Sunday, January 25, 2015

CIS1101 Assignment 2

CIS1101 Assignment 2 

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Table of Contents



 CIS1101

Introduction

E-commerce is the buzz word these days in the world. Every day more number of people can be seen doing transactions online. As the market for E-commerce is growing rapidly, it is imperative for any product or service company to have its presence on the web. Any company that sells products or services and does not have ecommerce site tends to lose the market share to competitors who have ecommerce sites on the web (Kapczynski et al., 2009). This essay will advise the strategy that TARDIS should adopt in developing ecommerce site for their travel business.

















Q1.Provide TARDIS Travel with a real world example of each of the major types of e-commerce

Ecommerce is commercial transaction that is digitally enabled. Transactions takes place between and among organizations and individuals. Ecommerce is basically of five types depending upon the participants that are involved within the transaction.
First type of Ecommerce is Business to Business i.e. B2B. Business to Business ecommerce involves transactions between two organizations or businesses. For example, a wholesales selling to a retailer or manufacturer selling to distributor. In Business to business ecommerce seller and the customer is a business organization.


Above two screenshots are the example of Business to Business ecommerce sites.  Ecommerce sites are basically very rich in information and thus in first screenshot one can see the products available and in second screenshot shows specifications of the product. Customer can choose from products and order the exact quantity required. Prices may or may not fluctuate for the ordered quantity of the product. Business to Business ecommerce allows organizations to easily procure materials from the market (Guercio et al., 2014).
               Second type of Ecommerce is Business to Customer i.e. B2C. In Business to Consumer the seller is an organization whereas the customer is an individual. An individual buys a product or service from the ecommerce site of the business organization in B2C ecommerce business. For example Amazon has got lot of products listed on its website from which a person can choose a product of his interest. After selecting a product, the product is put into shopping cart and once all the products are selected, final amount of shopping cart will have to be paid by the customer to complete the transaction (Kuilboer et al., 2002).
TARDIS will fit into Business to customer category as the end customers will be individuals who will travel to a destination of their choice. The seller of the traveling service will be TARDIS and the customers will choose from the destinations that are listed in TARDIS website and will further dig into details of the service in terms of price, stay, hotels etc.


First screenshot shows the list of products and the second screenshot shows the shopping cart with the selected product.
Third type of ecommerce is Customer to Customer i.e. C2C. In this type of ecommerce, an individual sells a product or a service to the other individual through some ecommerce site that provides platform for such transactions. Example of Customer to Customer ecommerce is eBay.



The Ebay site allows individuals to sell the products. In screenshot one can see that for HTC ONE X there are 7 bids till now. The individual with the highest bid will get the product from the seller.
Fourth type of Ecommerce is Peer to Peer i.e. P2P.Here individuals can share anything without the intervention of any market maker. Example of peer to peer ecommerce is Gnutella software application where users can share files, music and videos without any market maker’s intervention.
             Fifth and final type of Ecommerce is M-commerce. Businesses that have presence on the web as an Ecommerce site are going step ahead and creating its business presence on mobile platforms such as tablets, mobiles etc. Mobile commerce has made ecommerce business very popular among the people. It is very convenient for any individual to shop online by just using the mobile. Shopping on mobile can be done while traveling also and this advantage make Mobile Commerce even more popular. However, there are many challenges in having a Mobile commerce site as the dynamics of mobile devices vary in terms of operating system, screen sizes and etc. But once the Mobile commerce is developed by the business then it can get more share of customers in the market (Kotler, 2009).


The above screenshot shows how Mobile commerce site look like.

Q.2 Advise TARDIS Travel on their options for building theironline business in-house with existing staff or outsourcing the entire operation

TARDIS Travel is mainly into the business of travel and tourism. TARDIS does not have expertise in programming and software development. If TARDIS has to develop any website as such then they would need to hire software developers and website developers from the market. However to develop any E-Commerce site the talent and expertise needs to be very high.
                   To hire talent from the market for web developers will incur hiring cost in terms of recruitment. Also company needs to set up necessary infrastructure in terms of assets, tools, software for development of website. As TARDIS is not into software development hence they will need advice from external consultant for set up of necessary infrastructure. Once the set u is done and the website is built then the company will need engineers for maintenance of the ecommerce system. Also for customer support and queries the customer support team will be needed. Hence the approximate estimation is as follows for TARDIS Travel (Miller, 2009).
Activity
Estimated cost
Setting up Infrastructure
10000
Software and Tools licensing
5000
Recruitment of website developers and customer support team
4000
Developers and Testers cost
20000
Maintenance cost
5000 monthly
Customer Support team
8000 monthly
Provision for other costs
5000

If we analyze the cost incurred while developing a ecommerce site for TARDIS then it comes out following.
Total Fixed Cost: - 39000 dollars
Monthly Cost in terms of salary and other costs comes out to be 13000 Dollars. Once the website is built then company can release website developers as in TARDIS can hire website developers on the contract basis and once the Ecommerce is built then contract with developers will end. However in future if new features need to be added then TARDIS will again have to hire developers on the contract.
           If TARDIS wants to outsource the work to avoid the pain of recruiting, developing and maintaining the ecommerce site then it will outsource the work to one of the organization that has expertise in website building, maintaining and provide the customer support for the same. A tender will be floated to fetch Request for proposals from several organizations that have the expertise in Ecommerce website building. The estimated breakup of the cost that will be incurred for the work that has been outsourced is as follows
Activity
Cost ( Australian Dollar )
Website development and Testing
30000
Maintenance and Customer Support  ( Annually)
50000

           It is indeed very clear that outsourcing of the ecommerce website development is the best option for the TARDIS. Also the advantage in outsourcing is that whenever TARDIS has to make any changes or add any features then it can do so by just giving requirements to the outsourcing organization and pay for that. As technology evolves hence the tools might change in future, hence considering all these factors TARDIS should go for outsourcing rather than developing and maintaining the Website in-house( Lockwood et al., 2011).

Q3Identify to TARDIS Travel which approach has proven to be more successful- first mover or follower? Explain why and providetwo e-commerce companies as supporting examples on your position

First Mover in the market has always got the advantage in terms of being new and innovative. However technology is such a thing which can guarantee success only if it is adopted. Adoption of technology depends on many factors such as availability, ease of use, complexity involved and many such factors. Amazon came up first with the idea of selling books online. It came up with model in such a way that people can find the book of their choice and order it online. Since then, Amazon has been a market leader in selling books online. Amazon has been able to capitalize the first mover advantage is selling books. However, the model of selling online was copied by others to sell products and services and since then Amazon has been fighting for market share in selling products and services other than books. The competition is being given worldwide by large as well as small players.
   Ebay has been giving a hell lot of fight to Amazon worldwide in terms of selling electronic devices and other products as well. Although Amazon has lot of patents and copyrights still others have found out a way and has been successful in taking the idea of Amazon of selling online to a whole new level. Companies are not only selling products but also services in terms of consulting, financial, travel and other services as well (Wernerfelt, 1985) .
                      Travel companies such as Expedia has set up an ecommerce site and have been giving tour and travel packages to its prospective customers. Travel companies have been tying up with hotels and targeting particular set of customers depending upon their needs and wants. People can choose the tour package by selecting a range of choices and at times they can also have personalize deals. This makes ecommerce site in a travel industry very attractive and attracts lot of customers.
                       In the world of Ecommerce, traditional companies are losing the business and hence it has become very important for businesses to adopt the ecommerce business model. We can witness this as many retail giants are also moving onto the ecommerce model. Thus first mover advantage is always in there in the market, however it is the followers who bank upon the idea of others and come up with new strategies to fully exercise the potential of the idea set by the first mover. Also followers can make a note of failures that first movers faced and create a business model that not only avoids the failures faced by first movers but also grab the full potential of the idea smartly (Grant, 2003).
                          Hence TARDIS should not be worried about first mover advantage, instead come up with its own Ecommerce website that attracts potential customers by providing range of options (strategized in a smart way) in its Ecommerce site.




Conclusion

Ecommerce is gaining momentum in almost every industry in the world. It is imperative for organizations who sell products and services to have business presence online.TARDIS should outsource the website development activity to some organization which is expert in developing and maintaining ecommerce sites. TARDIS faces a challenge in the industry as competitors have presence online and grabbing the market share. TARDIS can adopt a follower strategy in Ecommerce and bank upon the idea and overcome the failures of others to fetch more customers and expand its business.



References

1.      Tkacz, E.; Kapczynski, A. (2009). Internet — Technical Development and Applications. Springer. p. 255. ISBN 978-3-642-05018-3.
2.      Laudon, K. C.; Guercio, T. C. (2014). E-commerce. business. technology. society. 10th edition. Pearson. ISBN 978-013-302444-9.
3.      Chaudhury, A.; Kuilboer, J. (2002). e-Business and e-Commerce Infrastructure. McGraw-Hill. ISBN 0-07-247875-6.
4.      Kotler, P. (2009). Marketing Management. Pearson: Prentice-Hall. ISBN 978-81-317-1683-0.
5.      Miller, R. (2002). The Legal and E-Commerce Environment Today (hardcover ed.). Thomson Learning. ISBN 0-324-06188-9. 741 pp.
6.      Gail, F. and Lockwood, J. (2011). Globalization, Communication and the Workplace: Talking across the World. New York: Continuum, 2011. Electronic Book #21-26.
7.      Grant, R. M. (2003). Cases in Contemporary strategy analysis. USAUKAustraliaGermany: Blackwell publishing. ISBN 1-4051-1180-1.

8.      Wernerfelt, B (1985). ‘Brand loyalty and user skills’, Journal of Economic Behavior and Organization, 1985, pp. 381–385

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