e-commerce business plan
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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 2
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
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 4
1.0 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 7
3.3 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)
6.9
2.3
Internet Usersusers are in billions
People on the plannetInternet 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)
Buying advertising space
E-Commerce Business Plan 9
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 e-
commerce.
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 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:
E-Commerce Business Plan 10
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
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
E-Commerce Business Plan 11
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
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
E-Commerce Business Plan 12
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
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.
E-Commerce Business Plan 13
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.
References
Amberlea Moore, My Life…My Studies…My Rants…My Family…, retrieved on
November 21, 2012 from amberleamoore.com
E-Commerce Business Plan 14
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
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