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.
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. USA, UK, Australia, Germany:
Blackwell publishing. ISBN 1-4051-1180-1.
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