that are linked together are designed to achieve the goals. One is a semi-
supervised system used in detecting malicious user accounts. The main idea in this is building
a clickstream similarity graph where each of the nodes being a user and each of the edges
captures that which is similar in between two user’s clickstreams. Based on this particular
graph, the developers proposed as scheme identifying groups of the malicious accounts
without depending on the large labelled dataset (Sun, Wang and Liang 2017). For companies
like AVP, clickstream behaviour will be of great help by identifying the unexpected
behaviours of the user and at the same time predicting the future actions of the user. The
system is validated by making use of the ground truth clickstream traces of many users.
Unlike the first one, the second is unsupervised aiming to capture and at the same time
understanding the fine-grained behaviour of the user. Instead of making use of the binary
classifications the model is effective in identifying natural groups of the behaviour of the user
and the features that are needed are extracted automatically thereby aiding in interpreting the
semantic meanings. This system helps the service providers to identify the unusual or the
unexpected behaviour of the users and predicting the future actions of the users.
Understanding the behaviour of the user plays an important role in designing as well as
operating the services offered online. Recent works can effectively analyze the traffic on the
network and the server logs to study the users’ intention to search and the editing patterns
thereby characterizing the activities of the user in the online platform. As per earlier
researches, the clickstream data was used for Web Usage Mining (Raphaeli, Goldstein and
Fink 2017). To record the users’ path of navigation on site simple methods for example
Markov Chains were used. But these specific models lay stress on the simpler aspects of the

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behaviour of the users and cannot handle the sophisticated behaviour of the users. The other
such approaches make use of the clustering techniques to recognize the groups of the users
who share almost the same clickstream activities. The outcomes of these categories are made
use of to come into inference about the interests of the users and predict the future of the
behaviour of the users. However, the cluster-based models that are available at present are
highly supervised thus require volumes of samples of data to train parameters. The
clickstream behavioural models can help AVP to get to know their clients’ choices and
thereby showing them those products which they will like. This will be effective in increasing
revenue as customers will be given suggestions as per their choice and thus they will be
convinced to but the antivirus software. The basic goals of analyzing the behaviour of the
user are detecting the malicious users and their activities those who can be detrimental to the
website.
Conclusion
From the above discussion, it can be concluded that the website created has a good
chance to get popular as an e-commerce website as it deals in digital goods mainly the
antivirus software. With the growing number of data breaches, it has a good stage to start up
its work. Availability of the antivirus software on the online platform is a good and new
concept thus the steps involved in setting up the e-commerce business must be taken care of.
The vital steps that include choosing products, making the evaluation of the idea, proper
research, and planning and making a significant business plan. The problems that the e-
commerce businesses are facing in New Zealand should be researched on and work should be
done accordingly so as AVP does not suffer from the same. The business needs to reach out it
target customers and get itself established as a firm.

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Recommendations
1) E-Commerce websites need to protect themselves from hackers and data breaches.
2) The business structure should be well organized and manage to keep a proper track of the
project.
3) The competitors in the market must be known.
4) Customer support must be active.
5) Negative promotions should be avoided.
6) Customer loyalty should be the main aim.
7) Skilled personnel should be hired to manage the website.
8) The contact numbers must be checked and updated properly if any change is there in it.
9) Promotions must be done in an organized manner.
10) To attract the clients initially some offers might be provided.

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References
Rahayu, R. and Day, J., 2015. Determinant factors of e-commerce adoption by SMEs in
developing country: evidence from Indonesia. Procedia-Social and Behavioral Sciences, 195,
pp.142-150.
Kurnia, S., Choudrie, J., Mahbubur, R.M. and Alzougool, B., 2015. E-commerce technology
adoption: A Malaysian grocery SME retail sector study. Journal of Business Research, 68(9),
pp.1906-1918.
Howison, S., Finger, G. and Hauschka, C., 2015. Insights into the Web presence, online
marketing, and the use of social media by tourism operators in Dunedin, New
Zealand. Anatolia, 26(2), pp.269-283.
Eyers, D.R. and Potter, A.T., 2015. E-commerce channels for additive manufacturing: an
exploratory study. Journal of Manufacturing Technology Management, 26(3), pp.390-411.
Popescu, G.H., 2015. E-commerce effects on social sustainability. Economics, Management,
and Financial Markets, 10(1), pp.80-85.
Turban, E., Outland, J., King, D., Lee, J.K., Liang, T.P. and Turban, D.C., 2017. Electronic
commerce 2018: a managerial and social networks perspective. Springer.
Laudon, K.C. and Traver, C.G., 2016. E-commerce: business, technology, society.
Chaffey, D., Hemphill, T. and Edmundson-Bird, D., 2015. Digital business and e-commerce
management. Pearson UK.
Mazzarol, T., 2015. SMEs engagement with e-commerce, e-business and e-marketing. Small
enterprise research, 22(1), pp.79-90.

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Wang, W.T., Wang, Y.S. and Liu, E.R., 2016. The stickiness intention of group-buying
websites: The integration of the commitment–trust theory and e-commerce success
model. Information & Management, 53(5), pp.625-642.
Zhu, F. and Furr, N., 2016. Products to platforms: Making the leap. Harvard business
review, 94(4), pp.72-78.
Ince, D. ed., 2017. A Dictionary of the Internet. Oxford University Press.
Sılahtaroğlu, G. and Dönertaşli, H., 2015. Analysis and prediction of Ε-customers' behavior
by mining clickstream data. In 2015 IEEE International Conference on Big Data (Big
Data) (pp. 1466-1472). IEEE.
Alswiti, W., Al-Shboul, B., Faris, H. and Hakh, H., 2016, August. Users profiling using
clickstream data analysis and classification. In 2016 Cybersecurity and Cyberforensics
Conference (CCC) (pp. 96-99). IEEE.
Sun, T., Wang, M. and Liang, Z., 2017, December. Predictive modeling of potential
customers based on the customers clickstream data: A field study. In 2017 IEEE
International Conference on Industrial Engineering and Engineering Management
(IEEM) (pp. 2221-2225). IEEE.
Raphaeli, O., Goldstein, A. and Fink, L., 2017. Analyzing online consumer behavior in
mobile and PC devices: A novel web usage mining approach. Electronic Commerce Research
and Applications, 26, pp.1-12.
Stats.govt.nz. (2019). Home | Stats NZ. [online] Available at: https://www.stats.govt.nz/
[Accessed 9 Aug. 2019].

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Erturk, E. and Fail, D., 2015. Information technology in New Zealand: Review of emerging
social trends, current issues, and policies. arXiv preprint arXiv:1504.07012.

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Appendix 2
Activity Date Description
Gathering information Informations based on e-
commerce and the associated
sphere.
Planning Making a plan for the whole
process.
Design Confirming the design of the
website.
Content writing Content of the web pages
decided and written.
Assembly coding The required codes to run the
website.
Testing and reviewing Checking if the website options
such as logging in and all are
working.
Launching Launch of the project.
Maintenance Proper work on updates.
Architecture of the site The structure of the site revised
if needed.
Completion of the project Final project ready.