MKW1601 HD Quality Assignment - Example 1

Table of Contents 1.0 Introduction ..........................................................................................Error! Bookmark not defined. 2.0 The e-Marketplace .............................................................................Error! Bookmark not defined. 3.0 Organization ......................................................................................................................................... 2 3.1 Possible Internal Organization & Functions.......................................................................................... 2 3.2 Possible firms, suppliers, business partners ............................................................................................ 3 3.3 Possible business processes ...................................................................... Error! Bookmark not defined. 3.4 Possible technologies ...................................................................................................................... 4 3.4.1 Hardwares, Softwares & Network and Telecommunications Technology ................................... 4 3.4.2 Payment systems and security issues .................................................................................................. 5

3.5 Value of the e-business system ..................................................................................................... 7 3.5.1 Tangible benefits and alignment with company vision/mission/strategy/objective ................. 7 3.5.2 Intangible benefits and alignment with company vision/mission/strategy/objective............... 8

4.0 Possible e-business issues .................................................................................................................... 8 4.1 Security and privacy issues ........................................................................................................................ 8 4.2 Marketing issues ........................................................................................................................................... 10 5.0 Conclusion........................................................................................................................................... 11 6.0 Reference List................................................................................................................................12 7.0 Appendix.......................................................................................................................................13

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1. Introduction Doorstep Retails Sdn Bhd represents Malaysia‟s largest online grocery shopping, offering a wide selection of products for both household and corporate consumption. Inculcated in November 2009, Doorstep provides its customers with the convenience of shopping through its online website, www.doorstep.com.my for groceries, lifestyle products, stationery and even catering services. The innovative shopping experience Doorstep introduced has proved to be successful, as evidenced through its escalating revenue; earning RM1.5million in 2010 and RM7.5million in 2011 (Singh, 2012). This was achieved by thoroughly embracing ecommerce platforms wherein management, security, logistics, marketing, IT, customer service and operations are integrated to reach maximum time and inventory efficiency.

2. The e-marketplace Doorstep operates a typical pure play e-marketplace in which customers and seller carry out different types of transactions and customers exchange goods and services for money (Turban, King, Lee, Liang & Turban, 2012). The company conducts a private sell-side emarketplace, where products are offered to many individuals and businesses; a one-tomany approach in e-commerce. Its B2B product offering include catering services and office pantry supplies whereas household consumers can shop for groceries and lifestyle products. Apart from its main operation of an electronic storefront, Doorstep also has plans to launch an electronic mall in the third quarter of 2012 (Augustine, 2012). The latter is distinguished from an electronic storefront in that it displays electronic catalogs from several suppliers or stores (Timmers, 1998). Front-end activities in the company include electronic catalogs, shopping cart, search engine, payment gateway and a user-friendly website. To accommodate the operation of the business, back-end activities such as order fulfilment, inventory management, payment processing and delivery are put into place.

3. Organization 3.1 Possible Internal organization functions 3.1.1. Finance Computes customer bills and receipts electronically and sends it to customer via electronic medium- in Doorstep‟s case, customer emails. Facility of online transactions simplifies and improves efficiency and accuracy of transactions.

3.1.2. Sales and Marketing Doorstep‟s marketing strategies include penetrating social media such as Twitter, Facebook and others to raise awareness and promote the brand (see Appendix 1-6). Web-based analytics and potentially, cookies are also used in online traffic monitoring and subsequently

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predict consumer behaviour. This enables Doorstep to conduct behavioural targeting and collaborative filtering. On the other hand, graphic designers ensure that the website is userfriendly and appealing to its customers. Once the electronic mall is launched, the sales and marketing division will also be responsible for ad space offered to participating companies.

3.1.3. Customer Service Apart from being able to contact Doorstep via its toll-free customer care hotline, consumers are also able to field enquiries and feedback through its 24-hour order support website and email. Prompt response is ensured by the company.

3.1.4. Logistics and warehousing Doorstep implements a warehouse complete with office automation systems, thus allowing for better inventory management. To maintain a high quality level, Doorstep refrains from outsourcing warehousing. With an integrated system between customer order, inventory, delivery and packing, efficiency of operations are sharpened. For example, customer orders are immediately checked against available inventory. The delivery team is also able to organise items based on delivery times allocated by customers, thus ensuring they deliver the right products to the correct customers at the appropriate time.

3.1.5. Public Relations Doorstep‟s public relations team deals with media communication. Examples include radio interviews on BFM 89.9 and press releases involving Doorstep‟s corporate activities.

3.2

Possible firms, suppliers and business partners

3.2.1. iPay88 Doorstep has a strategic partnership with Malaysian payment service provider, iPay88, allowing them to accept a variety of secure online payment option such as credit card, debit card and bank transfers when customers transact with the company. iPay88 also offers developed payment plug-in for shopping carts.

3.2.2. Large retailers With the impending launch of the electronic mall, Doorstep seeks to form alliances with large retailers nationwide to extend its reach to customers in Malaysia. For example, when a customer enters his/her postcode in Doorstep‟s web portal, the system automatically links the customer to retailers in that area who supply products that the customer seeks.

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3.3

Possible business processes

3.3.1

Integrated accounting platform

Customer orders and payment are automatically updated in Doorstep‟s accounting platform. The integration of finance and accounting allows for accurate and automatic generation of trade statements, thus enabling retailers to make informed and swift business decisions.

3.3.2

Order fulfilment

This represents e-commerce‟s key to success; being able to give customers what they want, when they want it and how they want it with the lowest cost (Ricker & Kalakota, 1999). Doorstep integrates its distribution with transportation planning and scheduling, thus ensuring optimal time efficiency. Doorstep‟s automated inventory system also allows the company to continuously monitor and receive alerts should inventory fall below a prerequisite level. This prompts the company to immediately- and possibly automatically- contact suppliers for restock (see Appendix 7).

3.3.3

Customer relationship management (CRM)

CRM oversees the aspect of customer relationships to improve loyalty and customer retention, subsequently boosting a company‟s profitability (Baltzan, Phillips & Haag, 2009). Doorstep embraces social media such as Facebook and Twitter to empower customers with information and sales promotion, whilst incurring minimal costs. Feedback and enquiries can also be directed to the company via discussion on Facebook or by emailing the 24/7 customer support.

3.4

Possible technologies

3.4.1

Hardware, software and network telecommunications technology

The widespread use of Internet in e-commerce can greatly reduce barriers of distance and improve access to global economy (Graham, 2008). This is however, not accomplished without the hardware, software and network communication technology that provides virtual and physical integration of business components. Hardware used at Doorstep‟s headquarters in Batu Caves includes computers, fax machines and multi-peripheral printers. These machines provide Doorstep‟s employees with the ability to carry out back-end operations. Software employed at Doorstep includes web-based analytics that allows the company to monitor online traffic and consumer behaviour. An online inventory management system is also in place to control and oversee the level of stock-in-hand. It is further presumed that Doorstep uses Flash and Adobe Photoshop software within its marketing department to design appealing graphics on its Website. In addition, Doorstep implements a highly

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interactive website using Web 2.0, which provides customers the ability to share and comment on information content in the Website, not to mention its Facebook and Twitter account. Electronic data interchange (EDI) is also widely used in Doorstep‟s e-commerce platform. EDI allows for the exchange of business documents with external entities, and integrates the data from those documents into Doorstep‟s internal system, thus increasing seamless information transfer. The most prominent network and communication technology used by Doorstep is the Internet, which represents the main gateway through which communication between customer and company- and ultimately, revenue generation- takes place. Through the Internet, customers are able to view products, conduct online transactions and provide feedback to the company. An intranet, which employees of Doorstep‟s are granted access to, allows for information sharing, collaboration, sales and customers relationship management and project management (Bernard, 1997). On the other hand, mobile commerce technology allows the Doorstep website to be viewed on mobile phones. This provides greater convenience and access by Doorstep‟s customers.

3.4.2

Payment systems and security technologies

Doorstep offers its customers a variety of payment methods in recognition of different customer needs and level of confidence. Three main payment methods are available; cash on delivery, credit/debit card and Internet transfer. Cash on delivery is the safest method from the perspective of the customer, where financial exchange is done at the time of actual delivery of products. An issue that arises from this payment method is fraud and prank callers. To mitigate the problem, Doorstep requires a credit card number before a delivery is sent. Doorstep supports credit and debit card payment to keep up with the increasing usage of such payment methods online. Stringent rules such as security protocol and procedures applied by credit/debit card issuers such as MasterCard and Visa must be complied with by Doorstep. This may include having a certificate from an authorised certification authority (CA) who provides PKI infrastructure for securing credit/debit card transfer. In addition, Doorstep‟s credit card payment system requires customers to obtain a pin number from respective issuing banks before confirming the payment (see Figure 1). To enhance customer‟s level of confidence in transaction with credit/debit cards, Doorstep also includes the „verified by Visa‟ and „Mastercard Securecode‟ logo on their website (see Figure 2).

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Figure 1: Pin code request prior to confirming payment via credit card.

Figure 2: Payment security in Doorstep.

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3.5

Value of the e-business system

3.5.1

Tangible Benefits and alignment with company vision/mission/strategy/objective

Doorstep gained tangible benefits such as time and cost efficiency. Shopping online reduces the need to print catalogues and excessive packaging, thus reducing cost. Furthermore, the “Go Green” concept Doorstep practices reduces the need to provide plastic bags as groceries will be sent to customer‟s doorstep in a huge basket- another cost saver. Effective management by the company also reduces the need to hire excessive employees; Doorstep has a medium number of staff and a management team, which has more than 34 years of experience in retail and customer management locally and internationally. All these align with the company‟s vision of being a cost-efficient company. The e-business system further enables Doorstep to enhance its customer relationship through viral marketing via social networks. For example, Doorstep posts special coupons and announces latest sales on their Facebook page. It also manages a blog in their website, where information on current product offerings, media news and also guest bloggers are featured to write a review about Doorstep. These will concurrently increase interaction with customers and instil brand awareness. Newsletters will also be sent to keep customers wellinformed. Furthermore, Doorstep runs a loyalty programme to award redemption points to customers, in line with their visions to build an affirmative customer relationship base. The e-commerce platform that Doorstep operates also reduces the amount of variable costs such as rental and electrical fees and excessive amount of staff. Cost savings will be instead allocated to hiring experienced staff.

For example, Doorstep hired a former Tesco UK

personnel with experience in handling online services. This would help Doorstep learn the best methods to reduce mistakes in e-business. A strong logistics team also entitles Doorstep to greater control over delivery where in-house handling provides an added advantage of efficiency when dealing with customers. Indirectly, these cost savings through better usage helps Doorstep garner more profits. Apart from that, Doorstep also serves as a B2B website delivering goods such as pantry supplies and office equipment to companies. The nature of companies who buy in bulks also increases Doorstep‟s profits. Therefore aligning it with their vision to maximize long time return to shareholders and employees whilst maintaining value for customers (Doorstep, n.d)

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3.5.2

Intangible benefits and alignment with company vision/mission/strategy/objective

One of the intangible benefits gained by Doorstep is high quality of work life which is described

as

one

that

includes

a

challenging,

interesting

and

responsible

job.

Communication is the key for Doorstep‟s success where the company practices downward, upward and horizontal communication (Simpson, 1959). Downward communication in Doorstep provides a channel for directives, instructions and information to organization members. On the other hand, upward communication allows Doorstep‟s staff to provide feedback of information to the top management. Finally, horizontal communication allows Doorstep to enhance coordination. Through effective communication, employees have greater inclination towards their work and take initiatives to speak out and are heard. Doorstep strives to improve customer service by providing a customer service hotline and email account specifically for customer service and technical assistance. Doorstep also provides a page on Frequently Asked Questions (FAQ) to assist customers. This aligns with the company‟s mission to offer products with exceptional service. Besides that, Doorstep also employs highly trained support and delivery staff to fulfil customers requested time slot for delivery via use of trucks/vans. These vehicles will make one round trips to cover specified routes. Indirectly, it also reduces environmental impact. Furthermore, Doorstep would be able to improve their strategic position where it allows people to shop 24hours a days, 7 days a week from their homes. Online shopping provides Doorstep customers easier product navigation in a short span of time. This provides a competitive advantage over offline grocery stores such as Carrefour and Giant. This would be able to align with their mission of being indispensable to customers as their hassle-free alternative (Doorstep, n.d.).

4. Possible e-business issues 4.1 Security and privacy issue The threats faced by Doorstep are not the same as those faced by storefront operations in terms of method, scale and geographical area. Keeping up with risk is challenging due to Internet technology moving at a rapid race. These can happen due to developments made without careful consideration to security. Alan and William (2002) state that an important security issue in e-business is buying, selling and transacting money via Internet. One of the issues is primarily privacy and confidentiality. Since data travel over the Internet goes through numerous intermediary sites and routed considerably before reaching the final destination, information might land in the hands of wrong persons.

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Another issue Doorstep faces is theft and fraud. Many companies do not have adequate control to prevent and detect potential breaches. This would pose threat to Doorstep‟s customers as personal or credit card information and passwords could be obtained. However, this can be mitigated by implementing security plans such as card verification number (CVN). Here, fraud is detected by comparing the 3-digit verification number the customer gives with the information from the cardholder‟s issuing bank (Ratnasingam, 2003). Besides that, safe harbor rules offer services such as feedback forum, insurance and ID validation could be implemented into the system. Doorstep could also face denial of service attacks which would bring down the service offered to customers. This would eventually cause losses of revenue when a company‟s key transaction server is brought down and customers cannot place orders, ultimately leading to negative publicity. Another concern for Doorstep is repudiation where business or customers deny that they made the transaction which in reality they did. This is hard for Doorstep to make verification in this issue thus proper controls are needed to ensure integrity and nonrepudiation. Doorstep mitigates these risks by assuring customers that they provide a safe and secure purchasing environment through strict security and privacy policies with no hidden cost and ensures confidentiality and security during purchase (see Figure 3). Besides that, Doorstep would not store customer‟s credit card information as all transactions are handled by trusted merchants approved by banks. Customers also have the option of paying cash on delivery with a minimum RM50 order.

Figure 3: Doorstep‟s security of information. Source: http://www.doorstep.com.my/

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4.2 Marketing Issues It is important for Doorstep to assure customer satisfaction of the quality and freshness of its products to ensure repeat purchases (Zeithaml, 1993). Customers would only return to Doorstep and repeat purchase again if they believe that the site is the best option in purchasing goods and whether they feel a connection to Doorstep. This connection is a function of web design, as customers see and interact with a company via the web interface (Kaplan & Norton, 1996). Therefore, Doorstep has been adopting systematic Quality Control System of product supplies to keep them fresh. Doorstep also faces marketing issues such as consumer trust. Mukherjee and Nath (2007) state that trust is the central tenets in building successful long-term relationships in ebusinesses. Companies need to convince the public that shopping online is a safe method as they might face user resistance. This is due to some companies not fulfilling their promises in delivering goods. Therefore, Doorstep requests some loyal customers to post testimonials to reduce new customers doubt. In tandem with the growing demand of shopping online, the number of retailers providing online services has also increased. Doorstep faces competition as customers can easily compare prices and find alternatives over the Internet. Besides that, traditional hypermarkets such as Giant will remain one of the competitors as goods are perishable and would reduce the risk of getting default goods. However, Doorstep mitigates this issue by using Quality Control System, which reduces the level of default goods. The other issue of Doorstep‟s delivery coverage is shown in Figure 4. Doorstep has not fully penetrated the whole Malaysia, thus limiting their exposure to public. However, Doorstep will try to widen their scope of delivery to create brand recognition. Lastly, segmentation is another key issue for Doorstep. Since the older generation prefers purchasing goods from traditional grocery stores, Doorstep should target the younger, working adults and technology literate generation. Therefore, it is vital for Doorstep to strengthen their marketing efforts to better reinforce their presence as an online grocery leader by using strong advertisement and also better educate the public about the benefits of online shopping (Fulgoni & Morn, 2009).

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Figure 4: Coverage regions by doorstep.com Source: http://www.doorstep.com.my/

5. Conclusion As the dust from the boom and bust has settled, we realize that e-business didn't bring the hyped overnight revolution, nor did it die with a whimper. Instead it brought about a fundamental evolution in the way Doorstep operates and conducts business with their customers. Online shopping is one of the best remedies for time and cash management, especially during festivals. The convenience of online shopping is not easily beaten. Not only can customers easily check the pantry to see if they have forgotten anything important, they can modify the virtual cart easily right up until they go to the checkout page. Most importantly, it has been found that there has been a positive change in customer‟s perceived trust and satisfaction with Doorstep. However, it is crucial to provide value to the customers through service and goods provided, improved customer service, build customers trust, avoid the misuse of technologies, protect customer‟s privacy and maintain the companies‟ reputation. In conclusion, in order to create an effective infrastructure for securing e-business, Doorstep also had comprehensive development of several elements including laws, policies, industry self-regulation, technical standards and law enforcement which are the key elements of their success. (2310 words)

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6.0 Reference List Alan, D. S. & William, T. R., (2002), “E-Lending: Foundations of financial and consumer marketing in an information intensive society,” Journal of e-Business and Information Technology, 3(1), 5-19. Augustine, S. (2012, February 10). Foot in the door. Malaysia SME, p 22-23. Baltzan, P., Phillips, A. & Haag, S. (2009). Business Driven Technology (3rd Ed.). United States of America: McGraw-Hill Irwan. Bernard, R. (1997). Corporate Intranet (2nd ed.). USA: John Wiley & Sons Inc. Fulgoni, G., & Mörn, M. (2009). Whither the click? how online advertising works. Journal of Advertising Research, 49(2), 134-142. Graham, M. (2008). Warped geographies of development: The Internet and theory of economic development. Geography Compass, 2(3), 771-789. Kaplan, R., & Norton, D. (1996). The balanced scorecard translating strategy into action. Boston: Harvard Business School Press Mukherjee, A. and Nath, P., (2007), “Role of electronic trust in online retailing: A reexamination of the commitment-trust theory,” European Journal of Marketing, 41(9/10), 1173-1202. Ratnasingam, P. (2003). Trust and Business-To-Business E-Commerce Communications and Performance. Advances in Business Marketing and Purchasing, 12, 359–434. Ricker, F. & Kalakota, R. (1999). Order Fulfillment: The hidden key to e-commerce success. Supply Chain Management Review, 8(11), 60-72. Simpson, R. L. (1959). Vertical and Horizontal Communication in Formal Organizations. Administrative Science Quarterly, 4(2), 188-196. Singh, K. (2012, May 25). Doorstep puts e-commerce in bold. Digital News Asia, 8. Timmers, P. (1998). Business Models for Electronic Markets. Electronic Markets, 8(2), 3-8. Turban, E., King, D., Lee, J., Liang, T.P. & Turban, D. (2012). Electronic Commerce 2012 (7th ed.). USA: Pearson. Zeithaml, V., Berry, L., & Parasuraman, A. (1993). The nature and determinants of customer expectations of service. Journal of the Academy of Marketing Science 21 (winter): 112.

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7.0 Appendix

Appendix 1: Sales and marketing function of Doorstep; advertising on Facebook and Twitter.

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Appendix 2: URL marketing used by doorstep in search engine

Appendix 3: Radio Advertisements and TV commercial.

Appendix 4: Advertisements on tax

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Appendix 5: Viral marketing used by Doorstep (Facebook, Twitter, Blogger)

Appendix 6: Mass media marketing advertisements

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Appendix 7: Oder fulfilment process in Doorstep.

Customer logs into Doorstep account.

Customer selects and adds desied product into shopping cart.

Online inventory system checks for availability of stock.

Customer selects payment mode: COD, credit/debit card, bank transfer.

Customer confirms order. Email with order details and confirmation number is sent to customer

Customer proceeds to checkout. Delivery address is verified and delivery time slot is selected.

Doorstep's warehouse is notified of new order.

Items are packed and sent to delivery dock for collection.

Doorstep's delivery van collects the parcel and sends to the customer.

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