HC3152 e-Business Applications Online Tutoring

Question 1: (7 Marks)

While there are many e-business models that have been identified, and are still successful, many entrepreneurs, are looking to enter the online e-commerce market, with updated e-business models. Briefly describe the following newer 2020 e-commerce business models and identify any advantages or disadvantages.

1. Private Label

Products are typically made and provided by a corporation, and once the label of various companies is pasted on them, then they are considered private-label products. This is a new business model for e-commerce that is utilized by companies. These products help produce massive profits for the company and by introducing an additional line of products, the business will gain additional confidence and loyalty from customers which is among its advantages. Reduced competition, increased profits and brand builder are some more benefits. Whereas, the disadvantages of this business model are that minimum order consist of large quantity that might not be ordered otherwise and by ordering wrong choices of private label products make a dead inventory (Krasnov et al., 2017).

2. White Label

White label business model is the one in which the central facility is used for manufacturing products and they are labeled with different company names. The advantages of the white label model include brand loyalty as these products are mostly cheaper and consumers actively buy and they are attached with the store. The disadvantages include lack or difficulty of getting information about a company that made product or product information.

3. Drop Shipping

Dropshipping is a business model for e-commerce that enables you to sell goods from one’s store without spending in warehouse, inventory and fulfillment resources. The product is delivered rather than from the vendor when a customer orders from your online store. Dropshipping helps you to strip out the inventory bills, shipping problems and problems with retail delivery (Singh, Kaur and Singh, 2018). The drawbacks are possible quality management concerns, a good and efficient drop shipper is not easy to locate and decreased profit margins.

4. Print-on-Demand

It is a digital printing method used by e-commerce businesses. The advantages include printing as many books as demanded, print books automatically and then send to your customers, and no worry about storage and shipping. The downside of this model is that it is not suitable for the printing of books in large quantities.

5. Wholesaling

Wholesaling is the business model in which the company buys large quantities of goods via producers on a low price and then sell the same goods to the retailers on higher prices in smaller quantity. The advantages include no need for marketing as orders are fixed and thus there is fixed profit and margin. The disadvantages are the high requirement of capital for buying bulk products and thus requires a lot of space.

Question 2: (7 Marks)

Authors such as Michael Porter, identified five main competitive forces that may impact a company’s’ ability to grow and survive. While this framework is based around traditional brick-and-mortar stores, they can be related to the 21st century, e-business world. Answer the following 2-part question:

1. Part A: With the above background, identify 3 competitive threats applied to e-business on the buy-side (upstream supply chain), and also 2 competitive threats from the perspective of the sell-side (downstream supply chain). Provide a brief explanation, how and/or why, each competitive threat, could impact a business. [5 marks]

The three competitive threats to the buy-side of e-business are supplier threat, intermediary threat and new entrants.

• Supplier threat: Since suppliers are the ones that provide the goods or products to the organizations so most of the companies possess good relations with their trusted suppliers. But for the companies like fashion, style and beauty consist of lots of suppliers in the market and many of them would like to be the potential suppliers of the companies and offer them the most demanded products. So, the issue suppliers threat is present here in industries that are fast growing and thus this would affect the performance of the business.
• Intermediary threat: Intermediaries in buy-side are the electronic middlemen i.e. taking place of auctions. So, this is a competitive threat as they are significant for helping and facilitating the online trades between organizations and their suppliers. If any of the intermediary used previously by the organization is lost then the organization can suffer in getting products easily from their suppliers. Hence, in competitive market a single small action that do not go well create huge losses and issues (Afsharipour and Laster, 2018).
• Threat of new entrants: If any company enters the market and contact the same supplier for buying more and more bulk quantities, then the suppliers would be willing to provide demanded products to new entrant and previous organizations would suffer this way.

The two competitive threats to sell-side of e-business are the entry of new business model and issue of customer threat.

• Entry of new business model: Especially in this technologically advanced world, if a company does not incorporate new business models by inventing new products then that company would not be able to compete and another company may take over that posses new and unique business model and might stay on top of the market. Therefore, this is a threat to sell-side of e-business.
• Issue of customer threat: The customers that are attached with previous companies might like the products of those companies that have recently entered into the market. So, fulfilling the need of customers and regularly updating your techniques, products, business model and procedures are very crucial and a threat to the sell-side of e-business (Spence et al., 2019).

1. Part B: Briefly describe how a company like Amazon, is both a buy-side and sell-side enterprise, and how this could be interpreted as anti-competitive (2 Marks).

Amazon is both a buy-side and sell-side because the company buys the products and then also sells the same products. So, this is an anti-competitive force for the amazon because it is a great opportunity utilized by the company to efficiently operate. Therefore, they have the opportunity for making sales and also obtain materials and resources for developing services and products.

Question 3: (7 Marks)

When a business decides to expand into a new overseas market, it is important for the business to develop its’ supply chain to improve operational success. In terms of “Distributors” to be used by your business (in the new market), identify 7 actions or selection procedures, in determining how your business would select or identify the best distributor. For each action or selection, provide a briefly explanation, including how this would improve operational success.

• Cast a wide net: Make a potential distributor’s wide pool using information sources.
• Ideal distributor profile development: Now narrow down the pool by developing a checklist for representative criteria for an ideal distributor. This will help in the shorter and targeted list.
• Prequalify: Send an email with company introduction, upcoming plans, and products and set the context. You will get an idea of their interest level and sort out any conflict of interest here. Some of the distributors reject instantly and might refer to any other good distributor.
• Prioritize: Now you have a list of distributors that are interested and now prioritize those that are best suitable for your requirements and cut off those who have rejected from the list.
• Interview preparation: Make a questions list for interview and preselection. Set an interview in the office of the distributor as it will help in operational success so that you can get early answers and important clues (Momeni and Martinsuo, 2019).
• Trade evaluation: Visit the trade prior to the meeting and independently for understanding of your product category structure and various channels of distribution. In this way, you can check the brand portfolio of distributor.
• Check references: You must have 2-3 ideal distributors at the end of selection procedure. Request supplier references list for background checks, payment history and overall performance.