Business Management – E-Business
Business Management – E-Business
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Business Management – E-Business
Folks believe that any single person has the ability to innovate since most individuals simply hold to the ideology that to innovate is to invent a totally different approach for doing things. The ability for an organization to bring in innovation into its business can be a key determinant for the organization being able to save not just time but also a significant amount of money, and earn it the most significant thing over its business rivals; the competitive advantage. When any organization has achieved an edge over its substitute producing companies, it will have the chance not just to grow but to also ensure that it fully adapts to the marketplace where the organization is currently operating it. This brings us to the key terminology in this case, what does one imply when they mention the terminology, invention; it is simply the ability of an organization to create products, processes, and even ideologies that are much effective. It can be achieved through the implementation of fresh ideologies, creation of products that are totally dynamic, or ensuring that the services that are currently being provided are taken through as adequate improvement as possible. This whole process of innovation has the ability to catalyze how the business will grow and the ultimate success that you are going to have in your industry and your organization grows. Further, to be innovative does not just imply carrying out the actual innovation. It can just mean the process by which an organization can have its business model changed so that it can adapt to the environmental changes to ensure delivery of improved services or even products. For the strategy to be considered as being successful, it should be one of the in-built portions of the organizational strategy, where the concerned business can create a given cultural practice of innovation and take the front seat as far as innovative thinking and providing solutions to problems is concerned. Finally, innovation has the ability to increase the odds of a particular business enterprise either succession or not. The organizations that indulge in proper innovation are always able to create work processes that are very efficient and have enhanced productivity and even performances. One of the greatest innovations has always taken place in the online businesses across the globe. With the development of the internet and its subsequent availability across the globe, possessing one of an individual’s favourite commodity or being provided with one of the best services have been elevated to a whole new level.
Businesses have been able to come with improved ways of ensuring that their services and products are easily availed to their esteemed consumers, wherever they are. Anticipating consumers can just grab their smartphones, laptops, or even tablets and have their most coveted commodities delivered right at their doorsteps. Some of the e-businesses that are making it big include OLX India, Lazada Singapore, and Amazon in the Brazil. In this deliverable, the three e-businesses will be greatly and comprehensively analyzed.
Analysis of the Business Model Used by Amazon, Brazil
Amazon is considered as not just the largest online retailer in the Brazil, but across the globe as well. Amazon.com should not be in any way considered as simple business enterprises. The organization has a customer retail business that fully qualifies it to be more of a traditional retailer. As much as Amazon has kept the agility going forward of having its products sold at standard prices, it has also been known for its tradition of pioneering alternative strategies for retailing due its ability to act as a gateway for other substitute retailers and has also gained the reputation of being a very huge business ground for goods that has been used. However, when talking about Amazon.com, retailing is just a tip of the iceberg.
Amazon’s Line of Business
The organization is known for its definition of its line of business on the basis of the product sales, the sales of services, publishing, and subscriptions of digital content, advertisements, and the credit cards that are co-branded. This clearly shows that the line of business that the organization has assumed can majorly be subdivided into the following key categories. They include:
Ø Online retail
Ø Internet Services, and
Ø Kindle ecosystem
Online Retail
This has been one of the greatest categories that the organization has taken full advantage of. The online retail spans through the line of business where the organization is selling its products majorly as some form of a traditional retailer, and most occurs as some retailer for low-cost commodities. This has made the organization to make one of the boldest statements business today as being, “Biggest Selection on Earth,” due to products that it has availed on its websites, and being sold at considerably low costs of reduced profitability.
However, it should be noted that Amazon does not stock all of the products that are being offered on its website. This is because, the organization has partly served as a channel through which other retailers get the opportunity of having their products sold and then, it is known to taking a cut of each of the purchases made. This has made the organization to maintain a status that is considered more of a destination website and hence has no obligations of maintaining any elements of inventory on the products that are slow-selling. The strategy has made the organization to be considered as the top most long-tail retailer, enabling it to provide an expansion of the selections that are readily available without necessarily experiencing a corresponding increment in the overhead costs. To ensure that this strategy is prolonged, the organization made a wise business strategy of having used products sold on the seller marketplace on its website.
Internet Services
Amazon has taken the initiative of providing other services like the case of the Amazon Prime, which can provide absolutely free two-day shipment of the purchases made on the retail stores, video streaming that are on demand, and also enable users to freely access the Kindle library.
Analysis of the Business Model used by Lazada, Singapore
Lazada is operated by Lazada and is considered the leading online selling and buying hub in the Southeast Asia. The organization has spread swiftly and currently runs of the leading stores across the South-Eastern countries, with Singapore included. The online store became operational in March 2012, and has since grown to unprecedented heights. Lazada has continued to pioneer the eCommerce business in Singapore and provides the consumers with a variety of methods of making payments (Lazada Group Singapore, 2015). They include:
Ø Cash-on-delivery
Ø An extensive care center for the consumers
Ø Providing the consumers with the opportunity of making free returns
The organization has also taken the center stage due to its wide range of products ranging from electronics to the domestic goods, sport equipment, and even fashion. Strategy refers to a course of action that needs to be followed for the interest of achieving various goals and objectives (Erica, 2011). Organizations usually have various goals that should be met. For this to be achieved, they need a strategy. The definition of strategy fits Lazada and its situation because the company always has a course action in place. Lazada believes that through the implementation of relevant strategies, it can achieve its goals and objectives in the most effective and efficient manner. This has seen the organization aiming to have the retail in the Southeastern parts of Asia revolutionized; as could be seen by Lazada Singapore realizing the most current trends in the shopping world on 5th November 2015 and proceeding to launch one of the biggest shopping events in this current fiscal year.
Description of Product/Service
The benefits of the digital world and the lines between the physical shopping experiences are converging to create a new retail experience based on excitement, convenience, and ease. There exist trends in the retail industry which are likely to make the future of the industry brighter for Lazada and other companies operating along this line. Firstly, it is important to consider all-inclusive mobile shopping experiences (Pantano et al. 2014). The emergence of personalized shopping trips and mobile apps are changing retail. Lazada Singapore has also noted that the recent years have witnessed a surge in the nature in which individuals carry out their online shopping experiences. Lazada has assumed the capacity as not just the leading online shopping enterprise in Singapore, but is also regarded the powerhouse when it comes to both selling and shopping online. The digital personal concierges are used in welcoming shoppers into stores; with some stores using the iBeacon technology to as a form of digital messaging to guide purchases to their favourite goods and services, alerting them of the new deals and discounts (Pantano et al. 2014). Mobile shopping apps are increasingly improving the area of customer service. The organization has a staggering five million visitors who pay homage to its online store on a daily basis.
Lazada Singapore has witnessed the number of smartphone apps downloads go up beyond the 20 million mark since it provided it to the software powerhouses, Android and iOS. The organization also notes that most of its shoppers tend to take most of their time on the site when they are on the move as compared to the individuals using the desktop computers. Through tablet devices or mobile, sales representative can respond to questions immediately, construct customized shopping experience and pull up buying histories of customers that is profitable for the store and convenient for the customers.
Lazada Singapore has been able to revolutionize the retail industry where it operates because of the presence of its networks of logistics and vender solutions. The online platform it uses has enabled a wide range of local small and the businesses of the medium-sized category to get an access to the millions of possible consumers through the online interface and hence boosting their sales. There are other larger players who have squeezed this opportunity provided to them by Lazada Singapore to ensure that they have their brands expanded to the readily available market in the Southeast Asia. By the month of September 2015, Lazada Singapore had a staggering 30,000 sellers, both from the local and international domains (Lazada Group Singapore, 2015). Further, Lazada has continued to use the smart shelving and 3-D holograms, which are making the retail industry more mature than what we have seen in the past (Pantano, et al. 2014). Advanced holograms assist the customers in better visualization of the upcoming products, Retail stores strategically position the eye-catching 3-D renderings in glass windows and at checkout counters to engage the customers at higher levels. For instance, the technology-based intelligent shelving by Intel positions prominent digital displays close to new products to increase awareness amongst the customers. The displays are updated easily to move products efficiently before their sell-by dates. This innovation can help retail stores improve sales and revenue on several products.
On an annual basis, Lazada has been holding the Online Revolution, which is undoubtedly considered the greatest shopping event that occurs every single year. It is always launched fully on the 11th day of November, and culminates with a three-day finale by 12th December every year (Lazada Group Singapore, 2015). The month always provides shoppers with the opportunity of getting favorable deals and some quite flashy sales, best offers on a daily basis, specials based on product category, and much more. Lastly, the improved self-checkout experiences are improving the maturity of the retail industry. When the self-checkout kiosks were introduced by grocery stores, they got it right there. The tactic can continually be used on larger scales in several other retail verticals. For instance, the EasyPay self-mobile checkout by Apple is an important innovation that is helping revolutionize the customers’ experiences as they grow in their comfort using contactless payments (Sorace, Pantano, Priporas, & Iazzolino, 2015, November). From these perspectives, the future of the retail industry is not bleak. The brick- and-mortar retail stores are continuing to combine the benefits of the digital and physical world to become mature and hence gain positive response from the loyal customers.
The first case being considered in positioning by the organization are the performance goals.When a business is established, its major purpose is to grow from one level to another. To achieve this, performance goals are usually set, and they determine whether or not the business is growing on not depending on their level of achievement. In the next one year, Lazada has three specific goals that should be achieved. The first goal is an improvement in customer service. The company understands that customers are important assets that should be focused on. Improvement of service provision to them is necessary. Better customer service makes the customers feel important to business, and they will remain loyal because they like the services provided to them. The second goal is employee satisfaction. In the next one year, the company intends to improve the overall conditions under which employees work. This is intended to boost job satisfaction as well as performance. Better working conditions improve the level of employee satisfaction. The last performance goal in the next one year by Lazada is to ensure that there is a remarkable improvement in terms of sales. To achieve this, the business intends to boost its marketing so that it creates awareness and demand for the different products that it offers. Through this, sales will be more frequent, and there will be more revenues realized (Adekola & Sergi, 2012).
One of the goals of Lazada in the next five years is the achievement of corporate social responsibility. The business intends to expand its services to the surrounding communities by enabling them to meet their objectives. This will also be achieved through the application of environmentally friendly strategies. The second goal is to build a positive organizational culture. This is intended to boost the overall performance of the business. The last goal for Lazada in the next five years is about brand recognition. The business intends to boost the recognition of its brand across the world especially in the most remote areas in which it is not yet present.
The organization will also continue to use vertical integration over outsourcing for the production of its services. Firstly, vertical integration is cost effective. Because of the eliminated market transaction cost, implementing vertical integration at Lazada will control costs using their supply and distribution strategies and channels. More importantly, by setting the goods and services directly to the consumers without third party involvement, Lazada can minimize the distribution costs and hence increase their profits. Secondly, vertical integration is important for Lazada since it is a weapon against competition and the competitors. Components business can be applied as a competitive weapon (Markusen, & Xie, 2014). Using vertical integration, and according to Porter’s force of threat of new entrants, high barriers can be set by Lazada for those newly entering the market.
Thirdly, for Lazada Singapore, vertical integration is important because of secured supply. With vertical control, Lazada can take more control over the supply and distribution (Lazada Group Singapore, 2015). When the company outsources from other firms, several uncertainties come up, especially when the outsourcing company is also a competitor. Once Lazada Singapore supply chain is controlled by itself, it can ensure their sufficient supply. The other strength of vertical integration is its ability to allow for positive differentiation. Positive differentiation can give Lazada access to more process and retail channels, more production inputs and distribution resources (Markusen, & Xie, 2014). However, vertical integration has weaknesses such as capacity-balancing challenges when Lazada needs to create the excess upstream capacity to ensure the downstream operations get sufficient supply; decreased feasibility; can create barriers to market entry; and requires extensive capital used in investment (Markusen, & Xie, 2014). On the other hand, outsourcing according to the pyramid, has some setbacks. Loss of managerial control of the outsourced roles is top of the list. Secondly, Lazada is likely to suffer hidden costs in the implementation of outsourced roles (Markusen, & Xie, 2014). The third challenge is that outsourcing can be a threat to confidentiality and security, especially on customer information.
Since the retail market is growing, investment is required in the assets to increase capacity and hence lead to consumption of cash. The four categories of the matrix are dogs, question marks, stars and cash cows. Dogs have low growth rate and low market share, and hence neither consume nor generate large cash amounts. As of 2013, Lazadabusiness units were in this category. Secondly, question marks grow rapidly, and hence large amounts of cash are consumed, but since they have low market shares, much cash is not generated. The net cash consumption is, therefore, larger. Stars, on the other hand, generate large cash amounts owing to their strong relative market shares, but large amounts of cash are also consumed since the growth rate is high, and therefore the cash in each direction gets out approximately. As of 2013, the strategic position of Lazadawas that of cash cows (Palia, De Ryck, & Mak, 2014). Since Lazadahas been a leader in the mature retail market, it exhibits a return on an assessment that is larger than the market growth rate.
Decision-making remains a key pillar of Lazada’s success, not today, but even tomorrow. Therefore, effective changes should be implemented aimed at improving results and efficiency of operations both in the Singapore and other stores offshore. Making effective decisions require the input of a lot of information on the issue at hand. The management of the organization should involve employees more regularly and deeply in decision-making process. Business analytics and technology should also be integrated into the decision-making process.
Analysis of the Business Model Used by OLX, India
One of the greatest questions that individuals have always been asking themselves in how OLX really makes its money. In India, OLX has gained relevance and is considered one of the most popularly recognized business enterprises in the country. In all of the countries where OLX has operated in, India has taken its place at the top as the leading destination where the business empire has gained much success that is quite incomparable. It came as a surprise that, due to the popularity of OLX in India, Google was forced to bring down its related online classified website, the Google Trader.
Just like other related e-classified websites for advertisements, OLX in no way involves having one’s goods and services sold via the website. The website offers just a platform where the sellers can freely have their goods and services posted. This type of a business model has its forms of repercussions as it limits the potential that the e-commerce site provides. This is because the sellers in rare cases makes the acceptance of settling the listing bills.
Due to the underdevelopment of the e-commerce environment in countries like India, OLX has constantly missed out on charges for listing that organizations like EBay and Amazon have thrived on. The following are some of the ways in which OLX India, is using to ensure that it gets the much-required revenue to support its expansion and growth. The first one is the use of Google Adsense Banner Ads. It uses a pair of Google ad units, the first one is quite persistent and is found on the left-hand side of the site, and the other is located on the right side, just before the listings. These are some of the major revenue sources for the organization. The second category is the sponsored listings. These are the links that are visible just before the organic results found after a Google Search. In all of them, there is a label that shows that they are sponsored links. The third category of the source of revenue for OLX is the use of featured listings. All of the featured ads found in OLX provide an Ad with the opportunity of appearing just prior to all of other advertisements found within a similar category.
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