Advancement of technology and globalization has changed the way companies are undertaking their business operations in the current dynamic and competitive business environment. Internet access as led to usage of technology for myriad of reasons including communication, business and education (Chaffey, 2014). The business community has been changed completely by internet. Recently, internet has become an integral part of companies as a means of carrying out business. This has led to emergence of electronic business where organizations are using internet to conduct business externally or internally. E-business makes use of internet technology to entice, satisfy and keep consumers who purchase its services and products. E-business also uses internet technology to streamline its supply chain, procurement system and manufacturing in order to deliver efficiently the right services and products to the consumers. For an e-business to be a success, various internet-enabled applications such as portals, e-commerce websites, online marketplaces, customer relationship and supply chain management (Meier and Stormer, 2009).
In e-business, companies undertake their business operations through electronic means. E-business involves wide array of business, but the primary premise is its dependence on the internet for commerce. Companies use online media to market, promote, buy and sell numerous services and products (Chaffey, 2014). Offering products online allows a company to access the market with much ease. The versatility of the e-business allows the company to operate with no physical offices which could mean additional expenses to the company.
Accessibility is another benefit of online business. An online business is always open to offer its products and services to its customers from all over the world. Such company do not have to care and worry about the hours of operations. It makes it easy for such a company to interact and receive feedbacks from customers through online surveys and questionnaires (Cruz-Cunha and Varajão, 2011). Communication is also enhanced through usage of the internet and the business is able to provide important information to its clients.
Business to Consumer or direct to consumer refers to the transactions undertaken directly to the consumers who are the final consumers of the services and products. In such situation, business selling direct to its consumers online targets its websites to the consumers. These businesses normally send e-mails to their clients across the globe to alert them of their upcoming sales (Schneider, 2011). Most of the company’s clients make purchases through online platforms. Business to consumer strategy has various weaknesses in the business environment. Security is one of the major concerns. E-business lacks face-to-face communication and revealing both personal and financial information online is a key security concern between the buyer and the business. Disclosed information could be stolen. Competition is also so stiff for small companies due to the presence of major giants in the industry such as Staples and Amazon. Absence of sufficient infrastructure is a weakness despite e-business giving a business a complete global reach (Schneider, 2011). Most of the existing and potential consumers across the world lack access to broadband internet service. Infrastructure gaps are the main reason why e-business is faces challenges in the market. E-business also leads to increased costs as more infrastructures will be required. The company wills needs to have a very strong, effective and active websites, hire IT experts and various equipments to support the strategy. The company will be exposed to more risks such as foreign trade restrictions and cultural diversity. These factors will require company’s consideration when trying to sell to is target markets all over the world.
Procter & Gamble Co. (P&G) is planning to undertake a direct to consumer e-business strategy and is planning to do away with its usual intermediaries such as supermarkets and selling directly to the consumers. This strategy is aimed at enhancing efficiency because reduction of intermediaries reduces cost of production (Schneider, 2011). P&G plans to go direct to the market by the use of e-business strategy. These will not be easy tasks because of the various issues posed by the online business and transactions. First, presence of stiff competition from the big and already established online companies such as Amazon will challenge the survival of the P&G’s strategy. Another major issue in the online business is the security concerns. There are various issues associated with security as a result of advancement of technology and emergence of online fraudsters and hackers who are capable of interfering with the personal and financial information of the buyers (Meier and Stormer, 2009). Absence of infrastructure needed to support e-business across the world will greatly hinder the strategic plans by the company. Absence or little customer-company interaction affects the relationship of the company and its clients all over the world.
For any business to survive in the market, it must have in place appropriate strategies that support achievement of the objectives and goals. To reach its customers easily and increase customer base across the world, P&G resolved to this e-business strategy. This means the company would reduce its intermediaries and deal with its clients directly. This will improve company’s interactions with its consumers as it would receive complaints, suggestions and compliments which would in return enhance the company’s service and products delivery (Stanford-Smith, 2000). However, major concerns such as security will likely to have negative effect on the success of this strategy by P&G. The biggest hindrance in the growth of e-business is the security issue. It has been established in the modern era of advanced technology that internet is not a secure communication medium. Hackers use available tools and options to monitor and control data and other important personal information communicated over the internet. Clients wishing to buy products online are not comfortable to give their personal and financial information such as credit card number online due to the fact that these information will be hacked and probably lose money in the process (Perera et al., 2017).
Lack of privacy makes this e-business strategy undesirable. Absence of strong encryption for the company’s website to ensure security of online transaction makes people fear engaging in such practices (Perera et al., 2017). Some websites have in the past been found to collect consumer statistics illegally without the permission of the customers. Competition is another threat of the e-business strategy for the P&G Company. Engaging in the e-business means that the company will be competing on the global bases and thereby is bound to face great competition (Meier and Stormer, 2009). Online business has already established companies who have been in the market for long. Competing with such companies bearing in mind their big size and financial capability would be a major challenge.
Coming up with guiding principles will enable the company to push through its strategy. P&G’s should come up with realistic goals which it aims to achieve in the event that the e-business strategy succeeds. Coming with appropriate and attainable goals will ensure that the companies strive to reduce the undesirable impacts likely to be brought about by the weakness identified above. Goals will ensure all available resources and capabilities at the disposal of the company are used in supporting the strategy (Perera et al., 2017). The main reason why the company wants to use this strategy is to pursue greater level of efficiency by reducing cost through eliminating intermediaries, enhance contact with the clients, avoid information distortion and increase its revenues.
Delivering value proposition to its clients should be another guiding principle for P&G. By opting to deal with its clients directly, P&G Company aims to deliver value to its customers as its mission statement stipulates. Eliminating intermediaries means that the company will have to deal with its customers directly (Alghamdi, 2011). This will assist the company in getting first-hand information and concerns relating to clients. The company will make production and delivery decisions based on the feedback received from the clients across the entire world. Differentiating and diversifying to gain competitive advantage should be a guiding principle as the company strive to attain its goal. E-business strategy means that the company is trying to tap the unexploited markets or attempting to reach out to markets that it has never been before (Alghamdi, 2011). Therefore, the above three guiding principles are very critical in helping in finding solutions to various weaknesses and threats established earlier in the study.
From the above analysis, issues such as security, internet infrastructure, absence of privacy and competition are some of the weaknesses facing e-business strategy. These issues are likely to affect the likelihood of the company to attain its objectives. Therefore, the company must be able to address them in a professional manner otherwise the strategy will be a flop (Combe, 2012). As established above, the company is after enhancing efficiency, delivering value, diversifying through reaching more markets and attaining the objectives contained in its mission statement. These are the key reasons why the company wants to embrace e-business strategy.
To address the above issues identified, there are various bases for solutions. First, the company should ensure it assures online shoppers of their security of their financial and personal information as they interact with this strategy of the company (Alghamdi, 2011). The company will need to invest both money and time in learning and implementing excellent security measures such as introducing data encryption and digital signatures to safeguard the information of the customers lest it will land on the wrong hands. The other issue identified was related to the absence of the internet infrastructure. The company will need to undertake research and identify areas of the world with stable and strong internet broadband, direct and focus its marketing efforts in such areas (Martínez-López, 2014). This will ensure that the company does not waste a lot of resources to areas without internet infrastructures because these areas will not result to any sales. In respect to privacy issue, the company will require to introduce encryption measures in effort to secure online transactions and safeguard the online identity of the customers. This will encourage people to participate and practice online purchases thereby boosting the sales of the company.
P&G Company will also need to invest more in coming up with strong website with effective security features to ensure hackers and other online fraudsters do not intrude the system to mess with company’s and clients’ information (Alghamdi, 2011). This will be a prerequisite in penetrating a very competitive online business environment with big and established companies such as Amazon and Alibaba.com. Since competition was one of the challenges established in regard to e-business strategy, the company will need to come up with effective strategies to fight the competitors. Reduced intermediaries mean that the company will be able to offer its products effectively using the shortest supply chain and at the least cost possible (Martínez-López, 2014). This means that the company will be able to offer its services and products at reasonable prices. These practices will help in addressing the challenges addressed above in the study.
P&G offers dishwashing, menstrual hygiene, hair care, healthcare products, skin care, laundry detergent and many more products. My solution was for the company to improve on its website’s security, security of its customer’s information, enhancing efficiency by employing cost effective means in order to counter competitors in the e-business environment and investing in highly competent staff with modern technology knowledge that will be able to safeguard the e-business operations of the company (Alghamdi, 2011). The company has various products to be offered to various segments and therefore various department of the company will need to take part. Since the company offers a wide range of products, effective management of the e-business by the company will facilitate more sales.
The company offers various products in the markets as established in the above paragraph. The company can enhance its sales by introducing some strategies such as giving its customers after-sales services. These could be free delivery, maintenance of the sold products and repairs services. These will enable the company to attract customers from the major competitors in the online sector. The company should also encourage customers to give feedbacks regarding the products and services of the company. This will enable the company to offer products according to the needs of its consumers. Through taking into consideration the feedbacks of the customers, the companies will be able to improve its services and products thereby improving the quality of products and services and winning more customers. Market feedback and after-sales services are some of the key strategies that can be used by the company to penetrate easily into the market.
The operations of the company will be focused on supporting the strategy of the company. The operations comprise of all the activities undertaken by the company in effort to attain the objectives of the company. All the activities involved in sourcing raw material to the process of delivering final product to the end user will need to be safeguarded by the security measures identified in the study. All the operations should be directed towards attaining the objectives predetermined by the company (Lientz and Rea, 2009). Departments of the P&G including Accounting and Finance and Human Resource will be impacted by the solutions methods. Accounting and finance will need to ensure accuracy and uniformity of the financial data and records of the online shoppers. This will ensure that frequency and pattern of purchases are determined so that the company can be able to predict sales in future. Human resource should seek competent staffs that are expected to provide security measures to the e-business model. All the products by the company will be displayed on the company’s website (Gasos and Thoben, 2003). Through recruiting and hiring competent staff, the company’s website will be appealing and offer security measures and therefore offer assurance to potential online buyers who are skeptical about online purchasing.
Any company must come up with strategies to survive in the market. Dividing market into numerous segments so that every segment with different needs will be addressed differently will win confidence of buyers (Gasos and Thoben, 2003). For our case, P&G target market is mainly adult people from the age of 25-55. This bracket consists of adult individuals who are the main users of the products offered by the company. Some of the company’s products include washing, detergents and hair care products. These people will shop for house products manly because majority of the individuals in this bracket have families.
The current business world is characterized by stiff competition. Every sector in the economy has stiff competition (Lientz and Rea, 2009). P&G Company will face stiff competition from various companies who have been in the online business for years. For example, Amazon has been in the industry for long and has strong capital base for any new entrant to challenge it. These bigger companies have been in the e-business long enough to have won the confidence, trust and loyalty of the online customers. Other companies with e-business strategy will challenge the survival of the firm once it joins the market place.
P&G Company will enjoy competitive advantage over its competitors if the strategy becomes a success. Enhanced security of the personal and financial information, efficiency and low cost of distribution will make the company has competitive advantage over its competitors in the market. Bypassing intermediaries such as supermarkets and reducing the supply chain means that consumers will get products and services at timely basis and at lower costs compared to a case where many intermediaries are on the supply chain (Gasos and Thoben, 2003). This will be a source of competitive advantage. Doing this more efficiently and differently ensures that the company stands out from the rest of the companies.
A new entrant is certainly likely to face barriers to entry while trying a new market. P&G Company want to engage in e-business. This is an activity the company has never too part in. Already established online businesses will limit ad challenge entry of the company into that market (Chaffey, 2007). Existing companies have strong customer loyalty, brand identity and high switching for the customer. Most of the existing customers in the online buying have their loyalty focused on other already established companies. These companies have been in the mark and have won the confidence of customers (Lientz and Rea, 2009). Therefore, existing companies are likely to hinder the entry of P&G in the market.
As established in the report, e-business involves undertaking business online. E-business utilizes internet technology to attract, satisfy and keep consumers who purchase its services and products (Chaffey, 2007). Therefore, P$G Company must ensure the success of the e-business strategy through prioritizing on dealing with security, privacy, cost and competition issues in the online business market. E-business will facilitate attainment of the company’s objectives through cutting on costs, enhancing efficiency and improving service delivery. E-business strategy will ensure increased coverage, customer and profitability of a company (Chaffey, 2007).
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