E-commerce Strategies & Strategic Options: BMGT7011 Assessment

This essay critically evaluates e-commerce business strategies, focusing on generic strategies like cost leadership, differentiation, and niche strategies within a B2C model. It emphasizes the importance of understanding customer needs and building strong customer relationships through IT-enabled platforms. The proposed e-commerce business model targets young consumers interested in branded clothing, aiming for differentiation through exclusive products and excellent customer service, including 24/7 live chat support and social media engagement. The analysis also considers the integration of cost leadership with quality differentiation to cater to price-sensitive yet quality-conscious customers, highlighting the role of customer intimacy in shaping successful e-commerce strategies.

Running head: E-COMMERCE STRATEGIES
E-business
Name of Student:
Name of College:
Authors note:
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E-COMMERCE STRATEGIES
Contents
Introduction.................................................................................................................................................3
Evaluation of generic e-commerce business strategies...............................................................................3
References...................................................................................................................................................7
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E-COMMERCE STRATEGIES
Introduction
As today’s retail landscape is extremely competitive so e-commerce providers need to
understand better e-commerce strategies to compete effectively. In this report generic strategies
are analysed to build scope, focus and intimate association with customers through better
interpretation of need and deep connections that shapes customer behaviour and which should be
well known to retailers to develop compelling approaches supported with customer insights.
Evaluation of generic e-commerce business strategies
According to SALAVOU (2015) business strategies offers a significant meaning to approaches
and influences for managing a company so that these are vital for making informed and capable
business decisions. B2C or business to consumer or e-commerce is applied to a business retailing
process where transaction is carried over internet amid a business and a consumer for personal
consumption. The B2C mode varies considerably from B2B which refers to transaction between
two or more businesses and C2C which refers to commerce between customers to customer that
offers an innovative platform which permits customers to connect with one another. Unlike
traditional retailing where customers went to business so as to purchase the product or service in
C2C mode the platform promotes an environment where customers can sell products/service to
another customer. The retailers of today generally seek for range of strategic level of decisions
before launching a business that includes planning for store type, format, scope & focus of
business, market to be served, optimised assortment of products, customer service & support
services and overall positioning of retail business in market. Once the retailers decide the
strategic planning, they plan for different mix of marketing for retail that includes all 4 P’s along
with people and process in context to e-commerce retailing. However in context to digital age as
more retailer groups are looking to increase their reach to wider customer markets through
selling across multi-channels that comprises both bricks and mortar and online or e-business
selling. This change in traditional retailing format has been due to digital technology which has
also significantly influenced the manner customers pay for their goods/services in e-business.
These support services can include possibilities of credit, delivery services, advisory service,
personalised stylist services and range of other support service in e-business retailing.
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E-COMMERCE STRATEGIES
According to Porter’s generic strategy there are three forms of strategies which are cost
leadership, differentiation and focus or niche strategies based on cost or differentiator focus
(Shaw 2012). These even fit well to e-commerce business context as like conventional business.
For instance the strategic fit of generic strategies for e-commerce can be evaluated under:
Scope: according to Banker, Mashruwala & Tripathy (2014) generic strategies for e-commerce
have three scopes i.e. cost leadership, differentiation strategy and niche strategy. E-commerce
business that uses cost leadership attempts to achieve competitive edge through reduction of their
costs, while e-commerce companies that utilises differentiation attempt to achieve competitive
edge through offering distinct customer value proposition from that provided by their rivals.
However e-commerce companies that utilises niche strategy attempt to seize competitive edge by
targeting a particular market segment or group of customers through either cost focus or
differentiation focus approach.
Our website is a B2C business model where consumer would go to website, chose product
catalogues, order selected items whose requirement is sent to business partners, customers then
pays for item and after confirming order or payment the business delivers the product/service to
customer location.
Fig: Online store based on B2C mode
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E-COMMERCE STRATEGIES
Source: Gatelog Systems (2018)
The website will be based on niche approach of differentiator focus according to generic e-
commerce strategies where competitive edge will be maintained by focusing mainly on young
generation of consumers who are crazy of expensive braded clothes delivered through online
websites where products from across the globe will be available for purchase. The online e-
business website will showcase range of exclusive branded items that will make our website
unique in differentiation from others in New Zealand where either there are physical stores or
limited available online stores. For focus on differentiation based on niche approach our website
will offer products that would be labelled with detail information so that customers could read
and select items that suit their needs. Also the website will have 24X7 live chat options where
customers can solve their queries and get instant assistance on product/service or payments or
replacement.
Focus: according to Asdemir, Fernando & Tripathy (2013) in context to e-commerce business
the focus of cost leadership is over low cost, for instance e-commerce platforms that offers
tourism products like Lowestfare.com focuses on cost leadership by providing low priced travel
products. These are attained through integration of their business process with power of internet
where cost gets reduced significantly with strategic alignment of business and IT. In another
example e-commerce business Travelocity.com focuses on differentiation strategy with better
customer service to achieve distinctiveness in their offerings against rivals. Further niche
strategy is offered by e-commerce business Lastminute.com where it applies niche approach by
offering clear distinctiveness visualization by focus on cost sensitive travellers with adaptability
for travelling on even short notice.
Our website will focus by blending cost leadership with quality differentiation for niche markets
of young customers who are high in trend fashion preference as well as are price sensitive but
seek for quality in product as well as support services.
Customer/supplier intimacy: as opined by Viltard (2017) customer intimacy is a marketing
approach where the retailer or supplier of product/service focuses on building close association
with customers by better interpretation of their needs and wants. This helps retailers in
interpreting and forecasting the customer requirements and desires in a better manner which
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results to new product generation with customer at the centre of strategic approach. Hence it is
elevated form of customer intimate strategies. For example with better integration of business
and information technology e-commerce companies can integrate planning process to shape
better generic strategies. According to Bacan (2015) like an e-commerce retailer with focus on
cost leadership can offer low cost through building customer intimacy with more effective
transaction process integrated with IT application that can considerably lower cost of order entry,
billing, customer assistance and marketing thus leveraging benefits and close association with
customers by meeting their needs or expectations in better manner. Another instance is when e-
commerce retailer focus on differentiation then they make significant efforts to improve supplier
intimacy with shipping firms to enhance distribution effectiveness and improve better customer
service associations that is distinct from other. Also in case e-commerce firm focuses on niche
strategy then they may utilise IoT applications to reduce either cost of operations, extend into
market or to offer improved customer support for creating customer intimacy.
Our website will focus on customer intimacy where round the clock live chat support option will
be available for customers so that they can connect with business anytime, anywhere with ease
and accessibility. This customer intimacy will be based on IT enabled business platform that will
process information to customers whenever they would need support. Also social media will be
used to build customer/supplier intimacy where they can look for assistance and get informed of
updates on products, deals etc to support delivering of benefits and close connections.
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References
Asdemir, O., Fernando, G. D., & Tripathy, A. (2013). Market perception of firm strategy.
Managerial Finance, 39(2), 90-115. Retrieved from doi:
http://dx.doi.org/10.1108/03074351311293972 [Accessed on 7 Oct. 2018]
Bacanu, B. (2015). The e-commerce as a way to sustain a strategy. Bulletin of the Transilvania
University of Brasov. Economic Sciences. Series V, 8(1), 119-124. Retrieved from
https://search.proquest.com/docview/1692478737?accountid=30552 [Accessed on 7 Oct.
2018]
Banker, R., D., Mashruwala, R., & Tripathy, A. (2014). Does a differentiation strategy lead to
more sustainable financial performance than a cost leadership strategy? Management
Decision, 52(5), 872-896. Retrieved from
https://search.proquest.com/docview/1633967188?accountid=30552 [Accessed on 7 Oct.
2018]
SALAVOU, H. E. (2015). Competitive strategies and their shift to the future. European Business
Review, 27(1), 80-99. Retrieved from: doi: http://dx.doi.org/10.1108/EBR-04-2013-0073
[Accessed on 7 Oct. 2018]
Shaw, E. H. (2012). Marketing strategy. Journal of Historical Research in Marketing, 4(1), 30-
55. Retrieved from: doi: http://dx.doi.org/10.1108/17557501211195055 [Accessed on 7
Oct. 2018]
Viltard, L. A. (2017). STRATEGIC MISTAKES (AVOIDABLE): THE TOPICALITY OF
MICHEL PORTER’S GENERIC STRATEGIES. Independent Journal of Management &
Production, 8(2), 474-497. Retrieved from doi: http://dx.doi.org/10.14807/ijmp.v8i2.580
[Accessed on 7 Oct. 2018]
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