E-Business Environment and Strategy Report for Fortnum & Mason

This report provides a comprehensive analysis of e-business strategies for Fortnum & Mason (F&M). It explores the e-business environment, including political, economic, social, technological, and legal factors, along with micro-environmental influences like competitors, employees, and consumers. The report details the benefits and barriers of e-business for F&M, addressing issues like product information, online purchasing, and cost reduction, while also highlighting challenges such as website security and setup costs. It examines security and legislative issues, including malware, data theft, and trademark concerns. Furthermore, it discusses various communication modes like electronic money transfer, EDI, and FAQs. The report also covers internet technologies such as HTML, IP addresses, and packet switching, and explores different e-business revenue models. Finally, the report delves into good website design structure and its impact on e-business, as well as issues related to website usability.

INTERNET AND E-
BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 E-business environment and various types of e-business transactions............................1
1.2 Barriers and benefits to e-business of F&M.....................................................................2
1.3 Security and legislative issues to be faced by the online business of F&M.....................3
1.4 Different modes of communication available for e-business...........................................4
TASK 2............................................................................................................................................5
2.1 Internet technologies and their importance in e-Business................................................5
2.2 The main features of HTML.............................................................................................5
2.3 Functions of client servers and browsers as well as the role of search engine.................6
2.4 Use of intranets and extranets within business communications.....................................7
TASK 3............................................................................................................................................8
3.1 E-business Revenue models.............................................................................................8
3.2 Comparison of two revenue models.................................................................................9
3.3 Future developments in e-business revenue models........................................................9
TASK 4..........................................................................................................................................10
4.1 Good Website Design Structure.....................................................................................10
4.2 Impact of Website on E-business...................................................................................11
4.3 Issues related to Website Usability.................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
Illustration Index
Illustration 1: Company's Prototype .............................................................................................11

INTRODUCTION
Internet has changed the way of doing business and it has generated many advantages for
various companies in the world. It has provided advancement in technology which is a benefit
for all the internet based businesses. E-business is the process of exchanging data or information
over the internet while taking orders, placing orders or interacting with others. It is a concept of
using advanced technology in order to improve business operations and activities. This basically
considers managing and controlling the internal functions of human resources, financial and
administration systems as well as external functions like sales and marketing, customer service,
distribution of goods and services (Andreu and et.al., 2010). Fortnum and Mason (F&M) is the
most luxurious departmental store in the world that provides treasure trove of hampers, tea,
coffee, chocolates, wines and sweet treats. The report is concerned with e-business and its
models which are useful for the company to expand its business.
TASK 1
1.1 E-business environment and various types of e-business transactions
New business strategy of F&M is to expand its commercial activities in the domestic and
international market. So, it is necessary to analyse environment condition in which company is
likely to conduct its business. Information about the market condition and environmental factors
can be analysed through Pestle analysis. Specified factors included in it are as follows: Political: It consists of several legal frameworks but for F&M, legal norms regarding the
pricing regulation are the main factors which can affect its E-business market. Economic: This factor generally impacts the purchasing power of customers and leads to
influence the demand of home-made products made by the company (Ifinedo, 2011).
However, factors like rising pay scale, unemployment rate, interest rate, etc. can also
influence the business of F&M Company. Social: Elements like changing preferences of society, likes & dislikes of targeted
customers, social beliefs etc. are the main reasons which can affect the market of F&M. Technological: There are many innovative systems that are available in the market
which require less investment to advance e-business of F&M in an easier way.
1

 Legal: Legal framework formed by the government is based on various rules like
consumer law, employment regulation, health and safety, product regulation etc. which
are highly responsible to influence the business of F&M (Gloor, 2012).
In addition to this, micro environmental factors help in assessing the market condition for
running the business of F&M in a smooth manner: Competitor – It is necessary for F&M for determining the level of competitiveness and
for having the ability to compete in the market. Employees – It refers to the skills and abilities present in an individual that would
enhance his/her performance while performing business operations.
 Consumers – The changing tastes and preferences of consumers affect the buying
behaviour which has a direct relation with the demand of products.
1.2 Barriers and benefits to e-business of F&M
There are various benefits and barriers that F&M can face during the process of
expanding its business through e-business. Benefits of e-business are:
◦ Product information – By adopting the method of e-business, company gets an
advantage of providing a brief knowledge about the product's information on the
company's websites which can be easily addressed by the customers.
◦ Online purchase – It gives an option to the customers to purchase and make
payments for the company's product on their online websites.
◦ Ease-access –Process of expanding business through internet provides low cost
platform which will help F&M to establish their website where they can provide a
source to their customers for purchasing products.
◦ Reduces customer search cost – E-business is generated on internet that helps in
saving time and money of customers which they spend on searching appropriate
products and services in the market (Janita and Chong, 2013). However, with the help
of digital technology, consumers can easily access effective information about the
F&M's products and services which are provided in the market.
◦ Reduces cost of transaction – For F&M Company, internet option will help in
reducing the cost of transaction which is faced by the company. It eliminates the
2

sources like inequalities in getting information and creates a new level of
coordination with independent processes like designing of product packaging. Barriers of e-business are:
◦ Jamming of Web sites – Company's generally faces drawback of failing because of a
boost in visitor traffic on the internet just after a peak-hour TV advertising campaign.
◦ Threat of hacking the websites – It is ascertained that the threat related to the hackers
which can easily penetrate in the security of the company's system and steal all the
credit card details of the customer’s acts as a barrier for implementing e-buiness.
◦ Set up cost - Amount charged by the internet for setting up a new business acts as a
main barrier for F&M. It affects company to expand its business on the internet
(AlGhamdi and et. al., 2012).
◦ Effects on staff - By the use of internet, company introduces process of changing
technology and continuous investment. Further, company introduces new training and
development sessions for the staff which works as a threat to them.
◦ Changing activities – Procedure of e-business and internet includes various activities
which bring rapid change in the technology. This creates many problems that lead to
several issues like necessity to adopt changes in the technology, consumer behaviour,
organisation processes, etc. It increases the level of competition for F&M at the
global level.
1.3 Security and legislative issues to be faced by the online business of F&M
Internet business of F&M will face many security related threats which may influence its
business in the international market. It includes the issues related to the following aspects: Malware and viruses – The impact of malware that creates problems and reduce
efficiency during online transaction process will highly affect the business of F&M.
Company should follow some security rules and need to create a security wall on the
internet in order to avoid such issues.
 Physical data thefts – It includes the stealing of company's data from their computers. It
affects the business of company as the option of recovering whole data or information is
not always available. For overcoming such threats, company needs to implement strict
security changes and layers of safety checks.
3

Similar to this, legislation issues related to F&M's internet policies deal with the
trademark issues and copy right infringement risks. It includes the issues like:
 Consequences of legal protection laws – The uniform state laws over the digital signature
and encrypt legislation can impact the business of F&M while selling its products in the
respective market. The recommendation in order to overcome such threats of risk is that
company should consider these security practices to make e-commerce and e-business
activities simpler, safer and more reliable (Davies and Shorey, 2010). F&M is a company
that deals in luxury goods so it should prepare strong plan to overcome malicious threats
like stealing of information from the computer. However, they should use password to
secure their wireless networks.
1.4 Different modes of communication available for e-business
There are various modes of communication which are available for a company to use in
e-business. But, effective communication methods for F&M are as follows: Electronic money transfer: This is the best method which is used to exchange the money
by the help of electronic medium i.e. from one account to other account. It supports the
company in a way of transferring funds from a particular bank to another bank or in
between other different institutions via computer system (Barnes and Hunt, 2013). Fixed and portable devices: Fixed devices such as personal computers, desktops etc. and
portable devices like mobile, tablet, laptop, wireless codes etc. It helps the company to
share the internal and external information of the organisation. EDI: It is an electronic medium of interchanging the data in which electronic
communication medium is used to exchange the data in standard formats. Considering
this case, it will assist the company to share its information with the market and
workplace and with other organization which is outside the country.
 FAQ: It is termed as Frequently Asked Questions that helps the consumers to get fruitful
solutions for their queries related to the products and services. This assists F&M
Company to build and improve a high brand image and loyalty among all consumers.
Further, it helps in attaining a strong brand positioning.
4

 Emails: It is the most common method used by customers in order to get an appropriate
answer for all their questions. It is helpful when a consumer faces issues with the
products of F&M. Also, when an individual likes to return a product then he is supposed
to email the firm for mentioning the reasons of returning products. This makes a direct
communication between consumers and company.
TASK 2
2.1 Internet technologies and their importance in e-Business
Internet technologies that F&M can use to expand its business in the international market
are intranet, extranet, client server system, wireless communication, packet switching system and
electronic fund transfer (Bélanger and Crossler, 2011). F&M can also use extranet to create its
own private network in order to share their confidential information in a more secure way
(TCP/IP Protocols, 2016). However, TCP/IP, HTTP, database HTML/XML and WEB
application server technologies will be more advantageous and generate new sources of
opportunity for the company in setting up its IT infrastructure in order to make its e-business
successful in the emerging market. The two suggested technologies are: IP address: It is a set of codes which helps in identifying a particular computer address.
In the situation where the sellers and buyer are connected for the online business or any
online transaction than it is essential to find the IP address of destination computer.
 Packet switching: Adopting the option of packet switching will be more beneficial for
the company to exchange messages over the internet. It can also be used for setting up an
upgraded connection between business partners and then they will be able to send higher
data files within limited time. By adopting this technique, many employees from different
countries can login and use the company network at a same time. Apart from this, EFT
and EDI techniques will be helpful ways for the company to exchange data online and
transfer fund in secure mode.
2.2 The main features of HTML
Hyper Text Markup Language is an internet based language which is used while
designing the web pages. It is also referred as a set of mark-up tags or HTML documents that
are represented by HTML tags (Banerjee and Dash, 2011). Each HTML tag describes about
different information of some different documents. Main features of HTML are:
5

 Canvas: By using HTML, it provides advantage of manipulating the image, video or
graphics very easily to the web developers. It is an advanced technology that saves the
time and cost for a company. Application cache: It is a set of functions which provide the facility of storing more
information in system of user computers. Web workers: This feature helps web-page holder to insert new content or alter actual
information on the website without affecting the working of web pages.
 Video element: This is an advance feature of HTML through which company needs to
take any permission from third party for uploading or downloading a video. It makes the
process of uploading a video as simpler as the process of uploading an image (Mawere,
2011).
The HTML code:
Document coding structure of HTML
<! DOCTYPE html>
<html>
<head>
<title> Page Title</title>
<head>
<body>
<h1> My first heading </h1>
<p> My first paragraph</p>
</body>
</html>
2.3 Functions of client servers and browsers as well as the role of search engine
Client-server architecture is of two types which include two tier and three tier
architecture. Three-tier architecture is more beneficial for F&M rather than two tier architecture.
In this method, client layer can be used to design front web-page of the website. The functions of
client server and browsers are:
6

 This layer is used to specify the text box, labels and images that are essential to load the
contents of website.
 Business layer is useful for the company in fast and easy accessing of data for making
strong connection with the clients and data layer (Boone and Kurtz, 2011).
 Data layer can be used by the firm to store and secure the information of their customers,
business partners and employees. Main attribute of web-server is to gain browser abilities
and data storage.
The functions and roles of search engine are specified as browsers like Firefox and
Google Chrome are used to exchange the information from server. In addition to this, other roles
of search engines are:
 They are employed as a mediator in between clients and servers.
 Their purpose is to send/receive information from the server, store information as well as
create interaction between clients and servers.
 Browsing the internet websites, indexing for searching specific content on the Internet
and storing some information are also the roles of search engines.
 They help the user in searching information and in downloading the required data from
various websites of company.
2.4 Use of intranets and extranets within business communications
Intranet
F&M can adopt the use of intranet to share information about their products and services
with the customers including product’s images, categories, price range, stock availability and
various payment methods for purchasing the products. It will also assist the firm in maintaining
information of their customers, suppliers and stores. However, it is useful for getting feedback
also as it provides options to the users for commenting their reviews and giving
recommendations for the products (Romero and Sánchez, 2013). By using this, company is able
to improve its business operations and to maximize its sales as well as profits.
Extranet
Main uses of Extranet for F&M are that at first, it tests the practicality of web-page
before going on internet and secondly, it accesses the network services of company like ordering
7

information, customer support service, product pricing and solving client’s queries in an
innovative manner.
Advantages of Extranet are:
 It improves the processing and production condition of company.
 It is an easy mode of connecting with the outside people in a short duration.
 It has a simple process of updating information.
 It reduces the paperwork.
 It improves the level and quality of customer services.
 It helps in lowering the administrative and other costs.
TASK 3
3.1 E-business Revenue models
Various e-business models that F&M can use to gain more revenue and sales from its
business operations are as follows: Advertising model - It is a model that works as a new source of generating more revenues
for the company. In this model, business entity has to place their commercials or
advertisement on different websites and social media. Subscription model: In this model, it gives F&M an opportunity to acquire a large
market portion in online business by adding one more attribute in the website which is
known as subscription. In this process, when user logins the company’s website than he
has to pay subscription amount every month. So, it can be raised as a source of revenue. Affiliate model –In this model, company pays commission to the seller for performing
their actions in online business. It is a specific function that is used to secure the
company's sales as well as payment methods (Andreu and et.al., 2010). However, this
model needs three communicators: advertiser, company with their products and
professional (person who increase the sales).
 Transaction fee: It is also an effective method for gaining the revenue for F&M
Company. F&M can hold a tie up with some particular banks for increasing their benefits
from the transaction fee. So, at the time of payment, company can increase revenue
commission in the manner of transaction fee. This method is about the same margin of
8

the online transaction that helps the company in gaining more income by adopting such
processes.
3.2 Comparison of two revenue models
Similarities in both the revenue models are:
Advertising Model Subscription model
In this model, company can prepare the content
of advertisement so that it can easily reach
target customers. It highly focuses its attention
on providing better information to all the
customers.
In this model, A2Z Company makes the
subscription page or link to access more about
the products and services of the organization. It
directs its efforts on attracting the customers by
giving fruitful information.
Differences between both the models are:
Advertising Model Subscription model
In this model, company is required to prepare
an advertisement as per their product content
so that it can easily reach the target clients.
Hence, it is necessary to be creative and
innovative that helps customers to understand
the advertisement message. Various ways of
advertising are television, radio, direct mailing,
yellow pages directories, internet etc. These
mediums are less expensive and help in
strengthening the company (Ifinedo, 2011).
As per this model, F&M can make a
subscription page or link for the customers to
attain extra information for the products and
services offered by the company. After the
process of making account on website, they
have to subscribe the company page for
accessing product’s information. Subscription
accounts should be renewed in every year by
paying specific amounts. Thus, company can
generate extra revenue from their consumers.
3.3 Future developments in e-business revenue models
IBM V7.0 model that assists next generation B2B and B2C e-commerce solutions and
adds new dimensions for the business will be beneficial for the company to improve its business
practices. In the future time period, digital devices like mobile phones, social media networking
sites including Facebook, twitter and you-tube will be beneficial for the company. They can be
useful for developing new e-business models to modify their service delivery processes, reduce
cost, raise efficiency as well as productivity of the products etc. (Ricci, F., 2011). Virtualisation
9

and outsource related functions will be advantageous for the business model to execute online
transaction in more quick and accurate way. Revenue model, Price model and Marketing model
can be added in e-business models to sort virtual environment and establish direct
communications between firms, suppliers and customers. Content subscription model will be
beneficial for the company in terms of providing high quality continuous content and super high
speed internet access for 24*7. Revenue is generated by adopting an effective revenue model
among all the specified and then implementing it to the current business operations and activities
of company.
TASK 4
4.1 Good Website Design Structure
In order to develop websites for F&M, following elements will be taken into account: Title of the page: Here, F&M can adopt six headings that cover metadata. <H!> code is
used for denoting first heading. It is necessary for website and company to apply logo
with hyperlink from home page (Gloor, 2012). Keywords: F&M can use the method of advertising by using keywords like gift shops,
homemade chocolates, biscuits, cookies, etc. so that they can focus on search engine
optimization (SEO) for increasing traffic on the websites. Main Body: It is termed as the main part of website that covers information related to
products, its images, delivery information, price and other related. Navigation: Company also needs to ensure easy navigation by giving option for the same
on homepage. In below prototype, categories for gift act as navigation and are placed at
left and top of the homepage (Jabbour and et.al., 2011).
 Meta-tags: These are the snippets of text that aids in describing the content of websites. It
will help cited company in gaining attention from different customers.
10

Illustration 1: Company's Prototype
Birthdays Anniversary Flowers Cards Personal Gifts Occasion Gifts
Gift By
Categories
FORTNUM & MASON FIND RIGHT
GIFTS FOR
YOUR
LOVED
ONES
Chocolates
Home &
Living
Electronics Relationship
Wedding Date
It is examined that this type of layout is highly beneficial for the customers for searching
their product while shopping gifts from the company's website. It provides assistance to the user
for selecting the best gift for their loved ones in a easy way.Another crucial element that is
inevitable to be considered by cited company is supporting each browser so that they can be able
to reach large number of customers. In this context, resolution for webpage must be 1024x768
pixels so that it can adjust each element of websites precisely.
4.2 Impact of Website on E-business
Through well designed website, company can able to offer varied set of products in a
systematic manner. This certainly offers convenience to customers and helps in identifying
products with ease. Moreover, customers can able to filter product based on price, discount,
availability, size and other related filters through which ultimate search of customers ends
(Hwang and Lu, 2013). This will support F&M in re-transferring more number of potential
customers into prevailing customers. Further, cited company needs to display clear image and
price of products on websites in order to make proper buying decisions. Well-designed websites
essentially increase the foot fall of customers and influence them to visit again and again.
Besides this, F&M requires to focus on effective visualization as well because it is directly
related to buying behavior. In addition to it, company also needs to ensure that online transaction
is safe and secure. For this, it can take support from the website that ensures safe transaction
(Combe, 2012). This in turn will assist in developing trust among individuals. At the time of
11

designing of website, company should keep in mind that the online transaction must be safe and
secured. It will help in building trust with the customers and in increasing reputation in the
market. Along with that, it will also help company in making the market survive and to run the
business successfully. Company has to maintain a strong long term relationship because it will
lead to increase the sales and profits of company.
4.3 Issues related to Website Usability
Following are the issues related to website usability:1. Browser Incapability: Many a time, customers face that websites doesn’t open on
Smartphone and this certainly shifts the customers to other gift shop websites.2. Poor Image and Formatting: Issues related to poor image and formatting of text affect
the buying decision of customers. It is required that company must upload high resolution
image to get rid from the issue of blurring (Davies and Shorey, 2010).3. Poor readability and too much text: Availability of over content on website makes it
difficult for users to read content effectively due to small font size or irrelevant font type.
It is a serious issue that needs to be addressed immediately. Further, cited company also
requires placing relevant content and must avoid placing too much text.
4. Overuse of Ads: By placing too much ads on home page, customers get confused and they
might shift to other websites.
Company needs to implement various changes and steps to overcome some issues by
considering the market condition and position of firm at the marketplace.
CONCLUSION
Based on this report, it has been found that F&M has been possessed huge potential to
grow by developing online platform. It will help the company in trading with customers across
borders which will tend to increases the market share. There are different e-business models such
as B2B and B2C that can be used for boosting the overall growth. It is even found from this
study that company needs to develop well designed website by placing appropriate title, body
and navigation tab. This aids in influencing customers to visit again and again.
12

REFERENCES
Books and Journals
AlGhamdi, R. and et.al., 2012. Factors influencing e-commerce adoption by retailers in Saudi
Arabia: A quantitative analysis. International Journal of Electronic Commerce Studies.
3(1). pp. 4-10.
Andreu, L and et.al., 2010. An analysis of e-business adoption and its impact on relational
quality in travel agency–supplier relationships. Tourism Management. 31(6). pp.777-787.
Banerjee, S. and Dash, S., 2011. Factors influencing scope and acceptability of E-detailing as a
pharmaceutical marketing communication tool in emerging economies like India: Views
of the company personnel. International Journal of Pharmaceutical and Healthcare
Marketing. 5(2). pp.153–168.
Barnes, S. and Hunt, B., 2013. E-commerce and v-business. Routledge.
Bélanger, F. and Crossler, R. E., 2011. Privacy in the digital age: a review of information privacy
research in information systems. MIS quarterly. 35(4), pp.1017-1042.
Boone, E. L. and Kurtz, L, D., 2011. Contemporary Business. John Wiley & Sons.
Bordonaba-Juste, V., Lucia-Palacios, L. and Polo-Redondo, Y., 2012. Antecedents and
consequences of e-business adoption for European retailers. Internet Research. 22(5).
pp.532-550.
Combe, C., 2012. Introduction to e-Business: Management and Strategy. 1st Ed. Routledge.
Davies, C. and Shorey, M. 2010. Applied Business: AS for Edexcel (Resource Pack). Collins
Educational
Gloor, P., 2012. Making the e-business Transformation. Springer Science & Business Media.
Hwang, N. B. and Lu, T., 2013. Key success factor analysis for e-SCM project implementation
and a case study in semiconductor manufacturers. International Journal of Physical
Distribution & Logistics Management. 43(8). pp.657 – 683.
Ifinedo, P., 2011. Internet/e-business technologies acceptance in Canada's SMEs: an exploratory
investigation. Internet Research. 21(3). pp.255-281.
Jabbour, S. and et.al., 2011. Relationships between company size, production system and supply
chain: Evidence from electro-electronics sector in Brazil. Journal of Advances in
Management Research. 8(1). pp.30–52.
Janita, I. and Chong, W.K., 2013. Barriers of b2b e-business adoption in Indonesian SMEs: A
Literature Analysis. Procedia Computer Science. 17. pp.571-578.
13

Mawere, M., 2011. Moral Degeneration in Contemporary Zimbabwean Business Practices.
African Books Collective.
Romero, M. and Sánchez, A., 2013. Viral marketing through e-mail: the link company-
consumer. Management Decision. 51(10). pp.1970–1982.
Online
Ricci, F., 2011. Internet Technologies. [Pdf]. Available through:
<http://www.inf.unibz.it/~ricci/IT/slides/1-www.pdf>. [Accessed on 16th March 2016].
TCP/IP Protocols. 2016. [Online]. Available through:
<http://ps-2.kev009.com/wisclibrary/aix52/usr/share/man/info/en_US/a_doc_lib/
aixbman/commadmn/tcp_protocols.htm>. [Accessed on 16th March 2016]
14