Business Model Analysis of E-Commerce Systems - De Montfort University

This report provides a comprehensive analysis of e-commerce systems, starting with a SWOT analysis that examines the internal strengths and weaknesses, as well as external opportunities and threats. It further delves into Porter's Five Forces model to assess the competitive landscape, including the intensity of competition, the potential for new entrants, the power of suppliers and customers, and the threat of substitute products. The report also addresses the importance of cultural change within organizations, emphasizing the need for leadership support, behavioral adjustments, open communication, leading by example, and employee empowerment to foster trust and relationships. This analysis aims to provide a holistic view of the factors influencing e-commerce systems and strategies for navigating the challenges and opportunities in the industry.

Running head: E-COMMERCE SYSTEMS
E-Commerce Systems
(Business Model Analysis I)
(De Montfort University)
Name of the Student
Name of the University
Author Note:

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Table of Contents
Part -1...............................................................................................................................................2
SWOT analysis............................................................................................................................2
Internal Factors............................................................................................................................2
External Factors...........................................................................................................................2
Elements of SWOT Analysis.......................................................................................................2
Strengths......................................................................................................................................3
Weaknesses..................................................................................................................................3
Opportunities...............................................................................................................................4
Threats.........................................................................................................................................4
Part- 2...............................................................................................................................................5
Competition in the Industry.........................................................................................................6
Potential of New Entrants into an Industry..................................................................................7
Power of Suppliers.......................................................................................................................8
Power of Customers.....................................................................................................................8
Threat of Substitutes....................................................................................................................8
Part -3.............................................................................................................................................11
Cultural Change Needs to Start at the Top....................................................................................11
2. Identify and Change the Behaviours......................................................................................11
3. Don’t be Afraid to have Difficult Conversations..................................................................12
4. Lead by example....................................................................................................................12
5. Motivate and Empower Employees to Build Relationships and Trust..................................12
References......................................................................................................................................13

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Part -1
SWOT analysis
An acronym for strengths, weaknesses, opportunities and threats, a SWOT analysis is a
detailed compilation of a business's most predominant internal and external factors to consider
during the decision-making process (Bull et al. 2016). Often used to determine the profitability
of hiring new employees, introducing new products or services, moving forward with new
projects, and expanding a business by opening additional locations, SWOT analysis can be
helpful in making difficult business decisions that concern the risk of losing investments.
To simplify the information examined through this method, the four pillars of SWOT can
be divided into internal and external factors. Internally, strengths and weaknesses are changeable
factors that are directly controlled by the company, while externally, opportunities and threats
exist outside of the company's control.
Internal Factors
Referring to a company's achievements, strengths and weaknesses included in a SWOT
analysis can be any aspect of a business that has contributed to or minimized success (Bohari,
Hin and Fuad 2017). Depending on the type of industry and the business's financial goals, a
SWOT analysis can base strengths and weaknesses on a variety of profit components.
External Factors
Unlike the internal issues, opportunities and threats are primarily dictated by the
economy, advancements in technology, consumer interests, competition and other contributors
that are beyond the company's control.
Elements of SWOT Analysis

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De Montfort University examine the strengths, weaknesses, opportunities and threats of
their company, they must first identify them. Because the type of business, its financial state and
plan for the future are all important factors to acknowledge when creating resolutions, these
pillars can include fluid information (Phadermrod, Crowder and Wills 2019). The following are
SWOT analysis examples that may serve as a helpful reference when considering this method for
your own decision-making strategies.
Strengths
 Our people and their shared focus on student success
 A wide range of academic programs, many with national accreditation
 A diverse and vibrant student body and campus community
 A reputation as an international university and our strong international connections and
partnerships
 Our Husky Compact that defines our shared educational values
 Strong and established partnerships within our community
Weaknesses
 Declining enrolment due to changing demographics, increased competition and some
programs that lack clear career alignment
 Lower than expected student success outcomes, including student learning, retention and
completion
 Lack of a brand and strategic marketing and communications strategy
 Universities make us slow to respond to internal needs and external opportunities
 Uneven engagement across students, campus and community – both within and across

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 Inadequate resources for facilities, equipment and recruitment and retention of quality
staff
Opportunities
 Growing public interest in educational value and transparent pricing
 Expanding non-traditional market, including baccalaureate completion in the Twin Cities
 Expanding partnerships and engagement opportunities within our communities
 Location on the river and along the growing I-94 corridor
Threats
 Regional and online competition for students
 Stagnant state investment in higher education
 Decreased family buying power and high rate of unmet financial need
 Higher education’s current role in society is less valued while expectations are rising

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Strengths Weaknesses
 Good interpersonal skills
 Motivated
 Good team worker
 Organized – meet targets
 Leadership skills
 Try to do too much at once
 Find uncertainty quite
difficult to manage
 Can be too single-minded
Opportunities Threats
 Good position at work
 Commitment to further study
 Support from work for further training
 Supportive family
 Balancing work and home
 Uncertain commercial
market, especially in IT
 What are the priorities?
Part- 2
Porter's Five Forces is a model that identifies and analyzes five competitive forces that
shape every industry, and helps determine an industry's weaknesses and strengths (Abdel-Basset,
Mohamed and Smarandache 2018). Frequently used to identify an industry's structure to
determine corporate strategy, Porter's model can be applied to any segment of the economy to
search for profitability and attractiveness.
Porter's Five Forces is a business analysis model that helps to explain why different
industries are able to sustain different levels of profitability. The model was published in

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Michael E. Porter's book, "Competitive Strategy: Techniques for Analysing Industries and
Competitors" in 1980. The model is widely used to analyse the industry structure of a company
as well as its corporate strategy (Gürel and Tat 2017). Porter identified five undeniable forces
that play a part in shaping every market and industry in the world. The forces are frequently used
to measure competition intensity, attractiveness and profitability of an industry or market. These
forces are:
1. Competition in the industry;
2. Potential of new entrants into the industry;
3. Power of suppliers;
4. Power of customers;
5. Threat of substitute products.
Competition in the Industry
The importance of this force is the number of competitors and their ability to threaten a
company. The larger the number of competitors, along with the number of equivalent products
and services they offer, the lesser the power of a company. Suppliers and buyers seek out a
company's competition if they are unable to receive a suitable deal (Li et al., 2016). When
competitive rivalry is low, a company has greater power to do what it wants to do to achieve
higher sales and profits. This force is the major determinant on how competitive and profitable
an industry is. In competitive industry, firms have to compete aggressively for a market share,
which results in low profits. Rivalry among competitors is intense when:
 There are many competitors;

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 Exit barriers are high;
 Industry of growth is slow or negative;
 Products are not differentiated and can be easily substituted;
 Competitors are of equal size;
 Low customer loyalty.
Potential of New Entrants into an Industry
A university power is also affected by the force of new entrants into its market. The less
time and money it costs for a competitor to enter a company's market and be an effective
competitor, the more a company's position may be significantly weakened. An industry with
strong barriers to entry is an attractive feature for companies that would prefer to operate in a
space with fewer competitors (Gupta and Mishra 2016). This force determines how easy (or not)
it is to enter a particular industry. If an industry is profitable and there are few barriers to enter,
rivalry soon intensifies. When more University compete for the same market share, profits start
to fall. It is essential for existing Universitys to create high barriers to enter to deter new entrants.
Threat of new entrants is high when:
 Low amount of capital is required to enter a market;
 Existing companies can do little to retaliate;
 Existing firms do not possess patents, trademarks or do not have established brand
reputation;
 There is no government regulation;
 Customer switching costs are low (it doesn’t cost a lot of money for a firm to switch to
other industries);

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 There is low customer loyalty;
 Products are nearly identical;
 Economies of scale can be easily achieved.
Power of Suppliers
This force addresses how easily suppliers can drive up the price of goods and services. It
is affected by the number of suppliers of key aspects of a good or service, how unique these
aspects are, and how much it would cost a company to switch from one supplier to another (Culp
III et al., 2016). The fewer the number of suppliers, and the more a company depends upon a
supplier, the more power a supplier holds.
Power of Customers
This specifically deals with the ability customers have to drive prices down. It is affected
by how many buyers or customers a company has, how significant each customer is, and how
much it would cost a customer to switch from one company to another (Rauch et al., 2015). The
smaller and more powerful a client base, the more power it holds. Strong bargaining power
allows suppliers to sell higher priced or low quality raw materials to their buyers. This directly
affects the buying firms’ profits because it has to pay more for materials. Suppliers have strong
bargaining power when:
 There are few suppliers but many buyers;
 Suppliers are large and threaten to forward integrate;
 Few substitute raw materials exist;
 Suppliers hold scarce resources;
 Cost of switching raw materials is especially high.

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Threat of Substitutes
Competitor substitutes that can be used in place of a company's products or services pose
a threat. For example, if customers rely on a company to provide a tool or service that can be
substituted with another tool or service or by performing the task manually, and if this
substitution is fairly easy and of low cost, a company's power can be weakened (Jasiulewicz-
Kaczmarek 2016). This force is especially threatening when buyers can easily find substitute
products with attractive prices or better quality and when buyers can switch from one product or
service to another with little cost. For example, to switch from coffee to tea doesn’t cost
anything, unlike switching from car to bicycle.
Porter's Five Forces Factors
Threat of new entry
 Amount of capital required
 Retaliation by existing companies
 Legal barriers (patents, copyrights, etc.)

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 Brand reputation
 Product differentiation
 Access to suppliers and distributors
 Economies of scale
 Sunk costs
 Government regulation
Supplier power
 Number of suppliers
 Suppliers’ size
 Ability to find substitute materials
 Materials scarcity
 Cost of switching to alternative materials
 Threat of integrating forward
Buyer power
 Number of buyers
 Size of buyers
 Size of each order
 Buyers’ cost of switching suppliers
 There are many substitutes
 Price sensitivity

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 Threat of integrating backward
Threat of substitutes
 Number of substitutes
 Performance of substitutes
 Cost of changing
Rivalry among existing competitors
 Number of competitors
 Cost of leaving an industry
 Industry growth rate and size
 Product differentiation
 Competitors’ size
 Customer loyalty
 Threat of horizontal integration
 Level of advertising expense
Part -3
Cultural Change Needs to Start at the Top
In University’s with low levels of trust, what often happens is middle management has
given up (Phadermrod, Crowder and Wills 2019). They don’t know what to do, or their senior