E- Commerce is the trading of goods and services through electronic
platforms (Manzoor, 2010). For one to
effectively start an online business, he or she needs to carry out a swot
analysis of the industry that he wants to feature in and their speciality
within the electronic commerce world. In the case of
engaging a local clothing store into e-commerce, the following swot analysis
will be necessary for determining the advantages and disadvantages that come
along with the business.
Advantages
Online retailing
in the clothing industry will enable the business to compete favourably with
its competitors both locally and globally. The introduction of e-commerce to
the business will enable the store to expand its customer base to a universal
level within fewer expenses and time (Plant, 2013). Secondly,
e-commerce will lead to niche selling and specialization. The diverse customer
base that is created online increases the number of sales realised by the
store. The diverse customer base will enable the clothing store to specialize
in a cloth line could not be supported along the Jersey Shore boardwalk.
Thirdly, through
e-commerce, the store will increase the communication with its consumer.
Customers will be keep contact with the store during placing the order,
shipment of the goods and give room for giving a review on the products in
future through the use of online platforms. The cost that the store could incur
in opening a new store overseas is less compared to the cost of starting up a
retail e-commerce operation. Lastly, e-commerce will make the clothing store
operate a global market on a 24/7 basis. The store can also exchange links with
other business to increase its traffic. This will open the line of
communication with other stores thus aiding in the cooperation between the
stores. All these advantages will add up to the growth of the store.
Disadvantages
There are some
of the disadvantages that will come along the store adopting e-commerce in its
business model. Firstly, due to increased customer base, the store will be
exposed to high customer expectations. All businesses on the internet are perceived
to be big companies by the customers. The customers do not have a standard
measure of gauging the business level of operation. This leads to customers
demanding more than the business can manage to provide. Secondly, the store
will be exposed to a stiffer competition as compared to the traditional model.
This is as a result of the easy entry into the market. As we had discussed
earlier on, the cost of adopting e- commerce in the business model is
relatively cheaper than opening outlets. This has led to many organisations
venturing into e-commerce thus raising the level of competition hence affecting
the price setting and profit margins.
Many
manufacturers of products sell their products online. They are likely to offer
a variety of their goods at lower prices than those retailers that they supply
the goods with. The store will find it
difficult to compete with its supply due to the large economies of scale that
the supply is exposed to. Innovations also bear threats to any e-commerce
business. Organisations may invent more efficient and effective ways of
carrying out their business online. This will pose an advantage over their
competitors in the market.
Fraud is another
disadvantage that results from online retailing. Some potential customers avoid
buying goods online due to fear of fraud and misuse of their financial
information. This reduces the size of the market thus reducing the number of
sales.
Due to diversity
experienced in e-commerce, there are some factors that are likely to affect the
operation of the store and needs attention from the management. Government,
culture, language and trust of its customers are the major issues that the
business should consider. The government is a major factor to consider in the
planning of any business model. The store needs to consider the requirements
that are imposed on it by the government. For years now, many retailers have
resulted into online retailing as the escape route to paying tax to the
government. The store will have a responsibility of following the government
set policies that guide online trading (Plant, 2013).
Secondly, due to
the diversity of the customers online, the store needs to ensure that all the
customer’s diverse tastes and preferences are taken good care of. Culture is
one of the determinant factors that dictates customer taste and preference. A
good example is in the Arabic countries where the female are supposed to cover
their when in public. For the store to acquire market in this countries has to
avail attires that match this requirement. Trust is also another factor that
goes hand in hand with customer satisfaction and reliability of the store. For
the store to grow and meet its objectives, it needs to win the trust of
customers in the market. Provision of high-quality products and quick response
to customer complaints is a major milestone to achieving trust in the market.
Lastly, the
store should ensure that the language it uses to carry its online business
services all the diverse population. English happens to be widely used however
it should also be noted that there are potential markets online where English
is not effective. A good example is in Japanese and Chinese countries where the
English language is considered to be a foreign language. The store will
advertise its products and services to its potential market using the most
effective language (Daniel, 2013).
As the business
strives to operate its online retailing on the government set regulations there
are factors come in such geographical boundaries and the speed and efficiency
of business communication. Government regulations vary from one federal
government to the other.it is the responsibility of the management to set
strategies that ensure their operations are in line with the various countries.
Lastly, The
effectiveness and speed of communication during conducting online businesses
depend on the connectivity to the internet thus the business should invest in
ensuring that there is connectivity with its customers. The business should
also ensure that there is no contradicting information online that may result
to crimes such as fraud and misuse of their financial information which happen
to scare many customers. The business should ensure security for its customers
by clearly stipulating to its customers the terms and conditions involved in
carrying out its business (Daniel, 2013).
References
Daniel, I. (2013). E-commerce:
get it right! New York: NeuroDigital.
Manzoor,
A. (2010). E-commerce: an introduction. Saarbrücken: LAP Lambert
Acad. Pub.
Plant, R.
T. (2013). ECommerce: formulation of strategy. Upper Saddle River:
Financial Times.
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