PROJECT REPORT

ON

HOMESHOP 18

Submitted in partial fulfilment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

To Guru Gobind Singh Indraprastha University, Delhi

BATCH: 2014-2016

Under the Guidance ofSubmitted by

Dr.Susheel Chabra Mohit Kumar Aditi Akshit sharma Palak gupta Sugandh Agarwal

PERIYAR MANAGEMENT AND COMPUTER COLLEGEPeriyar Centre, FC33, Plot No. 1&2, Institutional Area, Jasola, New Delhi 110025

STUDENTS UNDERTAKING

We hereby certify that this is our original work and it has never been submitted elsewhere.

Project Guide: Candidates signatureDr.Susheel chabra

Place: New DelhiDate:

TABLE OF CONTENTS

CHAPTERPARTICULARSPAGE NO.

STUDENT UNDERTAKING

ACKNOWLEDGEMENT

1.INTRODUCTION

2.STRUCTURE OF HOMESHOP 18

3E-COMMERCE MODELS BUSINESS MODELS REVENUE MODELS66

4.ELECTRONIC PAYMENT SYSTEM INFRASTRUCTURE AND MECHANISM

67

5.PORTER'S FIVE COMPETITIVE FORCES MODEL

68-70

Acknowledgement

We would like to take an opportunity to thank all the people who helped us in collecting necessary information and making the project. We are grateful to all of them for their time, energy and wisdom .Getting a project ready requires the work and effort of many people. We would like to thank all those who have contributed in completing this project. Specially, We would like to send our sincere thanks to Dr.Susheel Chabra for his helpful hand in the completion of our project.

About HomeShop18:

HomeShop18 (HS18) is a new venture from the Network18. HS18 is a nationally televised home shopping service, selling credible brands through interactive electronic media, primarily through cable TV and internet. It has a team of over 3500 people spread across 30 bureau locations (3 of which are overseas). It has established 220,000 sq. ft. of fully integrated broadcast & other infrastructure, including state-of-the-art hubs in Mumbai and Delhi. HomeShop18 is the Groups online & on-air retail marketing and distribution venture which has launched Indias first 24 hour Home Shopping TV channel on April 9 08. HomeShop18 has partnered with the best brand owners, such as Apple, Motorola, Philips, Kaya, Godrej, Reebok and many more A 24-hour call centre also allows customers to call in and book orders as per their convenience. It will deliver products to over 3000 cities free of cost. Network18 is one of India's leading full play media conglomerate with interests in television, print, internet, filmed entertainment, mobile content and allied businesses. Network18 operates Indias leading business news television channels, CNBC-TV18 and CNBC Awaaz. Network18 operates in the general news and entertainment space with leading general news channels CNN-IBN and IBN7 and has launched IBN Lokmat, a Marathi news channel in partnership with the Lokmat group. It also runs one of Indias largest Internet players - Web18, as well as one of Indias leading real time financial information and news terminals - Newswire18

Overview of homeshop 18 site :

What are the top selling products at Homeshop18?These are the broad categories that are top selling: Consumer Electronics: Camera [Homeshop18 claims that 5% of camera sold in India are thru HS18 channel], Mobile Phone and Microwave Ovens. Home Appliances Jewelry, and Home & Kitchen productsJewelry: HOME APPLIANCES:

WHY BUY FROM US ?Convenience provided by HomeShop18:

Anytime shopping: especially convenient to working couples and the working women who are short on time, and the ever growing number of BPO employees. Armchair shopping: delivered at doorstep across 3,000 cities with an average timeframe of 7 days from order to doorstep delivery. Easy payment options. Free home delivery. 15 Days Money Back Guarantee.

PRODUCT LINE : Electronics & Computing Cameras & Mobiles Kids & Toys Jewellery Watches Fashion & Accessories Health & beauty Home & Kitchen House Hold Appliances Books Movies & Music Flowers key statistics regarding Homeshop18s userbase 1.3mn customers 18% are repeatcustomers. New transaction every 13 seconds. Run-rate of Rs. 1 crore a day.

STRUCTURE OF HOMESHOP 18:The structure of home shop 18 starts from vendors dealing with channel promotion and finally reaches to the customer.it uses it backbone to support the various activities to be carried down

MIS AT HOMESHOP18 There is one Centralized database warehouse. However the MIS is implemented on a departmental basis. There are some departments which might need MIS based on their functionality and their role. Sourcing Team has to help themselves to analyse the historical data and gather the micro information. Here departmental MIS come in handy as each department has different information decision making tool. Using the MIS Reports, rare information is generated. Information is accessed by different employees at varying frequency. Access Control enabled to protect the privacy of the data. Several important information like orders to be placed, time-range, and place etc can be generated through the MIS. There is access level control given to the employees depending on need basis (hourly, monthly) and nature of work so as to not overload the system. Reports -on- demand can be also generated and passed on as requested. Special one-off Reports need to be created. The requirements and criticality are understood and the reports are pulled-off and send to the required team. Managers are by-default given admin access. There is a provision for Custom Build and Automated Reports and Dashboards. There are two teams who look after the maintenance of the MIS Functional IT Team and Central IT Team. Functional IT Team maintains the IS pertaining to their functionality and the Central Team looks after stuffs like access-control, connectivity, server etc. The SLA for providing the reports is 1.7 Days. There is a stand-alone custom build MIS tool that runs on Intranet. The information is securely transmitted through https protocol. MIS provides lot of useful information like Vendor Management, procurement of the inventory, grading system and the functioning of the different departments.

MIS MODULES : MIS for product which are ready to air. MIS for airing slots. MIS for Customers to have the customer base. MIS for Contact Center how many people contacted and information related to calls. MIS related to deliverydifferent modes used were cash, advance payment and CC payment. MIS for Sales and Margin. MIS for Dashboard for leadership and forecasting.ARCHITECTURAL DIAGRAM OF HOMESHOP18 CONSISTING OF LAN/WAN/INTRANET/EXTRANET, EDI, VALUE CHAIN, WEB BASED TOOLS INCLUDE IN WEB SERVER & SOFTWARE

Architectural Diagram

VPN Diagram

AWS Architecture CenterThe AWS Architecture Center is designed to provide you with the necessary guidance and best practices to build highly scalable and reliable applications in the AWS Cloud. These resources will help you understand the AWS platform, its services and features, and will provide architectural guidance for design and implementation of systems that run on the AWS infrastructure.

AWS Reference ArchitecturesThe flexibility of AWS allows you to design your application architectures the way you like. AWS Reference Architecture Datasheets provide you with the architectural guidance you need in order to build an application that takes full advantage of the AWS cloud. Each datasheet includes a visual representation of the architecture and basic description of how each service is used.

E-Commerce Models1.BUSINESS MODELS:Business-to-Business (B2B) ModelThe B2B model involves electronic transactions for ordering, purchasing, as well as other administrative tasks between houses. It includes trading goods, such as business subscriptions, professional services, manufacturing, and wholesale dealings. Sometimes in the B2B model, business may exist between virtual companies, neither of which may have any physical existence. In such cases, business is conducted only through the Internet.

The advantages of the B2B model are: It can efficiently maintain the movement of the supply chain and the manufacturing and procuring processes. It can automate corporate processes to deliver the right products and services quickly and cost-effectively. The B2B model is predicted to become the largest value sector of the industry within a few years. This is said to be the fastest growing sector of e-commerce.

Business-to-Consumer (B2C) Model The B2C model involves transactions between business organizations and consumers. It applies to any business organization that sells its products or services to consumers over the Internet. These sites display product information in an online catalog and store it in a database. The B2C model also includes services online banking, travel services, and health information. Storefront Model:Storefront model enables merchants to sell products on the WebAn e-commerce storefront should include: Convenience and Simplified Process Online catalog of products Order processing Secure payment

Shopping Cart Technology Shopping Cart An order-processing technology allowing customers to accumulate lists of items they wish to buy as they continue to shop Shopping cart is supported by Product catalog Merchant server Database technology Combine a number of purchasing methods to give customers a wide array of options

2. Revenue models :Revenue model is a description of how the organization will earn revenue, produce profits, and produce a superior return on invested capital. The major revenue models are:Sales revenue model: A company gets the revenue by selling goods, information or services.Subscription revenue model: A company charges a subscription fee for the users that access to the content and services offered.

Transaction fee revenue model: A company receives a commission for enabling or executing a transaction. It is based on the volume of transactions made.Advertising revenue model: A company provides a forum for advertisements and receives fees from the companies that advertise their products.

ADVERTISEMENT REVENUE MODELELECTRONIC PAYMENT SYSTEM INFRASTRUCTURE AND MECHANISMElectronic Payment Electronic Payment is a financial exchange that takes place online between buyers and sellers. The content of this exchange is usually some form of digital financial instrument (such as encrypted credit card numbers, electronic cheques or digital cash) that is backed by a bank or an intermediary, or by a legal tender. The various factors that have leaded the financial institutions to make use of electronic payments are: Decreasing technology cost- The technology used in the networks is decreasing day by day, which is evident from the fact that computers are now dirt-cheap and Internet is becoming free almost everywhere in the world. Reduced operational and processing cost- Due to reduced technology cost the processing cost of various commerce activities becomes very less. A very simple reason to prove this is the fact that in electronic transactions we save both paper and time. Increasing online commerce- The above two factors have lead many institutions to go online and many others are following them.1. We began E-Commerce with EDI; this was primarily for large business houses not for the common man. Many new technologies, innovations have lead to use of E-Commerce for the common man also. We will now briefly enumerate these innovations based on whom they affected: Affecting the consumers: Credit cards, Debit Cards, ATMs (Automated Teller Machines), stored value cards, E-Banking. Enabling online commerce: Digital Cash, E-Cash, Smart cards (or Electronic Purse) and encrypted Credit cards. Affecting Companies: The payment mechanisms that a bank provides to a company have changed drastically. The Company can now directly deposit money into its employees bank account. These transfers are done through Automated Transfer Houses.

2. There are also many problems with the traditional payment systems that are leading to its fade out. Some of them are enumerated below: Lack of Convenience: Traditional payment systems require the consumer to either send paper cheques by snail-mail or require him/her to physically come over and sign papers before performing a transaction. This may lead to annoying circumstances sometimes. Lack of Security: This is because the consumer has to send all confidential data on a paper, which is not encrypted, that too by post where it may be read by anyone. Lack of Coverage: When we talk in terms of current businesses, they span many countries or states. These business houses need faster transactions everywhere. This is not possible without the bank having branch near all of the companies offices. This statement is self-explanatory. Lack of Eligibility: Not all potential buyers may have a bank account. Lack of support for micro-transactions: Many transactions done on the Internet are of very low cost though they involve data flow between two entities in two countries. The same if done on paper may not be feasible at all.

E-Payment System

Types of E-Payment System Electronic Tokens- An electronic token is a digital analog of various forms of payment backed by a bank or financial institution. There are two types of tokens: Real Time: (or Pre-paid tokens)- These are exchanged between buyer and seller, their users pre-pay for tokens that serve as currency. Transactions are settled with the exchange of these tokens. Examples of these are DigiCash, Debit Cards, Electronic purse etc. Post Paid Tokens are used with fund transfer instructions between the buyer and seller. Examples Electronic cheques, Credit card data etc. Electronic or Digital Cash- This combines computerized convenience with security and privacy that improve upon paper cash. Cash is still the dominant form of payment as: The consumer still mistrusts the banks. The non-cash transactions are inefficiently cleared. In addition, due to negative real interests rates on bank deposits. Now we will enumerate some qualities of cash: Cash is a legal tender i.e. payee is obligatory to take it. It is negotiable i.e. can be given or traded to someone else. It is a bearer instrument i.e. possession is proof of ownership. It can be held & used by anyone, even those without a bank certificate. It places no risk on part of acceptor. Electronic Cheques- The electronic cheques are modeled on paper checks, except that they are initiated electronically. They use digital signatures for signing and endorsing and require the use of digital certificates to authenticate the payer, the payers bank and bank account. They are delivered either by direct transmission using telephone lines or by public networks such as the Internet. Card- Card-based such as Credit and charge cards- It means buy now, pay later. Debit cards- It means buy now, pay now Cash cards, stored-valued, e-cash- It means buy now, prepaid or pay before E-Wallet- The E-wallet is another payment scheme that operates like a carrier of e-cash and other information. The aim is to give shoppers a single, simple, and secure way of carrying currency electronically. Trust is the basis of the e-wallet as a form of electronic payment.

Secured Payment Gateway DiagramPAYMENT OPTIONS IN HOMESHOP18:

PORTER'S FIVE COMPETITIVE FORCES MODELAccording to Porter (1980, 1985) and Porter and Millar (1985), a firm develops its business strategies in order to obtain competitive advantage (i.e., increase profits) over its competitors. It does this by responding to five primary forces: (1) The threat of new entrants, (2) Rivalry among existing firms within an industry, (3) The threat of substitute products/services, (4) The bargaining power of suppliers, and (5) The bargaining power of buyers.A company assesses these five competitive forces in a given industry, then tries to develop the market at those points where the forces are weak (Porter 1979). For example, if the company is a low-cost producer, it may choose powerful buyers and sell them only products not vulnerable from substitutes. The company positions itself so as to be least vulnerable to competitive forces while exploiting its unique advantage (cost leadership). A company can also achieve competitive advantage by altering the competitive forces. For example, firms establish barriers to deter new entrants from coming into an industry by cultivating unique or capital-intensive resources that new firms cannot easily duplicate. Firms also increase bargaining power over their customers and suppliers by increasing their customers' switching costs and decreasing their own costs for switching suppliers. The five competitive forces model provides a solid base for developing business strategies that generate strategic opportunities. Since the Internet dramatically affects these competitive forces, Internet companies should take these forces into account when formulating their strategies.In his recent study, Porter (2001) reemphasized the importance of analyzing the five competitive forces in developing strategies for competitive advantage: Although some have argued that todays rapid pace of technological change makes industry analysis less valuable, the opposite is true. Analyzing the forces illuminates an industrys fundamental attractiveness, exposes the underlying drivers of average industry profitability, and provides insight into how profitability will evolve in the future. The five competitive forces still determine profitability even if suppliers, channels, substitutes, or competitors change.

Porter's Five Competitive Forces ModelIN CONTEXT TO HOMESHOP18:

An expansion into related product lines can also be a good strategy. According to Porter (1987), the expansion into related product lines can exploit transfer of skills or sharing of activities such as promotion and distribution, which will lead to competitive advantage. Sharing can lower costs by achieving economies of scale and effectively utilizing company resources such as market information, managerial or technical expertise, and knowledge. 3 Like traditional companies, Internet companies can also expand their product line into areas related to their existing product lines. For example homeshop18.com recently started selling personal computers in addition to its existing line of electronic products such as disk drives and memory (Hansell 2001).homeshop18.com holds no computer inventory and has computers shipped directly from a computer distributor to its customers. This allows homeshop18.com to save inventory-holding costs. However, such expansion cannot bring increased profits to homeshop18.com without effective utilization of its existing customer base and information, and managerial or technical knowledge of e-business.HOMESHOP18s VALUE CHAINHOMESHOP 18 developed a value chain of itself to internal it can operationally best add value and maintain a competitive advantage. They used the value chain model from Michael Porter's book, "Competitive Advantage: Creating and Sustaining Superior Performance."

Homeshop18 Value Chain

Primary Activities and Support ActivitiesPrimary activities are those needed to produce a product or services for the end customers. These activities typically include: Inbound Logistics: receiving goods from suppliers, and storing and moving those good Operations: Manufacturing or assembling the product Outbound Logistics: Sending the goods to wholesalers, retailers or directly to the end customer Marketing and Sales: Marketing involves understanding customer needs, communicating those needs, and promoting the end products. Service: Involves after-sales support (e.g., handling, complaints, installation, training)Support activities help to facilitate or assist the primary activities of producing product. Examples include: Procurement: purchasing raw material and other items used in operations Human Resource Management: recruiting, hiring, firing, training, developing, compensating Technological Development: research and development, process automation, software, hardware, equipment, etc., to support operations Infrastructure: May include accounting, legal, finance, planning, public affairs, government relations, quality assurance and general management.

Advantages from a Value Chain Perspective Some of competitive advantages from a value chain perspective include: Strong technological infrastructure with a single platform High investments in technology development (e.g., Kindle) to best leverage digital products Great product forecasting system Print on demand Constantly soliciting suggestions on new products Easy and fast payment system 24 hour operations

Contributed to the Success of homeshop18The management, organization and technology factors that have contributed to the success of Amazon:1. Convenience and ease of use Large selection: publisher relations, wholesale relations, unlimited virtual shelf space2. High Performance Service Website is fast, reliable, and easy to use Shipping is prompt Customer is kept informed Innovative technology3. Brand share of mind/Networking Short, clever name/URL/tag line Referral program Co-branding, cross promotion and high advertising4. Community Posting customer reviews with author reviews Customer gifts: bookmarks, notepads, cups, etc Promotion where customers collaborate with famous authors5. Personalization/Large customer database Extensive customer profiles Recommendations Other readers who bought this title also bought Other readers who bought this author also bought6. Trust Guarantees Return policy Great customer service: superior service reps, easy search, no hassle return, email confirmation7. Extended Service Extensive subject index Search Ability to order before publication Out of print search8. Cost Structure Low price Low overhead: less employee, less real estate, low inventory9. Logistics Fast, reliable, inexpensive shipping Originally no inventory, use Ingram

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