E-Commerce Business Plan

E-Commerce Business Plan

1

E-Commerce Business Plan By Mercutio Goins MGM310-1204B-06: E-Business December 25, 2012 Colorado Technical University

E-Commerce Business Plan

E-Commerce Business Plan 1.0 Executive Summary (E-Commerce infrastructure and goal achievement) 1.1 Mission (E-Commerce ethics in online business) 2.0 Marketing Vision (Positioning the e-commerce business with sound concepts) 2.1 E-Business Models 2.2 Purpose (Objectives) 3.0 Products and Services 3.1 Description of Product 3.2 Competitive Edge 3.3 Business to Business Technology 4.0 Market Summary Analysis and Industry Analysis 4.1 Marketplace Segmentation 4.1.1

Chart market Analysis (Pie, Table)

5.0 Strategy and Execution 5.1 Applications of B2B 5.2 Advertising Campaign (E-Commerce outlets through social media) 6.0 Website Plan Summary 6.1 Website Marketing Strategy

2

E-Commerce Business Plan

3

6.2 Developing the Website Necessities 7.0 Open and Overly Secure Environment 7.1 Open and Insecure Environment 7.2 Overly Secure Environment 7.3 Customers Protection Laws 8.0 Conclusion

E-Commerce Business Plan

E-Commerce Business Plan 1.0

4

Executive Summary Electronic Commerce (e-commerce) is the transferring of goods or services over the Internet in exchange for other goods, services, or currency. It is the sales facet of electronic business (e-business) which has very little limitations outside of a brick and mortar. Two aspects of e-businesses are business to consumer (B2C) and business to business (B2B). Business to consumer is the selling of goods or services directly to the consumer and business to business is the selling of goods or services to other businesses (amberleamoore.com). To have a successful e-business there are a couple of methods that the business must consider first. (1) They must know their target market and by knowing this they have a competitive advantage that allows them to have an edge on the competitors. (2) They must also know their value chain which is a series of transactions between all participants that influences the final product. The value chain is a place where the businesses need to be in order to identify the needs of its target market. By identifying the target market the e-business can bring forth a plan and use a combination of methods such as a portal that sends potential clients to the business and a transaction fee revenue model that enables the customer to pay for the product or service. 1.1

Mission The mission of an e-commerce business is to offer a dependable way of doing business through today’s technology by targeting the expected market through websites over the internet by offering reliable product and services.

2.0

Marketing Vision With the changing trends in today’s society and the way people shop and businesses do business each organization must be a step ahead of the competition. E-Commerce offers

E-Commerce Business Plan

5

companies in any industry, regardless of the product or service, a way of conducting business safely over the internet. An e-commerce business can position itself in the marketplace to be known as a brand that offers excellent services and products to consumers and other businesses which can be achieved through a number of outlets and strategic planning. 2.1

E-Business Models 

Business to Business (B2B) is the selling goods or services from one business to the next business.



Business to Consumer B2C) is the selling of goods or services from a business to the consumer.



Consumer to Consumer (C2C) is the selling of goods or services from on consumer to the next consumer.



Consumer to Business (C2B) is the selling of goods or services from a consumer to a business.

2.2

Purpose (Objectives) E-Commerce took doing business and online shopping over the internet to another level by being aware of the latest technology, devices and security. The purpose of e-commerce is to take advantage of the technology that exist by making transactions and online shopping more reliable, reasonable, and profitable for businesses.

3.0

Products and Services

E-Commerce Business Plan

6

Businesses and consumers are not limited in any form of doing business when it comes to selling their products online. The product can be anything that is tangible or edible and it can range from household goods to the food in the refrigerator. 3.1

Description of Product Online businesses can give detail descriptions of the product as well as having a virtual picture of the product for its customers to view. Therefore, it saves the company money from keeping the product warehoused inside a brick and mortar. The service that is offered through e-commerce is also described in detail so that the customers know exactly what they are expecting to receive.

3.2

Competitive Edge Companies that use the internet have a competitive edge on other businesses because they can use different types of outlets to reach potential customers. Using e-commerce also give the company an advantage of the competition because they can keep track of who is browsing their sites, who is buying their products/services, what demographics is making the purchases and also the average amount of money is being spent on their services and products. The Primary weakness of new e-commerce businesses is that they are new and they have to focus on their target market by generating awareness for their business through advertising and they have to position themselves in the market to generate sales. E-commerce marketing strategy is crucial when it comes to the success of their business.

E-Commerce Business Plan 3.3

7

Business to Business Technology There are several models to B2B technologies that apply to e-commerce such as the advertising revenue model, portal, content provider, affiliate revenue model, and subscription revenue model 

The advertising revenue model is used as pop-ups, videos, banners, and other forms of advertisement ads on websites that generates traffic flow to help generate income for a business (E-Commerce, 2012).



A portal is a search engine website that offers its visitor quick access to information of interest.



Content Provider is basically a content writer’s website that offers information ranging from news and weather information to entertainment and job guides.



Affiliate revenue model is a strategic partnership between merchants that share ads on each other’s website to generate traffic flow and sales.



The subscription revenue model is a content provider’s website that offers exclusive content to paid subscribers such as Netflix.

4.0

Market Summary Analysis The primary target market for e-commerce businesses is only limited to the amount of people who have access to the internet. According to Pongdom.com, that number is 2.3 billion and rising every second. 4.1

Marketplace Segmentation and Industry Analysis

E-Commerce Business Plan

8

Every second there are nearly eight new internet users added worldwide and according to some measures it is a third of the people in the world who uses the internet which means the market is barely tapped since there are about 7 billion people that live on earth. This gives us a total of 2.3 billion people who uses the internet. 4.1.1

Chart market Analysis (Pie, Table)

Internet Users users are in billions

6.9 2.3

People on the plannet Internet users

5.0

Strategy and Execution 

Utilize the brand-name power of the business



Strategically placed ads on internet sites that is associated with the business



Add the businesses products to other sites



E-mail advertisement



SEM (search engine marketing)

E-Commerce Business Plan

9

 Buying advertising space  Bidding on keywords that are significant to the business 

SEO (search engine optimization)  Not advertising  Uses key words to position itself

5.1

Applications of B2B Sales are reliant upon the awareness of the e-commerce business within the target market and it is based on driving business to the company’s website.  The service provider supply both free and web-based services such as apps.  The application service provider is a company that develops and improves those apps, software, and data storage capabilities that is made available to businesses and subscribers.  Private industrial network accommodates members of a specific industry or profession and they use a combination of different business models of ecommerce.  A transaction fee revenue model brokers transactions between two parties for a fee such as Paypal.  Differentiation is a clever marketing strategy that position businesses in the market to generate a greater volume of sales or web traffic.

5.2

Advertising Campaign (E-Commerce outlets through social media)

E-Commerce Business Plan

10

E-Commerce advertising is very important to the success and failure of the company and the advertising revenue model is the framework for monetizing advertisements which comes in different forms:  Pop-ups  Banners  Light boxes  Text  Video, etc. 6.0

Website Plan Summary E-commerce businesses must create and maintain their websites to suit their business needs. It can start out as simple text and image-based that will highlight their services or products and then it could redirect them to their Ebay account until their site is up and fully running. 6.1

Website Marketing Strategy The businesses website should provide information about the company and their products and services as well as processing the company orders. This can be done with an “about us” link or tab on the main page. The company’s logo should be eye catching and easy to remember so that the customer cannot only find them but also suggest them to other people.

6.2

Developing the Website Necessities

E-Commerce Business Plan

11

The website, depending on the type of business can have different types of tab buttons to showcase the businesses qualities such as the following:  Home tab  Membership tab  Career Center tab  Privacy Policy tab  Security Policy tab 7.0

Open and Insecure Environment 7.1

Owning an Internet business and supplying a way for customers to buy the businesses’ product definitely shrinks the cost of doing business around the board. Hosting a website is a lot cheaper than having to pay employees, rent and utilities just as a virtual storefront is not as expensive as operating a brick and mortar. Operating a business online has its advantages when it comes to selling product and the company must provide a way for consumers to buy the product. An open e commerce environment gateway page typically increases the transaction procedure for the reason that the page is not encrypted (smallbusiness.chron.com 2012). Although the page is not encrypted, it doesn’t necessarily mean that it will translate into sales. The down side to using an open environment e commerce business is that it can be easily hacked and the business’s personal information, users or customer’s information can be stolen. Since the site is open and insecure that leaves it open to be accessed by anyone when it is not encrypted.

7.2

Overly Secure Environment

E-Commerce Business Plan

12

Just as a physical brick and mortar business needs protection with locks, alarms, and bolts it is equally important to protect a business that has an online presence. Although sellers have a choice of operating their e commerce business in either a secure or insecure environment, they see advantages to creating a secure Website for their cyber portals that is open for business 24/7. In today’s information age, the customer who is buying an item online want it right away and they want to complete the transaction in as little as one step. They effortlessly want to complete the transaction with a sense of security. Customers who shop online will not buy off an insecure website because they fear that their personal information can be taken and used in other places which will ruin their credit and also empty their bank account. 7.3

Customers Protection Laws In conclusion, e commerce businesses can analyze their customers by location, through their purchases, name, and address with ease when they buy products from their website. This information is protected under certain laws like the Right of Privacy Act and the Gramm-Leach Bliley Act. These Acts were established to protect individuals from fraud and identity theft. The Right of Privacy act protected the customers’ the ability to determine what kind of information about themselves can be used such as their name, email, and demographic info (law.cornell.edu, 2012). The Gramm-Leach Bliley Act helped establish the guidelines for the customer’s personal financial information and the financial institutions are mandated to provide a privacy policy to customers about the information that is being collected

E-Commerce Business Plan

13

and how that information is being used (law.cornell.edu, 2012). There are numerous acts and laws that guard the customer’s rights to privacy and all businesses as well as e commerce businesses are obligated under the law to safeguard those customers from fraud and identity theft. 8.0

Conclusion To have a successful e-business there are a couple of methods that the business must consider first. (1) They must know their target market and by knowing this they have a competitive advantage that allows them to have an edge on the competitors. (2) They must also know their value chain which is a series of transactions between all participants that influences the final product. The value chain is a place where the businesses need to be in order to identify the needs of its target market. By identifying the target market the e-business can bring forth a plan and use a combination of methods such as a portal that sends potential clients to the business and a transaction fee revenue model that enables the customer to pay for the product or service.

E-Commerce Business Plan

14 References

Amberlea Moore, My Life…My Studies…My Rants…My Family…, retrieved on November 21, 2012 from amberleamoore.com E-Commerce (2012). Editorial Board (eBook). Schaumburg, IL: Words of Wisdom, LLC. Chron, Small Business, Advantages and Disadvantages of Doing E-Commerce Business in an Insecure Environment (2012) by Laurie J. Benner, Demand Media, retrieved on December 10, 2012 from smallbusiness.chron.com Cornell University Law School, Legal Information Institute (LII), Personal Information, Right of: Access to Personal Information, retrieved on December 10, 2012 from law.cornell.edu