E-commerce

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E-commerce

  1. 1. E-Commerce & M-Commerce Sahil Khanna & Trisha Mukherjee 7/1/14 PRABHATAM
  2. 2. INTRODUCTION Electronic commerce, commonly known as E-commerce or eCommerce, is trading in products or services conducted via computer networks such as the Internet. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, , supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices, social media, and telephones as well. Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions. This is an effective and efficient way of communicating within an organization and one of the most effective and useful ways of conducting business. It is a Market entry strategy where the company may or may not have a physical presence.
  3. 3. E-commerce can be divided into 7 subsections  Eretail or "virtual storefronts" on websites with online catalogs, sometimes gathered into a "virtual mall"  Buying or selling on websites and/or online marketplaces  The gathering and use of demographic data through web contacts and social media  Electronic data interchange, the business-to-business exchange of data  E-mail and fax and their use as media for reaching prospective and established customers (for example, with newsletters)  Business-to-business buying and selling  The security of business transactions Business applications Some common applications related to electronic commerce are:  Document automation in supply chain and logistics  Domestic and international payment systems  Enterprise content management  Group buying  Automated online assistants  Instant messaging  Newsgroups  Online shopping and order tracking  Online banking  Online office suites  Shopping cart software  Teleconferencing  Electronic tickets  Social networking
  4. 4. Global trends In 2010, the United Kingdom had the biggest e-commerce market in the world when measured by the amount spent per capita. The Czech Republic is the European country where ecommerce delivers the biggest contribution to the enterprises´ total revenue. Almost a quarter (24%) of the country’s total turnover is generated via the online channel. Among emerging economies, China's e-commerce presence continues to expand every year. With 384 million internet users, China's online shopping sales rose to $36.6 billion in 2009 and one of the reasons behind the huge growth has been the improved trust level for shoppers. The Chinese retailers have been able to help consumers feel more comfortable shopping online. China's cross- border e-commerce is also growing rapidly. E-commerce transactions between China and other countries increased 32% to 2.3 trillion yuan ($375.8 billion) in 2012 and accounted for 9.6% of China's total international trade. Other BRIC countries are witnessing the accelerated growth of eCommerce as well. In Russia, the total ecommerce market is projected to total somewhere between 690 billion rubles ($23 billion) and 900 billion rubles ($30 billion) in 2015, at 2010 values. This will equal 5% of total retail volume in Russia. Longer-term, the market size of Russian e-commerce could reach $50 billion by 2020. Ecommerce players need to understand unique insights about trust factor, online payments and language peculiarities to penetrate the Russian market. Brazil's eCommerce is growing quickly with retail eCommerce sales expected to grow at a healthy double-digit pace through 2014. By 2016, eMarketer expects retail ecommerce sales in Brazil to reach $17.3 billion. India's ecommerce growth, on the other hand, has been slower although the country's potential remains solid considering its surging economy, the rapid growth of internet penetration, English language proficiency and a vast market of 1.2 billion consumers (although perhaps only 50 million access the internet through PCs and some estimate the most active group of e-commerce customers numbers only 2-3 million). E-commerce traffic grew about 50% from 2011 to 2012, from 26.1 million to 37.5 million, according to a report released by Com Score. Still much of the estimated 14 billion dollars in 2012 ecommerce was generated from travel sites. eCommerce is also expanding across the Middle East. Having recorded the world's fastest growth in internet usage between 2000 and 2009, the region is home to more than 60 million internet users. Retail, travel and gaming are the region's top eCommerce segments, in spite of difficulties such as the lack of region-wide legal frameworks and logistical problems in cross-border transportation. E- Commerce has become an important tool for small and large businesses worldwide, not only to sell to customers, but also to engage them. In 2012, ecommerce sales topped $1 trillion for the first time in history. Mobile devices are playing an increasing role in the mix of eCommerce. Some estimates show that purchases made on mobile devices will make up 25% of the market by 2017.According to Cisco Visual Networking Index, in 2014 the amount of mobile devices will outnumber the number of world population. Multichannel Selling is also worth mentioning, when it comes to e-commerce. As stated in E- commerce trends for 2014, multichannel selling is relatively young but though has already managed to become a key driver for promotion of small business companies unable to compete with media giants in Google. The essence of it lies in equipping a few shopping platforms like Amazon or Nextag for goods promotion.
  5. 5. Online marketplace An online marketplace (or online e-commerce marketplace) is a type of e-commerce site where product and inventory information is provided by multiple third parties, whereas transactions are processed by the marketplace operator. Online marketplaces are the primary type of multichannel ecommerce. In an online marketplace, consumer transactions are processed by the marketplace operator and then delivered and fulfilled by the participating retailers or wholesalers (often called drop shipping).In general, because marketplaces aggregate products from a wide array of providers, selection is usually more wide, availability is higher, and prices are more competitive than in vendor-specific online retail stores. Examples of online marketplaces are eBay, Flipkart, and Amazon. Online shopping Online shopping or e-shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser. Alternative names are: e- web-store, e-shop, e-store, Internet shop, web-shop, web-store, online store, online storefront and virtual store. Mobile commerce (or m-commerce) describes purchasing from an online retailer's mobile optimized online site or app. An online shop evokes the physical analogy of buying products or services at a bricks-and- mortar retailer or shopping center; the process is called business-to-consumer (B2C) online shopping. In the case where a business buys from another business, the process is called business-to- business (B2B) online shopping. The largest of these online retailing corporations are Alibaba, Amazon.com,and eBay. Retail success is no longer all about physical stores. This is evident because of the increase in retailers now offering online store interfaces for consumers. With the growth of online shopping, comes a wealth of new market footprint coverage opportunities for stores that can appropriately cater to offshore market demands and service requirements
  6. 6. Growth of India online shopping India e-commerce market will start maturing and display characteristics similar to China – which traditionally has higher conversion rates (nearly 3.5%) • This is due to e-commerce being only choice for availability of goods in parts of the country and easy payment options like COD – which are not problems in western countries. As e-commerce sites gain trust, users are beginning to order more frequently • Also, repeat users – acquired more than 1yr old are more comfortable ordering online and order significantly more than first time buyers Last year there was a significant jump in average order value as there was a Penetration of new categories like jewelers, home décor etc. • Also, users are becoming more comfortable buying higher priced items online
  7. 7. Observations 1. ~200M of Indians will come online in next 3 years 2. Majority of these will come online on smartphones 3. E-Commerce companies are building their brands, thus gaining trust of users 1. Existing shoppers shop more number of times than new shoppers (in that year) 2. As India’s e-commerce market grows the proportion of existing shoppers will increase from 30% (in 2013) to 50% (in 2016)
  8. 8. Indian online shopping has tremendous growth potential sliver of Indian retail E-commerce is a small 3rd party wallets will become a significant alternative to COD in coming years
  9. 9. 3rd party wallets These are wallets that are stored by a third party—usually on a remote server, so the information is easily accessed from anywhere, no matter what computing device you're using. That is to say, third- party wallets are almost exclusively web wallets, and the third party in question is usually a digital currency exchange. The cloud computing accessibility is an attractive perk, but some investors feel it comes at the sacrifice of some security and peace of mind—more on that in a moment. Another advantage of third-party wallets is evident when updates are made to the wallet software. For you, the investor, it happens invisibly; there are no emails, text messages or pop-ups telling you an update needs to be downloaded. The exchange maintaining your wallet will apply any changes that need to be made to all the wallets currently under their care. You may get a message that gives the details of the update, but that's it; no further action on your part will be necessary. Additionally, you don't have to set aside any hard drive storage space on your PC or smartphone, since all your wallet info is stored on remote servers. When you're shopping around for a wallet, and you're considering using an exchange for your wallet storage, arm yourself with some important questions to ask first. Find out who will have access to your information—not just the currency itself, but your public and private keys. Ask about the layers of security the exchange uses to protect its investors' wallets. Do some research of your own to discover the exchange's reputation; trust us, if there are issues with a specific exchange, there will be articles and forum posts about it. If your questions and concerns aren't satisfied when you talk with an exchange representative, perhaps it's best to find another—or maintain your wallet yourself.
  10. 10. Indian online shopping has tremendous growth potential
  11. 11. BRICs B2C online shopping market
  12. 12. Women shoppers – a growing force 1. Working women segment grew 43% in 2013 and constitutes nearly 10% of Active internet users in India according to i-Cube & IAMAI 2. Categories like baby care, home décor, jewellery etc have traditionally been influenced by women decision makers. As more choice become available more women are shopping online.
  13. 13. E-Commerce Websites in India Must Be Regulated By Indian Government An ineffective cyber law of India and lack of cyber law skills among the law enforcement agencies of India is resulting in increased cybercrimes and offences through the medium of e-commerce websites in India. Further, cyber law awareness in India is also missing that is resulting in increased e- commerce frauds in India. In these circumstances, e-commerce websites frauds, offences and crimes in India have increased a lot. For instance, the e-commerce sites selling adult merchandise in India are openly violating the laws of India. Similarly, e-commerce websites in India are engaging in punishable soft porn publication and Indian government is sleeping over the matter. There are well recognized legal requirements to start an e-commerce website in India and the legal formalities required for starting e-commerce business in India. As on date, the e-commerce websites are not following such techno legal requirements. They are also not following the cyber law due diligence requirements of India and are liable for Internet intermediary liability in India. E-commerce websites dealing with online pharmacies, online gaming and gambling, online selling of adult merchandise, etc are openly and continuously violating the laws of India, including the cyber law of India. However, India government has yet to take action against these offending e-commerce websites of India. Fortunately, the Supreme Court of India is taking some action in this regard. Recently, the Supreme Court of India has sought response from central government over blocking of porn website sin India. Similarly, the Supreme Court of India has entertained a public interest litigation seeking regulations and guidelines for effective investigation of cybercrimes in India. The cyber law of India is too weak to tackle cyber criminals effectively. In fact, cyber law of India should be repealed and an effective cyber law must be formulated as soon as possible. The cyber criminals are becoming innovative day by day and our laws are grossly inadequate to deal with the same. For instance, numerous websites, both Indian and foreign, are violating the cyber law of India by operating illegal e-commerce websites in India. These websites are engaging in illegal trade in wildlife, promising home delivery of live animals, prized animal parts and rare medicinal plants from across nations through simple internet banking formats. These are transnational crimes where the authorship attribution for cybercrimes is very difficult to establish. Realizing this reality, the India's wildlife crime control bureau (WCCB) is utilizing the services of cybercrime experts to trace such cyber criminals. A preliminary inquiry by WCCB bureau's cybercrime specialists has indicated that nearly a thousand websites are advertising sale and delivery of live animals and animal products protected under the Wildlife Protection Act, 1972 of India and the global convention on international trade in endangered species (CITES). Surprisingly, most of these websites are popular shopping websites, online classifieds and free ad posting websites, etc. They are clearly violating the cyber law and other laws of India and Indian government is not taking any action against these websites. It is high time to take strict penal action against such illegal e-commerce websites in India.
  14. 14. Company background Name eBay Inc. Industries served Internet, Online retailing Geographic areas served Worldwide Headquarters U.S. Current CEO John Donahoe Revenue $ 14.07 billion (2012) Profit $ 2.60 billion (2012) Employees 27,770 (2012) Main Competitors Amazon.com, Craigslist, Ubid, eBid Auctions, Google, Overstock.com eBay is an international online marketplace with a global customer base of 233 million. It is a multibillion business operating in 37 countries. There are millions of items listed on eBay across thousands of categories, including antiques, toys, books, computers, sports and electronics, amongst many others.
  15. 15. Strengths 1. World’s largest internet marketplace. eBay has more than 150 million live listings and more than 105 million active users globally in 37 countries. That makes eBay the largest marketplace online, having a great power over other online retailers. 2. Business model. eBay only acts as a middleman between sellers and buyers, who bid and sell items in eBay’s marketplace. Being a pioneer in online auctions, eBay had no competition and currently has only few strong direct competitors. Thus, company’s business model is a competitive advantage over such giant retailers as Amazon. 3. Economies of scale. In the beginning, eBay had to invest heavily to gain IT and customer relationship management (CRM) knowledge and skills, but since then, used its skills to serve over 100 million users and to create the largest online marketplace with little additional costs. 4. Localization. The business operates in 37 countries. Each marketplace is using local language and is adapted to local product offerings. No other global online marketplace is localized to such degree. 5. Payment system. eBay uses PayPal, its own payment system, to proceed nearly all of the payments going from eBay’s marketplace. From eBay’s perspective, such tight integration has the benefits of more fees collected (PayPal takes transaction fees from the businesses) and tighter control over buyer’s shopping experience. From buyer’s perspective, PayPal provides easy to use online payment method. 6. Brand reputation. eBay is a trustworthy brand, known all over the world and is valued at $11 billion. SWOT ANALYSIS Strengths Weaknesses 1. World’s largest internet marketplace 2. Business model (no strong direct competition) 3. Economies of scale 4. Localization 5. Payment system 6. Brand reputation 1. High fees 2. No further growth strategy Opportunities Threats 1. Growing number of mobile shoppers 2. Become a retailer 3. Increase services and product portfolio through acquisition 4. Open more online stores in other countries 1. Online security 2. Regional low cost online retailers 3. Increasing competition from Amazon 4. Exchange rates
  16. 16. Weaknesses 1. High fees. eBay’s fees for the sellers has risen significantly over the years. The firm receives fees on listed goods, sold goods, some adornment fees and PayPal transaction fees. The sellers often make zero profit on their low price products sold on eBay due to its high fees. 2. No further growth strategy. eBay hasn’t unveiled any plans on how the business is going to sustain its growth. Firm’s top management team is unsure whether eBay should become a retailer or to introduce new products and services and how to do that: developing its own products or acquiring new business. As a result, there is high uncertainty over eBay’s future and business direction. Opportunities 1. Growing number of mobile shoppers. eBay has a strong payments system PayPal that is widely accepted and used by many online retailers and online shoppers as it is convenient and easy to use. The growing number of mobile shoppers represents a huge growth opportunity for PayPal as its one of the few payment systems that meets the requirements for convenient shopping and payment processing on the go. 2. Become a retailer. eBay has an access to hugest online marketplace in the world and is well placed to take an advantage of that by becoming a retailer. The company has its IT and CRM systems in place already and could easily stake out a market share from Amazon and other online retailers. 3. Increase services portfolio through acquisition. The company has successfully acquired many companies to extend its services offering and should continue adding new services through mergers and acquisitions. 4. Open more online stores in other countries. To sustain current growth levels, eBay could open its online marketplaces in other large and growing economies in Asia and Europe. Threats 1. Online security. PayPal stores online shoppers’ personal information, such as bank account details, which is a target for online thefts. The more online customers PayPal has, the more attractive as a target for identity thefts it becomes. 2. Regional low cost online retailers. Regional low cost online retailers could outrival eBay on faster and cheaper shipping, more localized product offering and better knowledge about home market. 3. Increasing competition from Amazon. Amazon’s online presence has significantly increased and now Amazon’s marketplace is just behind eBay’s. 4. Exchange rates. eBay receives a part of its income from foreign operations. The profits that are sent back to US have to be converted into dollars and may be affected by the exchange rates, especially when the dollar is appreciating against other currencies.
  17. 17. Company background Name Amazon.com, Inc. Industries served Internet, Online retailing Geographic areas served Worldwide Headquarters U.S. Current CEO Jeff Bezos Revenue $ 61.09 billion (2012) Profit $ -39 million (2012) Employees 88,400 (2012) Main Competitors eBay Inc., Netflix, Apple Inc., Barnes & Noble, Inc., Wal-Mart.com USA, LLC. Amazon Inc. is an American online retail that primarily sells products over its online marketplace and offers many other products and services through its subsidiaries. Amazon.com sells in 11 countries and ships internationally. It is one of the biggest retailers and is steadily growing over the years. SWOT ANALYSIS Strengths Weaknesses 1. Cost leadership strategy 2. Superior quality services and products 3. Strategic acquisitions 4. Efficient distribution chain and logistics 5. Economies of scope 1. Only online presence 2. Selling at zero margins 3. Negative publicity
  18. 18. Opportunities Threats 1. Online payment system 2. Release more its own brand products and services 3. Increase services and product portfolio through acquisitions 4. Open more online stores in other countries 5. Physical presence 1. Online security 2. Lawsuits 3. Strategic alliances 4. Legislation against tax avoidance 5. Regional low cost online retailers Strengths 1. Cost leadership strategy. The goal of cost leadership strategy is to produce products and services with a lower cost than the competitors do. The key to achieve this strategy are the economies of scale. For Amazon to succeed with the cost leadership strategy it has to provide the widest range of products to achieve the economies of scale and benefit from the low costs of displaying those products on its online marketplace. In a result, the business became the largest online retailer in the world. 2. Superior quality services and products. Amazon delivers only the best quality services and products. It is reliable, convenient, offers one of the lowest and fastest shipping, the lowest price, many free additional features with its services and has the widest selection of goods. Amazon has a brand reputation for great customer service. 3. Strategic acquisitions. Amazon has been successfully acquiring new firms to bring the new products, services, capabilities, assets and skills to the business. Due to these strategic acquisitions Amazon is now capable of offering cloud services, has developed its information management (IM) and customer relationship management (CRM) skills. 4. Efficient logistics and distribution. Amazon has a number of fulfillment warehouses in each market it operates. The warehouses are geographically spread in each country so the goods could be dispatched faster and with lower cost. 5. Economies of scope. Economies of scope are the savings that come from producing two or more goods (or providing services) at less cost than producing each individually using the same resources and technology. Amazon experiences economies of scope by using its superior IT skills to offer the largest range of products online (instead of offering fewer products). It also uses excess server capacity (which originally were built to support online marketplace) to provide cloud computing services. Weaknesses 1. Only online presence. Amazon lacks physical presence like retailers such as Wal-Mart and Target. People can see and touch the purchases there and buy them instantly. 2. Selling at zero margins. Many of the products the Amazon offers are sold at zero margins to gain the market share and push the competition out of the market. In a short term, it is a strong tactical move (due to Amazon’s cost leadership strategy) but in the long run it only hurts firm’s profits. Competitors will adapt and can easily gain their market share back by pursuing differentiation strategy. 3. Negative publicity. Amazon has recently attracted much negative publicity due to its tax avoidance in the countries (UK and US) where it earns most of its revenues. Amazon is also
  19. 19. criticized for poor warehouse conditions for workers, anti-competitive actions, price discrimination and etc. Opportunities 1. Online payment system. Amazon could extend its current payments system and introduce the service similar to PayPal. Amazon’s payment system would be of great use for mobile buyers who usually by on the go and find it hard to provide bank details or other personal information that is required when purchasing the product. In addition, such service could be used by many other online retailers for a small fee. 2. Release more own brand products and services. With an access to such large market, Amazon could benefit by releasing more of its own brand products. 3. Increase services and product portfolio through acquisitions. The company has already acquired many companies to successfully extend its products and services offering. 4. Open more online stores in other countries. To sustain current growth levels, Amazon could open its online marketplaces in other large and growing economies in Asia and Europe. 5. Physical presence. The business could establish some physical presence in the markets it operates. Smaller store-warehouse (like Argos’ stores) outlets could serve as warehouses, distribution centers, the stores where customers could pick up their purchases and physical contact points. Amazon’s brand presence would be significantly improved. Threats 1. Online security. Amazon stores its online shoppers’ personal information, such as bank account details, which is a target for online thefts. The more online customers Amazon has, the more attractive as a target it becomes. 2. Lawsuits. The business has already attracted much negative attention from UK and U.S. authorities for tax avoidance and is subject for litigations and fines. Lawsuits are costly and consume time. 3. Strategic alliances. Although Amazon is a massive online shopping mall and can’t be easily surpassed by small competitors, it faces serious challenges from strategic alliances. For example, the strategic alliance between Apple and e-books content providers allowed the content providers to demand that Amazon would sell e-books for higher price or that they will sell their e- books through Apple store only. Without the strategic alliance, content providers were unable to compete against Amazon’s bargaining power. 4. Legislation against tax avoidance. There are growing concerns over how huge multinational companies, such as Amazon, avoid paying taxes for the countries they operate in. Eventually, governments will pass a legislation requiring that all companies would pay a fair share of taxes. In this case, Amazon’s profits would be significantly affected. 5. Regional low cost online retailers. Regional low cost online retailers could outrival Amazon on faster and cheaper shipping, localized product offering and better knowledge about home market.
  20. 20. Snapdeal Parent Company Jasper Infotech Category Website-online advertising and discount on goods Sector IT and Technology Tagline/ Slogan Super Deals USP Excellent customer service and wide array of deals in major cities STP Segment Internet users Target Group Internet users relying on internet for shopping and other transactions Positioning Positioned as best advertising and discount platform in the market
  21. 21. SWOT ANALYSIS Strength 1. Constant innovations and good branding 2. Vast network of retailers across nation 3. Excellent service through convenient processes 4. Wide range of deals and transactions to choose from 5. Lots of awards and recognition as best startups, ecommerce etc Weakness 1.Services not available in all cities 2.Dependence on internet only Opportunity 1. The markets devoid of internet 2.Customers reluctant in shopping online can be persuaded 3.Partnerships with bigger corporate houses for bulk selling Threats 1. Can be subjected to frauds 2. Risk of being involved into selling of illegal entities 3. Newly emerging competitive online shopping portals Competition Competitors 1. couponduniya.in 2. Khojguru.com 3. Fashionandyou.com
  22. 22. M-Commerce M-Commerce is also known as mobile electronic commerce or wireless electronic commerce. It is believed to be the next gold rush after e-commerce. Business organizations of different industries are rushing to stake a claim. However, m-commerce is many things to many people. Some people conceive m-commerce as an extension of e-commerce to mobile phones. Some people think it is another new channel after the Internet. In general, m-commerce refers to any transaction with a monetary value that is conducted via a mobile telecommunications network. According to this definition, m-commerce represents a subset of all e- commerce, including both business-to business and business to consumer. M- Commerce uses the internet for purchasing goods and Services as well as sending and receiving messages using hand- held wireless devices. Wireless web applications will enable users with Internet enabled cell- phones. M- Commerce is believed to be driving fundamental changes in the way business is conducted in many industries, particularly in telecommunications, information technology, media and financial services. Mcommerce is so important because it represents the extension of the Internet beyond the static terminal of the PC, or even the television, into a more nimble, anytime, anyplace and anywhere context. It will enable millions of people to access web information services wherever they go. It extends the reach of the e- services beyond the PC and the fixed network. Features:  Mobility: users carry cell phones or other mobile devices.  Broad reach: Easier information access in real time.  Convenience: Devices that store data and have internet, intranets, other mobile device, database.  Personalization: Preparation of offering for individual consumers.  Localization of products and services: knowing where the user is located at any given time and match service to them. M- Commerce is so important for the following reasons: • The number of mobile terminals available is larger than the PC user base and is growing much faster. • User’s intimacy with the terminals is higher. The terminal and service represents a more convenient and personal combination. • It is truly accessible anytime and anywhere. • It will enable employees to access information wherever they are and make decisions instantly without being confined to a desk or computer. • M-commerce eliminates many time- consuming tasks. Some important challenges are: • M- Commerce services have not been as rapid in the India as in Japan and Europe. • Keyboards and screens on cell phone are tiny and awkward to use. • Data transmission speeds on existing wireless networks are very slow, ranging from 9.6 Kbps to 14.4 Kbps compared to a modem of 56Kbps. • Most Internet enabled phones have minimal memory and limited power supply. • Web content on wireless phones are mostly in the form of text with very few graphics. • All web sites have still to configure their services t display text in such a way that it can be accommodated on cell phone screens.
  23. 23. • Unlike Europe and Japan, Wireless networks in the US are based on several incompatible technologies (CDMA & TDMA standards). • For M- Commerce to take off, more Web- sites need to be designed specifically for wireless devices. Disadvantage:  Expensive cost.  Display is not big, so not easy to perceive.  Speed is passive.  Limited for longer message.  It’s hard to fill the data  Security issues.
  24. 24. Products and services available Mobile Money Transfer In Kenya money transfer is mainly done through the use of mobile phones. This was an initiative of a multimillion shillings company in Kenya. Mobile money transfer services in Kenya are now provided e.g. (M-PESA and ZAP). The oldest has and is now generally used to refer to mobile money transfer services even by other companies other than. · Mobile ATM With the introduction of mobile money services for the unbanked, operators are now looking for efficient ways to roll out and manage distribution networks that can support cash-in and cash-out. Unlike traditional ATM, sicap Mobile ATM have been specially engineered to connect to mobile money platforms and provide bank grade ATM quality. In Hungary, Vodafone allows cash or bank card payments of monthly phone bills. The Hungarian market is one where direct debits are not standard practice, so the facility eases the burden of queuing for the postpaid half of Vodafone’s subscriber base in Hungary. Mobile ticketing Tickets can be sent to mobile phones using a variety of technologies. Users are then able to use their tickets immediately, by presenting their mobile phone at the ticket check. Most number of users are now moving towards this technology. Best example would be IRCTC where ticket comes as SMS to users. Mobile vouchers, coupons and loyalty cards Mobile ticketing technology can also be used for the distribution of vouchers, coupons, and loyalty cards. These items are represented by a virtual token that is sent to the mobile phone. A customer presenting a mobile phone with one of these tokens at the point of sale receives the same benefits as if they had the traditional token. Stores may send coupons to customers using location-based services to determine when the customer is nearby. Content purchase and delivery Currently, mobile content purchase and delivery mainly consists of the sale of ring-tones, wallpapers, and games for mobile phones. The convergence of mobile phones, portable audio players, and video players into a single device is increasing the purchase and delivery of full-length music tracks and video. The download speeds available with 4Gnetworks make it possible to buy a movie on a mobile device in a couple of seconds. Location-based services The location of the mobile phone user is an important piece of information used during mobile commerce or m-commerce transactions. Knowing the location of the user allows for location such as:  Local discount offers  Local weather  Tracking and monitoring of people
  25. 25. Information services A wide variety of information services can be delivered to mobile phone users in much the same way as it is delivered to PCs. These services include:  News  Stock quotes  Sports scores  Financial records  Traffic reporting Customized traffic information, based on a user's actual travel patterns, can be sent to a mobile device. This customized data is more useful than a generic traffic-report broadcast, but was impractical before the invention of modern mobile devices due to the bandwidth requirements. Mobile Banking Banks and other financial institutions use mobile commerce to allow their customers to access account information and make transactions, such as purchasing stocks, remitting money. This service is often referred to as Mobile Banking, or M-Banking. Mobile brokerage Stock market services offered via mobile devices have also become more popular and are known as Mobile Brokerage. They allow the subscriber to react to market developments in a timely fashion and irrespective of their physical location. Auctions Over the past three years mobile reverse auction solutions have grown in popularity. Unlike traditional auctions, the reverse auction (or low-bid auction) bills the consumer's phone each time they place a bid. Many mobile SMS commerce solutions rely on a one-time purchase or one-time subscription; however, reverse auctions offer a high return for the mobile vendor as they require the consumer to make multiple transactions over a long period of time. Mobile browsing Using a mobile browser—a World Wide Web browser on a mobile device—customers can shop online without having to be at their personal computer. Mobile purchase Catalog merchants can accept orders from customers electronically, via the customer's mobile device. In some cases, the merchant may even deliver the catalog electronically, rather than mailing a paper catalog to the customer. Some merchants provide mobile websites that are customized for the smaller screen and limited user interface of a mobile device. In-application mobile phone payment Payments can be made directly inside of an application running on a popular smartphone operating system, such as Google Android. Analyst firm Gartner expects in-application purchases to drive 41 percent of app store (also referred to as mobile software distribution platforms) revenue in 2016. In- app purchases can be used to buy virtual goods, new and other mobile content and is ultimately billed by mobile carriers rather than the app stores themselves. Ericsson’s IPX mobile commerce
  26. 26. system is used by 120 mobile carriers to offer payment options such as try-before-you-buy, rentals and subscriptions. Mobile marketing and advertising In the context of mobile commerce, mobile marketing refers to marketing sent to mobile devices. Companies have reported that they see better response from mobile marketing campaigns than from traditional campaigns. The primary reason for this is the instant nature of customer decision- making that mobile apps and websites enable. The consumer can receive a marketing message or discount coupon and, within a few seconds, make a decision to buy and go on to complete the sale - without disrupting their current real-world activity. For example, a busy mom tending to her household chores with a baby in her arm could receive a marketing message on her mobile about baby products from a local store. She can and within a few clicks, place an order for her supplies without having to plan ahead for it. No more need to reach for her purse and hunt for credit cards, no need to log into her laptop and try to recall the web address of the store she visited last week, and surely no need to find a babysitter to cover for her while she runs to the local store. Research demonstrates that consumers of mobile and wireline markets represent two distinct groups who are driven by different values and behaviors, and who exhibit dissimilar psychographic and demographic profiles. What aspects truly distinguish between a traditional online shopper from home and a mobile on-the-go shopper? Research shows that how individuals relate to four situational dimensions- place, time, social context and control determine to what extent they are ubiquitous or situated as consumers. These factors are important in triggering m-commerce from e- commerce. As a result, successful mobile commerce requires the development of marketing campaigns targeted to these particular dimensions and according user segments.
  27. 27. VRIO The VRIO framework, in a wider scope, is part of a much larger strategic scheme of a firm. The basic strategic process that any firm goes through begins with a vision statement, and continues on through objectives, internal & external analysis, strategic choices (both business-level and corporate-level), and strategic implementation. The firm will hope that this process results in a competitive advantage in the marketplace they operate in. VRIO falls into the internal analysis step of these procedures, but is used as a framework in evaluating just about all resources and capabilities of a firm, regardless of what phase of the strategic model it falls under. VRIO is an acronym for the four question framework you ask about a resource or capability to determine its competitive potential: the question of Value, the question of Rarity, the question of Imitability (Ease/Difficulty to Imitate), and the question of Organization (ability to exploit the resource or capability).  The Question of Value: "Is the firm able to exploit an opportunity or neutralize an external threat with the resource/capability?"  The Question of Rarity: "Is control of the resource/capability in the hands of a relative few?"  The Question of imitability: "Is it difficult to imitate, and will there be significant cost disadvantage to a firm trying to obtain, develop, or duplicate the resource/capability?"  The Question of Organization: "Is the firm organized, ready, and able to exploit the resource/capability?" Question of Value The basic question asked by the V in the VRIO framework for internal analysis is “Is this resource or capability valuable to the focal firm?” In this case, the definition of value is whether or not the resource or capability works to exploit an opportunity or mitigate a threat in the marketplace. If it does do one of those two things, it can be considered a strength of the company. However if it does not work to exploit an opportunity or mitigate a threat, it is a weakness. Occasionally, some resources or capabilities could be considered strengths in one industry and weaknesses in a different one. (Strategic Management Journal, 5, pp. 171–180. Barney, J.B. (1991)). Six common examples of opportunities firms could attempt to exploit are technological change, demographic change, cultural change, economic climate, specific international events, and legal and political conditions. Furthermore, five threats that a resource or capability could mitigate are the threat of buyers, threat of suppliers, threat of entry, threat of rivalry, and threat of substitutes. Generally, this exploitation of opportunity or mitigation of threat will result in one of two more outcomes: an increase in revenues or a decrease in costs (or both). A great way to identify possibly valuable resources or capabilities is by looking into the company’s value chain. In the value chain, a business develops its products and services step-by-step, with each function along the way adding some sort of value to the product or service. The choices a firm makes regarding its value chain (including how to operate, and which steps to operate in) is closely tied to the firms resources and capabilities, therefore making it a valuable tool in identifying value in resources and capabilities. If some asset that your company has allows you to operate more effectively in a certain portion of the value chain, chances are that resource will be considered valuable by the VRIO framework. Question of Rarity Having rarity in a firm can lead to competitive advantage. Rarity is when a firm has a valuable resource or capability that is absolutely unique among a set of current and potential competitors. How to determine if your resource is rare and creates competitive advantage? A firm’s resources and capabilities must be both short in supply and persist over time to be a source of sustained competitive advantage. If both elements (short supply and persistence over time) aren’t met, then the resources and capabilities a firm has can’t be a sustained competitive advantage. If a resource is not rare, then perfect competition dynamics are likely to be observed. Example of Rarity - A janitor who defines his/her job as helping the firm make and sell better products instead of just
  28. 28. referring to their job as simply cleaning up facilities is quite unusual. Most individuals would agree that this firm has a source of competitive advantage over other firms in their industry because their objectives and strategies are transparent throughout the entire firm; unlike many other firms where only top tier management is the only group that believes in their objectives and strategies (Barney & Hesterly, 2011). Question of Imitability The primary question of “imitability” asked in the VRIO framework in internal analysis is that “ Do firms without a resource or capability face a cost disadvantage in obtaining or developing it compared to firms that already possess it?” Firms with valuable and rare resources, which are hard to imitate by other firms, can gain the first-mover advantages in the market and can hence gain competitive advantage. A firm can either exploit an external opportunity or neutralize an external threat by using its rare and valuable resources. In this case, the firm can gain competitive advantage. When the firm’s competitors discover this competitive advantage, they may respond in two ways. First, they can choose to ignore the profit gaining by the competitive advantage and continue to operate in their old ways. Second, they can choose to analyze and duplicate the competitive strategy of its rival. If there is no cost or little cost in obtaining this rare and valuable resource, the fellow firms can imitate the competitive advantage in order to gain competitive parity (firms that create the same economic value as their rivals experience competitive parity). However, sometimes it is hard for other firms to get access to the resources and imitate the innovative company’s strategy. As a result, the innovative companies that implement its strategies based on costly-to-imitate and valuable resources can gain long-term competitive advantage, which ensures a company’s sustained success (Hill & Jones, 1998). Hence, to sustain the competitive advantage, it is not sufficient for a firm's resources and capabilities to be valuable and rare - they should also be inimitable. Forms of imitation In most cases, imitation appears in two ways, direct duplication or substitution. After observing other firms’ competitive advantage, a firm can directly imitate the resource possessed by the innovative firm. If the cost to imitate is high, the competitive advantage will be sustained. If not, the competitive advantage will be temporary. Otherwise, an imitating firm can attempt to use a substitute in order to gain similar competitive advantage of the innovative firm. Cost of imitation Cost of imitation is usually high in order to gain a competitive advantage due to the following reasons: unique historical conditions, causal ambiguity, social complexity, patents. Unique Historical Conditions: an innovative firm gains low-cost access to rare resources in a particular time and space. Causal Ambiguity: an imitating firm cannot tell the factors that lead to the competitive advantage of an innovative firm. Social Complexity: when the resources involved in gaining competitive advantage is based on interpersonal relationship, culture and other social background. Patents: a source of long-term competitive advantage certificated by authority in a few industries such as pharmaceuticals (Barney & Hesterly, 2011). Question of Organization Once you have realized the value, rarity and imitability of your company’s resources and capabilities, the next step is to organize your company in a way to exploit these resources. If done successfully, your company can enjoy a period of sustained competitive advantage. There are many components to this question of organization. They include, but are not limited to, the company’s formal reporting structure, management control systems and compensation policies. Formal reporting structures are simply a description of who in the firm reports to whom. Management control systems include both formal and informal means to make sure that managers’ decisions align with a firm’s strategies. Formal control systems can consist of budgeting and reporting activities that keep top management informed of decisions made by employee’s lower down in the firm. Informal controls can include a company’s culture and encouraging employees to monitor each other. Firms incentivize their employees to behave a
  29. 29. desired way through compensation policies. These policies can include bonuses, stocks or salary increases but can also include non-monetary incentives such as additional vacation days or a larger office. These components of organization are known at complementary capabilities and resources because alone they do not provide much value. However, in combination with a firm’s other resources and capabilities, it can result in sustained competitive advantage. Without the correct organization, even firms with valuable, rare and costly to imitate resources and capabilities can suffer competitive disadvantage (Barney & Hesterly, 2011). Valuable? Rare? Costly to imitate? Exploited by the organization? Competitive implication No Competitive disadvantage Yes No Competitive parity Yes Yes No Temporary competitive advantage Yes Yes Yes No Unexploited competitive advantage Yes Yes Yes Yes Sustained competitive advantage This model should always be a part of any company strategy to make it more successful and gain a comparative advantage.
  30. 30. SOME SUGESSTIONS FOR SUCESSFUL E-COMMERCE  Content: this includes that the product and services you are offering should be of good quality to gain the trust of the customers, this also helps in retention of the customers  Pictures: the product we are selling should have 360 degree view to grab the attention of the customers and provide them the virtual demonstration.  Marketing: marketing is the art of positioning your offerings better then the competitors to your target group. Here out target group is the internet users so our channeling should be more over based on internet. Here the majority of our media spent should be spent on digital channels.  Global while staying local: We might have the largest share in the world but if we are not able to localize our company’s message then the customers there might neglect us. So localization is the key here.  Payment methods: the payment methods should be convenient and secure.3rd party wallet is the future so the companies should adopt it to have the 1st mover advantage in this department.  Multi-device compatibility: the website should be mobile, tablets, phablets, and desktop compatible.  Google analytics enabled: Google Analytics is a service offered by Google that generates detailed statistics about a website's traffic and traffic sources and measures conversions and sales. The product is aimed at marketers as opposed to webmasters and technologists from which the industry of web analytics originally grew. It's the most widely used website statistics service. The basic service is free of charge and a premium version is available for a free. Google Analytics can track visitors from all referrers, including search engines and social networks, direct visits and referring sites. It also displays advertising, pay-per-click networks, email marketing and digital collateral such as links within PDF documents. This helps an organization to check its strategic fit.  Interactive website: so that the customer not even comes for shopping purposes also for entertainment this helps in targeting the impulsive buyers.

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