E- Commerce is an extensive sector where purchase, exchange, product, service and sale are some of the major factors. Simply, it can be described as a bridge for exchanging the commodities and other activities which mainly involves transfer of suppliesfrom the producers to that of the consumers. From the facts mentioned in the website of European Union, e-commerce is famous its different types of business transaction as well as exchange of information by the use of ICT otherwise known as Information and Communication Technology among diverse companies, in the companies and among the consumers as well as public administrations(Jones et al., 2000). However, from the website of IBM, the definition of e-Business is quite clear-cut and it is the modern concept regarding the transformation of major business activities with the help of internet technologies(Jones et al., 2000).
Here in Unit 30 E – Business Models Assignment research paper, the scenario of A2Z Cosmetics is the point of interest in terms of factors like- internet and e-business along with e-business solutions. It is an established manufacturing company that deals with cosmetic products. For the different marketing strategies in this rapidly-transforming and competitive business sector, structuring an e-business strategy with all sorts of e-commerce by gathering all the e-business knowledgein the mind is the main purpose of this paper. Therefore this report with four tasks and imperative questions will be presented to the Chief Executive of A2Z Cosmetics Mr. J. Simon so that the BOD or Board of Directors Committee of this company will get convinced with the implementation of the new e-business strategies(Zhu & Kraemer,2005).
The major objectives of this Unit 30 E – Business Models Assignment are-
- Understanding the scope of e-business
- To get ample knowledge about the functioning of internet in the company
- Knowledge and Utilization of different e-business models
- Superior quality website designing
a) Discuss the environment in which e-business is conducted and describe various e-business transaction types.
Importance of the environmental analysis regarding an organization or monitoring the changes related to the environment is necessary for companies, like- A2Z Cosmetics. There are two major environmental factors known as micro-environmental factors as well as macro-environmental factors that have direct impact on A2Z Cosmetics(Amit&Zott, 2001).
Macro-environment factors include- Social, Legal, ethical and taxation, Economic, Political, Technological and Competitive aspects related to the organization, whereas Micro-environment consists of the aspects of e-marketplace like- the organization, its suppliers, the consumers, its competitors, the intermediaries and the public(Amit&Zott, 2001).
Internet is the most imperative environment in which all the e-commerce processes through a computer network can be conducted like- buying or selling. E-commerce based on internet has created revolutionary business style along with management and global trading. In case of A2Z Cosmetics, information sharing is a significant activity which helps to sustain the coordination among the clients and the company as well as coordination with the trading partners.(Zhu et al., 2006)Due to the vast network of internet through which people can share unlimited information and it also works like an enabler for the e-commerce of companies, like- A2Z Cosmetics as it allows cosmetic business to showcaseas well as sell the products to the customers and providing the services(Menasce, 2000).
According to the CREC or Center for Research and Electronic Commerce of University of Texas there are four key layers present in the conceptual framework related to the internet and according to this concept, those layers are- Internet Infrastructure, Internet Applications Infrastructure, Internet Intermediaries and Internet Commerce and A2Z Cosmetics will come under the forth layer as it sells the products directly to the end-users. Internet based business is directly dependent on the different types of e-business transactions and those transactions are mentioned below-
- Business-to-Business type transaction: In this type of transaction both the sellers as well as the buyers are two sorts of business organizations and the extensive range of e-commerce volume is of this particular type of transaction. This transaction is confined to the business partners and protective measures like- firewall, encryption, top level of authorization are integrated with the payment methods.
Example- Oracle and Linkshare are two prominent organizations that deal with the main application service and it makes the transaction type B2B(Beattie & Pratt, 2003).
- Collaborative Commerce or c-commerce: Collaboration among the business partners electronically is the keyapproach in c-commerce. All along the supply chain, this type of collaboration occurs among the business partners.
- Business-to-Consumers: In this particular type of transaction, sellers or wholesalers are the organizations and the customers are individuals.
Example- Amazon.com would be the perfect example as the top web storefront, where customers are allowed to browse through the catalogs and then they can place orders and the products are directly get delivered with the help of distributors.
- Consumers-to-Businesses: It is known as C2B type of e-business transaction and here particular products are set according to the needs of theconsumers. Then, the suppliers compete among themselves to provide better services or products in terms of quality and other factors like- faster serviceto the consumers.
- Consumer-to-Consumer: In this type of transaction, a person sells the products or provides services to other persons. The individuals also linked with one another by exchanging the products or services in this sort of transaction(Beattie & Pratt, 2003).
- Intra-business or Intra-organizational Commerce: In this type of transaction, e-commerce operations are utilized by the organizations for the improvement. B2E or Business to Employee is a special case which comes under this transaction type.
b) Explain the benefits and barriers to a business considering its online presence.There are three stages of benefits which
There are three stages of benefits which are being experience in case of A2Z Cosmetics and these benefits occur due to the online presence of A2Z Cosmetics in the internet world.
Those benefits are based on in terms of-
- Expansion of the marketplace related to A2Z Cosmetics to the national as well as international level has been possible, with minimum capital investment.
- With the help of online presence the company can locate its potential customers in a faster manner.
- Finding the best suppliers along with appropriate business partners is not at all a problematic issue for A2Z Cosmetics.
- It provides a platform for the company to procure better products as well as servicesin comparison to its competitors and with lower cost.
- With the shortening of the distribution channels which can be possible with e-business products will be cheaper and the revenue of A2Z Cosmetics will increase, vendors will also get higher profits(Fernandez et al., 2011).
- With digitalization of the different processes, around 90% of the costs related to the processing, storage, distribution etc can be minimized.
- It allows A2Z to maintain a lower inventory with the help of supply chain management which is based on the pull-type management and in this way; it consents to the processes like- product customization as well as reducing the inventory rates.
- VANs or Value-added Networks are quite expensive, so online presence helps to reduce the telecommunication costs as internet is much cheaper.
- It provides a competitive platform to companies, like- A2Z cosmetics to compete against giant firms.
- It works as an enabler to create a specific and focused niche market.
- Cheap products as well as services which can be achieved by the consumers with the help of quicker online searches and effective products and services comparison.
- Extensive ranges of choice so that they can select suitable products as well as vendors(Fernandez et al., 2011).
- 24 hours online service and shopping is the benefit of e-business and the products get delivered to any location the consumers want.
- Customized products in most of the product types are the specialty of this type of business.
- Electronic auctions for the benefit of both consumers and the vendors.
- With the help of this, the individuals can simply work at homes which helps in less travelling and hence less pollution.
- Manyproducts can be sold with low price with which standard of living of the people will be improved.
- In developing countries as well as rural areas, the people can enjoy the services along with the products which generally are not available at those places.
Barriers to a business
There are two types of barriers, one is- technological Barriers and the other one isnon-technological barriers.
- Lower standard of acceptance related to thequality of products and services along with the security as well as reliability factors.
- Inadequate telecommunication bandwidth.
- Software development tools that are of self-evolving nature.
- Problems regarding the integration of e-commerce applications and the internet along with the software.
- Requirement of the special Web Servers plusthe Network Servers.
- Expansive factor as well as inconvenient accessibility issues related to the internet.
- Some of the legal issues are unresolved.
- It requires more appropriate and relevant national as well as international government policies as well as standards.
- More mature and established methodologies are required for measuring the benefits of e-business.
- Most of the sellers as well as customers wait so that e-commerce gets stabilized and then, they will take part.
- Resistance of consumers to get inclined towards a virtual store by leaving the real ones due to lack of trust and faceless and unknown transactions where there is no need of paperwork.
- There is a perception in the market, that e-commerce is pricey and it is unsecured which is a misconception of the people.
c) Assess the security and legislative issues facing the online business of ‘A2Z Cosmetics’.
Ethical standards as well as their incorporation in case of online business activities of the company A2Z Cosmetics is the major purpose of this assessment section. The revolutionary approach of e-commerce and its changing to new forms style have created new risks which could be the result of new style of business practices(Eger et al., 2007).
- Consumer and Seller Protection:In thesetypes of transactions, buyers and sellers don’t get to know each other (many times the transactions happen among the individuals or organizations that belong to different countries.). So, there is always a chance of dishonesty and thereby people often face a situation of fraud as well as many other crimes in the world of internet.Starting from the commencement of e-business, consumers have been facing this particular problem, e.g. -a virtual bank got disappeared by taking all the deposits from the investors, other example of this issue is stock price manipulation. These fraudulent activities are increasing day by day which is an alarming issue(Fernandez et al., 2011).
- Fraud in the world of Internet:Internet fraud as well as its complexity has increased a lot in this modern era of internet technology. Cases of stock fraud are quite frequent as there is no reliability in the information provided.
Likewise auctions are quite favorable towards fraudulent activities over internet. However, other areas like- bogus deals or investments as well as phantom trade opportunities come under the potential issues of fraud in the sector of e-business. In case of A2Z Cosmetics, Financial Criminals are there who have access to more and more people which could be due to the greater inclination towards electronic mail. The initiatives by the governments, like- exemplary activity by the US Federal Trade Commissioncan create revolutionary step by which the legitimate issues of e-business can come to the front. E.g.-the ftc.gov published twelve examples of scams that arrived via e-mail as well as located on the web(Beattie & Pratt, 2003).
d) State different modes of communication available to an e-business and their applications.
Due to the progress of technology, new modes of communication are evolved and similarly the old ones are fading away. The cost-effective factor of these avant-garde modes of communication is the key reason for which people are getting more habituated towards electronic media.
Communication through Mobile Devices:The increasing manner of this style of communication has created a platform for the communication which is availableto the e-business sector. Text messages, short emails are the new forms of communication in this era with the help of cellular phonesas well as PDAs otherwise known as Personal Digital Assistants. Text messaging is the most favorable manner of communication which has been found from the researches. Quick Messages Services is a modern way of communication which occurs among the sellers and buyers(Amit&Zott, 2001).
Social Media:Social Networking Media is considered as the most prominent tool of communication which continues to take the first position among all sorts of communication modes. A2Z Cosmetics can promote the exclusive products along with the exciting offers via these social media sites which creates a center of attention for the potential customers. The recruiters as well as salespeople of the company very often get major contacts with the help of these sites.
Email:It is the oldest form of communication mode among all the three types of communication medium in e-business. But, due to its versatility it still managesto take the market as this form of communication is effective in case of asking questions as well as getting the solutions, mini conferences as well as awareness programs, sending documents and sharing of information. Nowadays, many courts are considering email as a piece of evidence and can be issued as a legal testimony so that transactions can be analyzed(Zhu & Kraemer,2005).
Business communications like- shopping carts are quite popular in this era of e-business. Shopping Cart is for the simplification of the shopping process so that an online consumer can purchase multiple goods easily from the e-commerce websites. The deeper style of infrastructure of the company website offers a user-friendly interface to the consumer which allowsthe consumers to select the merchandise according to their choices and then they can also review those and purchase them. This is a type of software with the help of which a list of products can be created by the customers and subsequently the overall fees are shown to the consumer automatically(Zhu & Kraemer,2005).
FAQs: In case of FAQs, the consumers can directly get their solutions as specific solutions are mentioned in the websites previously. Consumers have to just click on the selected problems and then the solutions related to the problems will occur which is quite a simple process. Therefore it is called Frequently Asked Questions.
Illustrate different e-business models that can be used to generate revenue for a business
- Web Catalogue Revenue Model: Reduction of the cost and improvement related to the customer services are the main motives behind e-business, but one of the primary aimsis also to make considerable revenue as well as get profit. It is the simplest style of e-business model which is intended for generating revenue. Electronic catalogue along with integration of shopping cart is the main concern here in this model. Payment that is received from the consumers is the sourceof revenue(Fernandez et al., 2011).
- Digital Content Revenue Model: Diverse information services are offered by many e-businesses, like- legal data, corporate and government information, other news as well as resources for the academic libraries and many others. Based on the requirements and usage pattern, all these services are customized through e-business but in line with the sizes of the organizations. A define amount of subscription charge is required to access the information and there is also an option of credit card. Digital Content Revenue Model provides the knowledge regarding this type of revenue generation(Fernandez et al., 2011).
- Advertising-Supported Revenue Model: In this particular model, the information is offered without any charges applied to the consumers so that certain audiences get attracted. Here the advertising revenue is adequate enough for the support of the operating cost of the website. E.g.-Yahoo provides data which is free of cost but the website earns most of the revenue from advertisements which is beyond the operational cost.
- Advertising-Subscription Mixed Revenue Model: In this model, the subscribers pay a certain amount of fee but they have to accept advertising to a little extent. In this way, the e-business creates revenue from both the sources which is from the subscription as well as from the advertisements. Online newspaper sites come under this particular model.
b) Compare and contrast two models by assessing the benefits and challenges. Analyze each model in terms of its capacity to generate revenue.
Fee-for-Transaction Revenue Model: According to this model of revenue, the businesses charge an amount according to the transaction size of the deal. From this e-business type, information get received by the consumers and that information is compulsory for the completion of a transaction, so the revenue is based on the size of the transaction. E.g.-Online travel sites are based on this e-business revenue model along with the stock brokerage firms in which they get commissions according to the size of each of the transaction of stocks or the shares(Fernandez et al., 2011).
Fee-for-Service Revenue Model: This model is just the opposite of Fee-for-Transaction Revenue Model, in which the fee is dependant to the value of a few services. Some of the professional services offered by the doctors, lawyers, consultants and accountants online come under this model of revenue. The e-business related to entertainment or online games also come under this model(Fernandez et al., 2011).
c) Report on future developments in e-business models
Some of the emerging grounds which can be observed while analyzing the e-business models are-
The e-business models are rising in the form of new unit of study which is the major developmental step in this sector.
Holistic approaches of the e-commerce websites with the explanation of how the business is going on in case of a firm is also an innovative approach. Here, the models are being developed to emphasize the system-level approach of a company.
Organizational activities are not mentioned upon which researches are continuing and this is a topic of thinking by which e-business can be progressedfaster.
The e-business models are being improved so that these can reach up to the explanation associated with the values of the organizations.
A process of doing business by following which, revenue can be generated for sustainability is known as the e-business models. Value proposition of the customers is the future direction that is related with the business model structure and it denotes the quality services offered to the customers along with the relationship of the e-commerce companies with the customers. For this the imperative and fundamental work is to make a proper list of resources according to its availability, the need of development and those resource that need to be obtained. A proper description of supply chain of the organization along with the suppliers as well as business partners is also required for the future development. Perfect implementation of the appropriate kind of revenue model along with anticipated costs, financial viability as well as finance sources are some of the essential points of concern here.
Use key elements of good website design structure
- Strategy Formulation
- User Experience Definition
- Architecture Design Process
These are the major steps and imperative elements those are required to build a good e-commerce website. In the implementation, the major components for the website design structure are required that are- template designing, content writing, backend coding and at lastthe integration of security network. Testing of the website is an important part which is obligatory before the launch of the website. Apart from this, the website must feature the multimedia aspects,content as well as other functions. Other additional components are- functional specification, change management and project planning.
Along with it, there are several details which should be developed and redeveloped while thinking about a well-designed website structure. Among the top prominent online retailers, there key elements are quite common which trigger success towards the company. These elements are-
- Relevant contents: No matter how beautiful is the website but, if the content of the ecommerce website is not useful, the customers lose interest about knowing the products and services of the organization.
- Clear and understandable Visual Hierarchy: This particular element is about impressive designing along with clear-cut visual hierarchy related to the company website. Using attractive graphics and simple design show creativity with higher level of usability, by which conveying the message to the potential consumers gets easy.
- Usability: It is about the consumer satisfaction which can be achieved with the help of well-designed navigation structure, high-level security and solid search tool. A simple but comprehensive style of shopping cart system along with instantaneous conformation page of order, tracking page of the orders and wish lists are the points of concern here.
- Good navigation: Consistent navigation structure across the overall pages of the official company website creates a centre of attention. Here the organizational goal must include the minimum number of clicks for the best practice among the consumers and the messages along with the information regarding the products and services offered by the company.
- Interactivity: Well-organized interactive communication system facilitates robust interaction among the audiences and the corporation. Top-quality links along with unique and remarkable contents, eye-catching graphics are some of the factors which come under the notice of people who browse through the website. With this approach, valuable feedback of the potential consumers can be gained which might be useful for the development of ecommerce website.
b) Evaluate the impact of a well-designed website on an e-business
For expansion of an organization, a well-built website with impressive design is the key element in the e-commerce world. Customers all over the world will visit the designed website, so it will create an impression in case of the consumers which will directly affect the reputation of the company. The virtual modes of shopping or getting the services should be properly elaborated with a touch of elegance and attractiveness, otherwise people lose interest and they will go for another company. User-friendliness along with attractiveness is the major areas of concern while designing a website and it has been known from the customers’ point of view(Eger et al., 2007).
Impact of a well-designed website to the e-business can be considered under the following areas-
- Information sharing and message transmission: With the help of high-tech tools and their integration into the company website, interactive communication among the organization and the potential customers can be increased. It can be considered as an element of opportunity that stimulates two-way sharing process related to information and facts.
- Public awareness: With the help of a well-designed website, the function of website, tools and search engine can be balanced which will strengthen the operation, campaigns and promotional activities of the organization.
- Branding: Clear visual hierarchy provides attractiveness and when rich content is used in those spaces, consistency gets reflected from the website with valuable message and the name of the organization becomes a brand for the consumers.
- Public relations: People know about the perfect services and exclusive product details from the well-designed website which acts like a major source of reference that supports the correlation among the customers and the organization
- Marketing: The marketing strategy of ASDA is dependent on the output of the company and marketing of the products, services as well as the whole organization as a brand can be effectively done with the help of well-designed website.
c) Report on the issues concerning website usability
From thestakeholders’ accessibility standpoint, the website is quite effective as they have complete access to analyze the products and services of A2Z Cosmetics. Major groups of audience will get fascinated due to the exclusivity of the product range and the services. In addition to that, the usability of the website is quite inventive due to the multi-sensory access which is very helpful for the visually impaired persons and individuals who have color blindness. According to the legal responsibilities of the company, the website perfectly fits the consumers as discrimination legislation is provided on it.
There are some common problematic issues related to the usability of the website and those are-
- Indistinct explanation of product details and other information which creates confusion.
- Due to the overusing of Java applets, flashy elements, ad banners and larger graphics, longer loading time is often come to the sight.
- Sometimes sites need the installation of unnecessary and useless software which leads to inconvenience.
- Difficulty in navigation control due to ineffective style of systematization related to the navigation links.
- Inappropriate designing of the website causes poor quality of readability
- Inconsistent designing of graphics related to the website also causes ugliness, as a result of which customers don’t want to visit the website anymore.
Jones, S., Wilikens, M., Morris, P., &Masera, M. (2000). Trust requirements in e-business. Communications of the ACM, 43(12), 81-87.
Tsalgatidou, A., &Pitoura, E. (2001). Business models and transactions in mobile electronic commerce: requirements and properties. Computer Networks,37(2), 221-236.
Zhu, K., & Kraemer, K. L. (2005). Post-adoption variations in usage and value of e-business by organizations: cross-country evidence from the retail industry.Information Systems Research, 16(1), 61-84.
Amit, R., &Zott, C. (2001).Value creation in e?business. Strategic management journal, 22(6?7), 493-520.