Supply Chain Meena Bazar

7/21/2019 Supply Chain Meena Bazar

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Impacts of E-Business and Factors Influencingthe Implementation of E-Business in Grocery

Industry:

Study on Meena Bazar


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Impacts of E-Business and Factors Influencing the Implementation

of E-Business in Grocery Industry: Study on Meena Bazar___________________________________________________________________________

Prepared For:

Mimnun SultanaSenior Lecturer

School of Business and Economics

Prepared By:

1. Farah Hasan Sarah- 111 122 1352. ShiffatAra Bonny- 111 !2 1223. "inath"ahan #oor- 111 !2 5$%. &uhina"ahan- 111 '1 21

3 A(ril 213


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30April2013

Ms. Mimnun SultanaSenior Lecturer

School of Business)nited *nternational )ni+ersity

Subject: Solicitation for Acceptance of the report.

,ear Madam

e are (leased to su/mit the reporton 0Impacts of E-business and Factors Influencing the

Implementation of E-business in Grocery Industry: Study on Meena Bazar. We have tried

our/est to mae this reportholistic and informati+e enouh. All the 4ors (resented here aredone 4ith utmost sincerely and honesty.

e a((reciate your coo(eration and uidelines. orin 4ith such an interestin (roram

hasi+en us the o((ortunity to achie+e e(erience on it. e shall /e hihly encouraed if you

areind enouh to recei+e this re(ort. e are al4ays a+aila/le for any further 6uarries

reardinthis re(ort.

Sincerely

1. Farah Hasan Sarah- 111 122 1352. ShiffatAra Bonny- 111 !2 1223. "inath"ahan #oor- 111 !2 5$%. &uhina"ahan- 111 '1 215. #asrin Ahter- 111 !3 1

Acknowledgement

First of all 4e 4ould lie to than our honora/le faculty Ms. Mimnun Sultana, senior lecturer

School of Business and Economics )nited *nternational )ni+ersity for i+in us such an

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o((ortunity to (re(are the re(ort onImpacts of E-business and Factors Influencing for

Implementation of E-business in Grocery Shopsfor the courseSupply Chain Management.

7ur s(ecial thans to the manaement of Meena Ba8ar for their coo(eration and (ro+idin us

4ith re6uired information 4ithout any hindrance. e are also rateful to each other of our rou(mem/ers for e+eryone9s time and sincere coo(eration in doin the assinment in time.

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Table of ontent

1 INTRODUCTION:.........................................................................................12 Bangladeh !hain upertore" e!tor:.....................................................1

# $WOT %nal&i o' (eena Ba)ar:.................................................................*

+ ,-!oer!e i /eing ue in (eena /a))ar:...............................................0

+.1 The IT-/aed ervi!e uing /& (eena Ba)ar:......................................0

+.2 Role o' e-!oer!e in (eena Ba)ar:...................................................0

+.# ,/ar on e-!oer!e:......................................................................

+.+ Initiating peron o' e-!oer!e in eena /a)ar:................................

* ,C give a !opetitive advantage to eena /a)ar:..................................3

*.1 Bene4t o' e-Coer!e to Organi)ation:............................................3

*.2 ,-!oer!e help (eena Ba)ar to !opete 5ith other !opetitor:.3

*.# The other /ene4t e-!oer!e give (eena Ba)ar:...........................6

0 The 5a& ,-!oer!e hould /e ued in (eena Ba)ar............................17

0.1 The opportunitie to iprove e-!oer!e pra!ti!e in (eena Ba)ar: 17

0.2 The additional ,C a!tivitie !ould /e developed in (eena Ba)ar:.. .. .11

0.2.1 %dvertie:.....................................................................................11

0.2.2 $o!ial (edia:................................................................................11

0.2.# Other:.........................................................................................11

The Organi)ational 8a!tor9 Individual 8a!tor9 and ,ternal

,nvironental 8a!tor In;uen!e the Ipleentation o' e-!oer!e:..........12

.1 OR 8%CTOR$:..............................................................12

7.1.1 8ir i)e:......................................................................................12

.1.2 Chara!teriti! o' the produ!t:.....................................................1#.1.# Degree o' diveri4!ation:.............................................................1#

.1.+ (areting a/ilitie:.......................................................................1#

.1.* Te!hni!al ill:.............................................................................1#

7.1.6 Range o' a!tivit&:..........................................................................1+

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.1. Degree o' third part& dependen!e:..............................................1+

.1.3 Copetitive trateg&:...................................................................1+

.2 P,R$ON%> 8%CTOR$:..........................................................................1+

.2.1 %ttitude and per!eption:...............................................................1+

.2.2 Trut:............................................................................................1*

.2.# Reitan!e to !hange:..................................................................1*

.# ,?T,RN%> 8%CTOR$:..........................................................................1*

7.3.1 In'ratru!ture and /uine related 'a!tor:.................................1*

7.3.2 Copetition related 'a!tor:.........................................................10

3 ,-!oer!e Change the Organi)ational Buine Pro!e o' (eena

Ba)ar:.............................................................................................................10

3.1 The Reour!e That Change Organi)ational Buine Pro!e:........10

3.1.1 @uan Reour!e:........................................................................10

3.1.2 8un!tional Reour!e:...................................................................10

3.1.# Te!hnologi!al Capa/ilitie:...........................................................1

3.1.+ Organi)ational Capa/ilitie:..........................................................1

3.2 The Change are (anaged B&:...........................................................1

3.# The DiA!ultie Dealing 5ith ,-!oer!e:.........................................16

3.#.1 $e!urit&:.......................................................................................163.#.2 $&te and Data Integrit&:...........................................................16

3.#.# $&te $!ala/ilit&:.......................................................................16

3.#.+ ,!oer!e I Not 8ree:..............................................................16

3.#.* Conuer $ear!h I Not ,A!ient or Cotee!tive:.....................27

3.#.0 Cutoer Relation Pro/le:......................................................27

3.#. Produ!t People 5ont /u& online:................................................27

3.#.3 Corporate Eulnera/ilit&:................................................................27

3.#.6 @igh Ri o' Internet $tartup:.....................................................21

6 The reaon 'or !utoer 5ouldFhould not lie to ue ,C:...................21

6.1 The reaon !utoer hould lie ,C:..............................................21

6.2 The reaon !utoer hould not lie e-!oer!e:..........................21

17 Re'eren!e:..............................................................................................22

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!"ecuti#e $ummar%

Electronic commerce is no4 a means for /usiness ro4th and e(ansion in relation to /oth small

and lare firms irres(ecti+e of their eora(hical locations. Banladesh is still far fromde+elo(ment of such e-commerce s(ecially B2: ;Business to :onsumer< e-commerce. Meena

Ba8ar is a 4ell-de+elo(ed su(er sho((in in ,haa :ity. *t has also some outlets outside ,haa

:ity. *t is a retailer of the daily oods includin all the fast mo+in consumer oods lie

household roceries stationeries and cosmetics etc. *t offers clean and friendly en+ironment

4ith a 4ide rane of 6uality (roducts at afforda/le (rices and it has /ecome the (rimary channel

for distri/ution of foods and other household effects on the consumers.

&he re(ort mainly focuses on the emerence of e-commerce and the factors that affect the

im(lementation of e-commerce in retail sector. &he study has /een conducted on Meena Ba8ar

4hich is one of the (ioneers in su(ermaret chain in Banladesh. &he re(ort also co+ers the

+arious issues related to e-commerce and its im(lementation in retail chain. Accordin to the

findins Meena Ba8a has introduced e-commerce althouh not in its full etent. &he re(ort

concludes 4ith a discussion on the chanes in /usiness (rocess of Meena Ba8ar resultin from

the use of e-commerce the challenes and the difficulties of im(lementin e-commerce from

/oth sellers9 and customers9 (ers(ecti+e.

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Impacts of E-Business and Factors Influencing the Implementation of

E-Business in Grocery Industry: Study on Meena Bazar

______________________________________________________________________________________________________

1 &'T()*+T&)':

Meena Ba8ar is one of the chain su(er marets of the Banladesh 4hich ser+e in Banladesh

from 2. Meena Ba8ar the first truly national su(ermaret chain 4as founded 4ith the

(romise of year-round. ith a stron 15-2 (er cent annual sales ro4th a/out 3 com(anies

4ith more than 2 outlets ha+e already made foray into the industry since =ahimafroo8 one of

the larest /usiness rou(s in Banladesh introduced Aora a chain su(erstore in the ca(ital a

decade ao.

Strenths of the Meena Ba8ar is Si8e allo4s for com(etiti+e /uyin terms Stron senior

manaement Flei/le formats. 7((ortunities of the Meena Ba8ar are formin or merin a

strateic alliance 4ith su((liers >ro4th of non-food >ro4th of con+enience and com(act

hy(ermaret formats effecti+e use of :lu/ card data/ase to increase /aset si8e and ,e+elo(

additional ser+ices.

Meena Ba8aar has successfully im(lemented the orani8ational culture to the 4orer. &hey ha+ea dress code in the outlets. From this the /uyer can easily tress out 4ho 4ill ser+e them and can

hel( them. Another culture is that they are +ery a4are a/out the time. &hey ha+e a ood

orani8ational /ondin.

2 anglade$- c-ain $uper$tore.$ $ector$:

Su(erstores are set to /oom in the country as the current maret (layers. &hey are (lannin to

o(en se+eral hundred more outlets in the net fe4 years to co(e 4ith the risin demand from theconsumers. ith a stron 15-2 (er cent annual sales ro4th a/out 3 com(anies 4ith more

than 2 outlets ha+e already made foray into the industry since =ahimafroo8 one of the larest

/usiness rou(s in Banladesh introduced Aora a chain su(erstore in the ca(ital a decade ao.

&he annual turno+er of the su(erstores no4 stands at around &15. /illion ;15 crore


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accordin to Banladesh Su(ermaret 74ners Association ;BS7A


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Electronic ,ata *nterchane ;E,*emcon rou( director a8i*nam Ahmed and communication manaer Ahmed Shoye/*6/al

addressed the 4e/ site and Iclu/ card9 launch.

I:ustomers ha+e to enter the country and the credit card /illin address in addition to the normal

credit card details at the (oint of (ayment. &he tele(hone num/er of the recei+in (arty is a

com(ulsory field in the order form. e 4ill call and confirm the address and the route /efore

deli+erin the order9

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< !ommerce =ro#iding ompetiti#e Ad#antage to Meena a9ar:

:om(etiti+e ad+antae has to do 4ith a com(anyGs a/ility to outdo com(etitors either /y

im(ro+in u(on 4hat com(etitors are currently doin or /y doin somethin com(letely

different in a 4ay that (ro+es successful. Bein a/le to im(lement an e-commerce (lan thatim(ro+es sales or cuts costs miht i+e one retailer a com(etiti+e ad+antae o+er another. At the

same time /ein the first to come u( 4ith a ne4 e-commerce /usiness model or a uni6ue t4ist

on an eistin model miht also allo4 an u(-start to ain an early com(etiti+e ad+antae.


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:onsumers can recei+e rele+ant and detail information in seconds rather than in days or

4ees

Maes it (ossi/le to (artici(ate in +irtual auction

T-e a% !commerce S-ould be +$ed in Meena a9ar

,ue to the increased (o(ularity and a+aila/ility of *nternet access many traditional small /usiness are considerin e-

:ommerce as a +alid and (rofita/le sales channel. *t9s im(ortant for Meena Ba8ar to 4eiht carefully the differences

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/et4een e-:ommerce and traditional commerce in order to decide if it 4ould /e a ood fit for your /usiness or ust a

costly mistae.

>1 T-e opportunitie$ to impro#e ecommerce practice in Meena a9ar:

Traditional ommerce #$ eommerce:

&tem$ eommerce Traditional ommerce

Sales :hannel Enter(ri8e *nternet

:onsumer

Manufacturer

holesaler =etailer

:onsumerSales Hour K=eion Entire 4orld

2%

=estricted area

=estricted sales hourSales (laceKmethod Maret s(ace

;#et4or21 %dvertieent:

&he /est 4ay of reducin the cost and time s(ent on maretin is selectin 4here to s(end them.

7(timi8in the cam(ains to taret the net4ors and 4e/sites Meena Ba8ar9s taret audience is

most liely to +isit can reduce /oth the money and the time re6uired to manae them. So that

customers can et satisfied /y usin these 4e/ sites.

>22 $o!ial(edia:

Social Media can /e etremely +alua/le to enae 4ith the customers current and (otential. *t9s alsorelati+ely chea( if Meena Ba8ar can create an account in &4itter or e+en a fan (ae in Face/oo

4ith ust a /it of technical no4lede. &he only thin those channels 4ill re6uire of (ro(er time to

interact 4ith the audience a eneral understandin of ho4 (eo(le communicate there and may/e a

fe4 &aas a month for a su/scri(tion to automation tool that 4ill mae Meena Ba8ar9s /usiness

easier.

>23 )t-er$:

a(alla and >ray ;2$< mention the conce(t of 0!u$ine$$ Adaptation /adder (ro(osed /y

#achira ;22< that di+ides the (rocess of e+olution of e-/usiness to its current stae into the

follo4in si staes

Stage 1D introduction of e-mail as one of the most efficient /usiness communication

methods

Stage 2D 4ith the introduction of 4e/sites /usinesses ained access to 4orld marets

Stage 3 D e-commerce 4as introduced and the con+enient (rocedures of orderin and

(ayin online chaned lo/al /usiness en+ironment irre+ersi/ly Stage 5D 4ith the de+elo(ment of e-/usiness the su((ly-chain o(erations of the /usiness

4ere interated

Stage D the conce(t of net4ored oranisations introduced and the (rinci(les of o(en

information 4ith customers su((liers and /usiness (artners are 4idely em/raced.

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Stage ; D 4ith the ad+ent of diital ecosystem such /usiness conce(ts as no4lede

sharin natural selection and the e+olution of ser+ices 4ere (romoted.

? T-e )rgani9ational @actor$, &ndi#idual @actor$, and !"ternal

!n#ironmental @actor$ &nfluence t-e &mplementation of e

commerce:

&here are a num/er of factors that can influence the im(lementation of e-commerce in a retail

chain lie Mena Ba8aar. &hese factors can /e rou(ed into three forms orani8ational (ersonal

and eternal en+ironmental factors. &he influences of these three factors are discussed in the

follo4in su/sections.

?1 )(8A'&AT&)'A/ @AT)(S:

Se+eral orani8ational factors ha+e /een identified that may affect the ado(tion and

im(lementation of e-commerce in an orani8ation.

?11 @irm $i9e:

?ast research has found thatfirm size is an im(ortant determinant of a firm9s in+ol+ement and

decision (rocess in ac6uirin *:& ;,holaia et al. 1''3


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constraints deri+in from customers9 eora(hical distance. Since Mina Ba8aar sells tani/le

oods it is costly as 4ell as it in+ol+es other resource constraints.

?13 *egree of di#er$ification:

&he im(lementation of e-commerce should also /e ade6uate to the deree of di+ersification. &he

more di+ersified the /usiness o(eration the more resources are liely to /e in+ested in

im(lementin the e-commerce. &he Mina Ba8aar has its o4n di+ersification (lan that calls for its

(re(aration to u(date its e-commerce accordinly.

?15 Marketing abilitie$:

Marketing abilities re(resent an im(ortant influence for the o(eration of the e-commerce

o((ortunities. Since the ado(tion of e-commerce could affect all the +aria/les of the maretin

mi ;(roduct (rice (romotion and (lace


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?1< *egree of t-ird part% dependence:

&he degree of third party dependence refers to com(anies /elonin to the same +alue system

4hich choices can /e more or less constrained /y commercial (artners. Lie other retail chain

Mina Ba8aar has to de(end on third (arties for su((lyin the oods it sells. A hih le+el ofcoordination and commitment from third (arty is needed for successful im(lementation of e-

commerce.

?1> ompetiti#e $trateg%:

&he com(any competitie strategy has a stron im(act on e-commerce a((lications /oth 4hen it

aims at fulfillin a leadershi( in costs and 4hen it is /ased on the differentiation of (roducts and

ser+ices.

?2 =!(S)'A/ @AT)(S:

&he maor (ersonal factors that can affect the im(lementation of e-commerce are discussed

/elo4.

?21 Attitude and perception:

Hill Smith and Mann ;1'!< found that self-efficacy 4hich is one dimension of attitude the

/elief in one9s a/ility to (erform a (articular /eha+ior influences the ado(tion of a technoloy.

Hence to( manaement needs to ha+e a hih le+el (ositi+e attitude in ado(tin and im(lementin

any technoloy lie e-commerce.

?22 Tru$t:

A hih le+el of trust is re6uired from the (art of manaement reardin the /enefits and necessity

of e-commerce. *f the manaement does not ha+e trust on the /enefits of e-commerce it is not

(ossi/le to im(lement e-commerce reardless of the resources and ca(a/ilities the orani8ation

o4ns.

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?23 (e$i$tance to c-ange:

*t assumes that the e-commerce ado(tion could im(ly orani8ational transformations in terms of

tas chanes introduction of ne4 roles and rearranement of the orani8ation as 4hole

inno+ati+e orani8ations should face less resistance to chane 4hile im(lementin any of the e-commerce acti+ities. Here the to( manaement has to /e mentally ready for any ind of chane

that calls for im(lementin e-commerce.

?3 !BT!('A/ @AT)(S:

Eternal factors eist at three le+els industry macroeconomic and national (olicy le+el

;Lefe/+re and Lefe/+re 1''$


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10 !commerce -anging t-e )rgani9ational u$ine$$ =roce$$ of

Meena a9ar:

An orani8ation9s /usiness (rocess can /e measured throuh some features. &he features are

i+en /elo4 and assess the Meena Ba8ar.

101 T-e (e$ource$ T-at -ange )rgani9ational u$ine$$ =roce$$:

1011 4uman (e$ource$:

Human resources are an orani8ation9s most im(ortant asset.

)ltimately an orani8ation9s distincti+e com(etences lie in the sills

and a/ilities of its em(loyees. Because these sills and a/ilities i+ean orani8ation a com(etiti+e ad+antae orani8ations must

continually monitor their structures to find the most effecti+e 4ay of

moti+atin and orani8in human resources to ac6uire and use their

sills.

1012 @unctional (e$ource$:

Each orani8ational function needs to de+elo( (rocedures that allo4 manain the (articular

en+ironment it faces. As the en+ironment chanes orani8ations often transfer resources to the

functions 4here the most +alue can /e created. :rucial functions ro4 in im(ortance 4hile

those 4hose usefulness is declinin shrin.

For Meena Ba8aar the functional resources include its a+aila/ility of the (roducts in e+ery outlet.

From the assessment Meena Ba8aar is not fully successful to a+aila/le the (roducts in e+ery

outlets in at time. *t is ha((en for their distri/ution system.

1013 Tec-nological apabilitie$:

&echnoloical ca(a/ilities i+e an orani8ation an enormous ca(acity to chane itself in order to

e(loit maret o((ortunities. &he in+entory manaement system should /e +ery stron and

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automated in the chain su(er sho(. &he Meena Ba8ar has in+entory soft4are for their in+entory

manaement.

By the in+entory manaement system the manufacturin com(any can /e /enefited in many

4ays. &he ey acti+ities are ;1< (urchasin ;2< (roduction and ;3< sellin. *n other 4ords

(urchasin and (roduction functions 4ould de(end u(on the le+el of sales.

1015 )rgani9ational apabilitie$:

7rani8ational chane often in+ol+es chanin the relationshi(s /et4een (eo(le and functions to

increase their a/ility to create +alue. 7rani8ational chane often in+ol+es chanin the

relationshi(s /et4een (eo(le and functions to increase their a/ility to create +alue. :hanes in

structure and culture tae (lace at all le+els of the orani8ation and include chanin the routines

an indi+idual uses to reet customers chanin 4or rou( relationshi(s. *m(ro+in interation

/et4een di+isions and chanin cor(orate culture /y chanin the to( manaement team.

102 Managing t-e -ange$:

Su(ermaret chainindustry has cauht on to the /and4aon and has /eun to offer 7nline

Sho((in. *n the early 1''s 4e sa4 :om(anies settin u( 4e/sites 4ith +ery little

understandin of E :ommerce and :onsumer /eha+ior. E commerce as a /usiness (rocess is

totally different from the traditional sho((in in all res(ect. Lie other orani8ations usin e-commerce Mina Ba8aar considers E commerce stratey se(arately /ut as a (art of o+erall retail

stratey.

=etail stratey in+ol+es (lannin for the /usiness ro4th ee(in in +ie4 the current maret

trends o((ortunities as 4ell as threats and /uildin a strateic (lan that hel(s the

orani8ationdeal 4ith all these eternal factors and stay on course to reach its oals. Further the

retail /usiness stratey is concerned 4ith identifyin the marets to /e in /uildin the (roduct

(ortfolio and /and 4idth cou(led 4ith /rand (ositionin and the +arious elements of /rand+isi/ility and in store (romotions etc. 7+erall /usiness (rocesses are more or less standard and

(ro+en models that are ada(ted as /est (ractices.

Ho4e+er 4hen it comes to definin an E :ommerce stratey for the /usiness the dynamics of

the +arious elements contri/utin to the /usiness are totally different. &he one factor that remains

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common is the focus on :ustomer. hile in the (hysical traditional sellin method there eists

a (hysical e(erience from the :ustomer9s end and hence it is easier to /uild :ustomer

relationshi( and enae the :ustomer E :ommerce (latform has ot to de+ise methods to reach

out to the +irtual :ustomer on 7ne to 7ne /asis and /uild the relationshi(. &he E commerce

enerally (ro+ides more (roduct information and technical details to the :ustomers than

(ro+ided throuh the &raditional Sales channel. E :ommerce has ot to define the sales

transaction third (arty (ayment and financial transaction as 4ell as :ustomer ser+ice (rocesses.

As com(ared to traditional (hysical channel sales all these (rocesses are ne4 and ha+e /een

4ell defined and (ro+en.

7ne im(ortant 6uestion that 4e ha+e ot to ans4er is to fiure out IHo4 ,o e ,iffer from

:om(etition9 or ha+e an ede o+er :om(etition in the E commerce maret. 7ne of the ey

differentiators has /een the system security and the third (arty /illin des (artners used /y the

orani8ation. here+er 4e ha+e (artnered 4ith 4ell-no4n and re(uted /aners and /illin des

ser+ice com(anies (ro+idin safe and secure transactions the customer confidence in dealin

4ith such :om(any is enhanced. Secondly 7nline :ustomer ser+ice cou(led 4ith (u/lici8ed

(olicy of customer returns and 4arranty manaement are successful in /uildin loyal customer

/ase.

?ricin of (roducts is another area that is re6uired to /e addressed throuh the E :ommerce

stratey. hile the sellin and o(erational costs are hiher in traditional sales model the E

commerce or Jirtual Sales costs are nelii/le. &here eists a (otential to (rice (roducts

attracti+ely and enae the customer to /uy in /ul.

&he fact that traditional sho((in e(erience as 4ell as /ac end o(erations is totally different

from the +irtual and instantaneous 7nline sho((in 4e ha+e ot to come u( 4ith se(arate sales

stratey for /oth traditional sales channel as 4ell as electronic commerce tradin channel.

103 T-e *ifficultie$ *ealing wit- !commerce:

&he difficulties dealin 4ith e-commerce 4ith the ne4 4orin style are i+en /elo4

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1031 Securit%:

Security continues to /e a (ro/lem for online /usinesses. :ustomers ha+e to feel confident a/out

the interity of the (ayment (rocess /efore they commit to the (urchase.

1032 S%$tem and *ata &ntegrit%:

,ata (rotection and the interity of the system that handles the data are serious concerns.

:om(uter +iruses are ram(ant 4ith ne4 +iruses disco+ered e+ery day. Jiruses cause

unnecessary delays file /acu(s storae (ro/lems and other similar difficulties. &he daner of

hacers accessin files and corru(tin accounts adds more stress to an already com(le

o(eration.

1033 S%$tem Scalabilit%:

A /usiness de+elo(s an interacti+e interface 4ith customers +ia a 4e/site. After a 4hile

statistical analysis determines 4hether +isitors to the site are oneDtime or recurrin customers. *f

the com(any e(ects 2 million customers and $ million sho4 u( 4e/site (erformance is /ound

to e(erience deradation slo4do4n and e+entually loss of customers. &o sto( this (ro/lem

from ha((enin a 4e/site must /e scala/le or u(rada/le on a reular /asis.

1035 !Ccommerce &$ 'ot @ree:

So far success stories in eDcommerce ha+e forced lare /usiness 4ith dee( (ocets and ood

fundin. Accordin to a re(ort small retailers that o headDtoDhead 4ith eDcommerce iants are

fihtin losin /attle. As in the /ricDandDmortar en+ironment they sim(ly cannot com(ete on

(rice or (roduct offerin. Brand loyalty is related to this issue 4hich is su((osed to /e less

im(ortant for online firms. Brands are e(ected to lo4er search costs /uild trust and

communicate 6uality. A search enine can come u( 4ith the /est music deals for eam(le yetconsumers continue to floc to trusted entities such as HMJ.

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103 on$umer Searc- &$ 'ot !fficient or o$tCeffecti#e:

7n the surface the electronic maret(lace seems to /e a (erfect maret 4here 4orld4ide sellers

and /uyers share and trade 4ithout intermediaries. Ho4e+er a closer loo indicates that ne4

ty(es of intermediaries are essential to eDcommerce. &hey include electronic malls that uarantee

leitimacy of transactions. All these intermediaries add to transaction costs.

103; u$tomer (elation$ =roblem$:

#ot many /usinesses reali8e that e+en eD/usiness cannot sur+i+e o+er the lon term 4ithout

loyal customers.

103< =roduct$ =eople wonDt bu% online:

*maine a 4e/site called furniture.com or li+in.com 4here +enture ca(italists are in+estin

millions in sellin home furnishins online. *n the case of a sofa you 4ould 4ant to sit on it feel

the teture of the fa/ric etc. Beside the sofa test online furniture stores face a costly return 4hich

maes the (roduct harder to sell online.

103> orporate Eulnerabilit%:

&he a+aila/ility of (roduct details catalos and other information a/out a /usiness throuh its

4e/site maes it +ulnera/le to access /y the com(etition. &he idea of etractin /usiness

intellience from the 4e/site is called 4e/ framin.

103? 4ig- (i$k of &nternet StartCup:

Many stories unfolded in 1''' a/out successful eecuti+es in esta/lished firms lea+in for

*nternet startDu(s only to find out that their etDrich dream 4ith a dot.com 4as ust that D a

dream.

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11 T-e (ea$on$ for u$tomer$ ouldFS-ould not /ike to +$e !

ommerce:

111 T-e rea$on$ cu$tomer$ $-ould like !ommerce:

Faster /uyinKsellin (rocedure as 4ell as easy to find (roducts.

BuyinKsellin 2%K.

More reach to customers there is no theoretical eora(hic limitations.

Lo4 o(erational costs and /etter 6uality of ser+ices.

#o need of (hysical com(any set-u(s.

Easy to start and manae a /usiness.

:ustomers can easily select (roducts from different (ro+iders 4ithout mo+in around

(hysically.

112 T-e rea$on$ cu$tomer $-ould not like ecommerce:

Any one ood or /ad can easily start a /usiness. And there are many /ad sites 4hich eat

u( customers9 money.

&here is no uarantee of (roduct 6uality.

Mechanical failures can cause un(redicta/le effects on the total (rocesses.

As there is minimum chance of direct customer to com(any interactions customer

loyalty is al4ays on a chec.

&here are many hacers 4ho loo for o((ortunities and thus an ecommerce site ser+ice

(ayment ate4aysC all are al4ays (rone to attac.

12 (eference$:

,asu(ta Su/hasish ,e+raAra4al Anthony *oannidis and Shanthi>o(alrishnan ;1'''


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,holaia =u/y =oy "ean L. "ohnson Al/ert ". ,ella Bitta and #ihilesh,holaia ;1''3


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Supply Chain Meena Bazar

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