E-Commerce Business Plan: Fusion.com's Footwear and Apparel Strategy

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Report
On
E-Commerce Business Strategy
Retail (Footwear & Apparel)
(fusion.com)

Executive Summary
E-commerce refers to Electronic Commerce or Internet Commerce. This term is used for selling
and buying the products using the online sources. This activity needs the user’s data and money
transactions to execute. This term is basically used for physical products sell or buy online but
this is also used for commercial transactions through online.
In this report we are going to discuss about an E-commerce business which is developed on
Joomla. This business is for selling and buying footwear and apparels of men and women. So we
are going to discuss about the business strategies, business model and online marketing and
advertising tools with respective to our e-commerce website.
Introduction
In this report we are going to discuss the e-commerce business strategies. Which will be helpful
to create our business more popular and trust worthy.
This report is on e-commerce website of footwear and apparels which is going online so it will
need proper guidance and business model and strategy. This report will contain the details of our
online e-commerce business. There will be mainly three sections in this report. First section is
for e-commerce business strategies. Second section is about e-commerce business model and its
key elements. Third section is for online marketing and advertising tools for our e-commerce
business.
I am developing the E-commerce prototype named as “Fusion.com”. This name gives a fashion
vibe which really suits our e-commerce platform. Because it will be for the customers who loves
fashion.

Section 1
E-commerce Business Strategy
A business strategy is a set of long term plan for achieving huge profits on the capital invested in
an organization or business. These strategies help in making superior returns of the investment in
huge competitive environment. A profit is basically a difference between the cost presenting to
the customers by organization and the cost of producing goods (Gregory, et al., 2017).
There are five generic business strategies:
1. Product Differentiation Strategy: This strategy is to make a difference with your
business in market. This strategy is for all the producers so that they can make their
products or the services they are providing unique and different from all the competitors in
market. When a situation of commoditization arises means there are no differences among
the products and services of different organizations then the price of products and services
falls to the cost of making and there will be no profit for the organization so the difference
is necessary for making good profits (Gaigné, et al., 2017).
2. Cost Competition Strategy: By cost competition strategy a business can discover unique
sets of different business processes or resources that other organizations in market cannot
discover. Business process is the unit of the business value chain. When a business
discovers new resources then it will effect on their products and their costs in a good way.
These unique and cost effective products will attract customers while company can get
good profits. This will help organization to rise in market by defeating the competitors
(Zhang, et al., 2016).
3. Scope Strategy: This strategy defines the scope of the business which is around the globe.
This strategy is to compete with all markets rather than competing with local are market,
any regional area market or national market. When a business becomes online then the
internet’s global reach and universal standards can assist businesses in becoming global
competitors. Like every E-commerce website has their own global presence and competing
with each other to become top business company world-wide.
4. Focus Strategy: This is a market niche strategy. This strategy is to compete within a
narrow market area which can be local or regional market. This strategy is a specialization
strategy which makes a business as a prime provider in narrow market area. There are
many examples which are based on local area. Every business has some capabilities that
enables a focus strategy for the organization. This strategy includes customization of
products based on requirements of a particular area (Mahmood, et al., 2017).

5. Customer/Supplier intimacy Strategy: Mostly E-commerce websites relies on customers.
This strategy focuses on developing the customer bonds. When a company have strong
relationship and trust with the customers then it will be easy to switch the product’s or
service’s cost according to the competition. This will enhance the company’s competition
advantage. For example, an e-commerce website has customer details on basis of last
activity so that customers can shop in one-click. This also builds trust in customers (Wang,
et al., 2016).
This strategy is the most relevant to our e-commerce website. There are many competitors
in market for example Amazon, Flipkart etc. We should provide unique and cost effective
products to build trust within customers in market.
Figure 1: Business Strategies

Section 2
E-commerce Business Models
A business model is set of planned business resources to get maximum profit in market. In some
cases, business model and business strategies are very close but business model always takes into
the account of the present competition and competitors in the market. This business model is the
center of a business plan. A business plan is a document which contains the description of
organization’s business model. For our e-commerce website the business model will be used for
extracting the unique qualities of web platform and mobile platform over the internet (Wang, et
al., 2016).
There are basically eight key elements of a business model which can be use in any arena of
business. These are value proposition, revenue model, market opportunity, competitive
environment, competitive advantage, market strategy, organizational development, and
management team. We are going to discuss about three best and Business models.
Figure 2: Key elements of Business Model

1. Value Proposition: Value proposition defines how the products and services of
organization going to fulfill the customer needs. And the customers are very important part
of any business so Value proposition is the heart of the company’s business model. So to
develop or discover the organization’s value proposition we need to know about the
customer needs and some unique elements or products what other companies do not or
cannot provide to the customers. According to the customer’s point of view for every E-
commerce firm a successful value proposition includes personalization and customization of
the products they are buying, reduction of costs or sale on occasion basis and good delivery
and return policy (Wirtz, et al., 2016).
Our E-commerce website includes footwear and apparel of both men and women so value
proposition of this website includes the customer’s needs and expectations like cost and
variety of the footwear and clothes/apparel. Like every footwear and apparel should have
different possible sizes so that everyone can buy it. T-shirts and other clothes can be
customizable for designs. And If a product will out of stock then there will be a reminder
section so that who wants to buy the same can get the notification when it will be available.
We can manage sale for the products on occasion basis.
Figure 3: Value Proposition Canvas
(Source: Medium, 2019)

2. Revenue Model: This is also called as financial model. Revenue model of an organization
describes how company will get revenue, maximum profits and return of investments.
Profits are not the only goal to make company successful. The goal of any business to
generate both profits and return on the invested capital because these return are the source of
further investment (Saridakis, et al., 2018). A company must have returns higher than other
investments, if a company fails in this cannot stay in market for longer. There are many e-
commerce revenue models. A company can rely on one model or can use combination of
more than one models. Different organizations have different types of revenue models
which is suited for them. Like content and services website, selling website etc. The major
and most used revenue models are:
 Advertising Model: The company which provide content services have power to
retain customer’s attention that makes them to stick on the website. And this makes
good revenue from displaying advertisements (Schüritz, et al., 2017).
 Sales Model: E-commerce websites derives great revenue by selling products.
 Subscription Model: Many content services providers charge a subscription fee
for accessing the content this will increase revenue.
 Transaction fee Model: Some companies charge fee for enabling a transaction.
Like a chargeable online auction marketplace for sellers.
 Affiliate Model: Companies that receive any referral fee or some part of resulting
fee will follow this model.
Our E-Commerce website will follow sales model for the better revenue. Because this
model is for the companies who sells products and services. And our website is for
Footwear and apparel which will connect to the customer and how many products were
bought the company’s revenue will depend of this. To increase the revenue, the variety of
products should be increased. Our company can also follow advertising model to increase
the revenue (Remane, et al., 2017).
Figure 4: Online Revenue Generation Models
(Source: yo-kart.com, 2019)

3. Competitive Environment: Competitive environment for an e-commerce company means
other companies selling similar products and services and operating the services on same
market space like a website (online market) can give competition to other website.
Competitor environment depends on several market factors like how many active
competitors are there, how they are establishing the trust in market, how much market share
they have, how large their operations in market and how they earn maximum profit with
superior revenue. Competitors may have direct and indirect competitors (Akter & Wamba,
2016). Direct competitors for e-commerce company scenario sell same products and
services in same marketplace. They can build their company from gaining more interest of
customers. Like Shein.com and Ajio.com both sell men and women apparels and
accessories. So in a way their products are identical. They have to work more on their
product’s variety to defeat each other. On the other side indirect competitors are the
companies which are working in different industry area but their products and services
substitute one other. Like Different software companies and mobile manufacturing
companies compete indirectly because they offer customers or users alternative means of
communication, socialization and other services.
Analysis of competitive environment is necessary to establish a successful company because
if there are many competitors in market then it will be very difficult to become different
from others with great profit or if there are very less competitors in market then that niche is
not acceptable by customers and making profit will be very difficult (Yu, et al., 2017).
E-commerce websites are in Boom among youth. So competition will be very high for our
company but if this company will be successful in gaining trust of customers then it will
give superior profit. And it can be possible by choosing the right business model and
business strategy.
Figure 5: Competitive Environment Challenges
(Source: Sites.google, 2019)

Section 3
Online Marketing and Advertising Tools
When a business is going to live on internet and the marketing is necessary to introduce the
company in market among the customers. Companies almost spend 20% of their earning on
online advertising which includes various tools of advertising and also various platforms
(Järvinen, et al., 2015).
Figure 6: Online Advertising Ratio
Online advertising provides personalization for every ad which fit the needs, interest and value
for each customer. There are many pop-ups and emails containing ads that are of very little
interest of user and he wants to skip that but reality is very different because advertisement
companies provide better opportunity and great relationship with customers. There is a drawback
of advertisement that sometimes it provides less benefits in higher cost. There are basically six
popular online marketing and advertising tools for attracting the e-commerce users-
 Search Engine Marketing (SEM)
 Display ad Marketing
 Email and Permission Marketing
 Affiliate Marketing
 Viral Marketing
 Lead Generation Marketing

Our E-commerce business can use all of the mentioned tools in different ways but there are two
tools which are totally relevant to our business and this were totally help to grow our business.
1. Search Engine Marketing (SEM): Search engines like Google are the biggest platform
for Online marketing and advertising. Both Search Engine Marketing and Search Engine
Advertising are the different but similar things. SEM refers to use of search engines to
build the brands and productivity. And SEA refers to use the search engines to increase
the direct sales (Aswani, et al., 2018).
Search engine marketing can be very helpful for our e-commerce business as it gives
boost to the business and its popularity. There are some benefits and challenges as well in
applying this tool for the marketing of our business.
Main benefits of search engine marketing-
 It will work as instant awareness for our business in Search Engines.
 It will give market competition information.
 It will help in generating great revenues (Yang, et al., 2015).
Challenges of search engine marketing-
 This will be long term investment for our business.
 This tool has less controls.
 Some factors are unknown for everyone.
2. Email and Permission Marketing: E-mail messages are sent to the interested users
directly, called direct e-mail marketing. This is the most effective way of online
marketing and advertising. Direct e-mails are only sent to the opt-in users. Opt-in users
are the one who showed some interest in some ways to the company. Every opt-in user
has an unsubscribe or opt-out option in their mail section to the direct e-mails. This
marketing tools works at its best because almost all the users check their e-mails
everyday on their smartphones (Reimers, et al., 2016).
Main benefits of Email Marketing-
 This is permission based marketing.
 It is scalable to in less time we can target large audience.
 Emails are shareable so gives double profit.
Challenges of Email Marketing-
 These mails are mostly spam so it will irritate users.
 Some mails are undelivered (Hartemo, 2016).
 In emails we can face size issues for attachments or content.

Conclusion
Our Fusion.com website is going online. In this report we discussed about the business model
and business strategies. Because every business needs a business strategy to achieve the goals
and a business model to follow the goals we want to achieve. Business models have many key
elements which can be used to elaborate business encouraging steps. This business is of footwear
and apparel so we need to be updated with the customer’s choices so that we can provide variety
of the products this will help to grow online business and trust in customers. We also discussed
about Online advertising and marketing tools which help our business to establish in online
market and gain the popularity among e-commerce users.
Recommendations for the E-commerce website-
 This business is e-commerce online business which includes the potential customers and
relations with them. So to grow the business we need the full trust of the customers.
 To gain the trust we need to follow the best business strategy which is explained above so
that we can achieve the long-term goals.
 Follow business models and its key elements.
 Use the best online advertising tools for the advertisement of our online business so that
it can be popular among the online users. These tools are used to grow e-commerce
business for example we see and click on ads of other e-commerce sites like Amazon,
Ajio, Flipkart etc. this will give them superior revenue and maximum profits. And they
are improving their business day by day.

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