The pressures of three businesses developing themselves online

Types of businesses that can be run through the Internet and the World Wide Web

 

The three types of businesses that I am going to focus on are Retail and Auction, Recruitment - Recruitment services and Leisure - Gambling.

Retail and Auction

There are plenty of websites that come under this category such as Amazon, E-bay, Bidtopia, Bidville, eCRATER etc. The one I am going to focus on is Amazon.

I believe that Amazon is the best online retail and auction site currently in today's world.

Have a look at how Amazon have been successful by clicking on the link below

http://articles.submityourarticle.com/the-story-behind-amazon-from-humble-beginnings-to-supernova-success-191064

The pressures that Amazon face are explained below

Competence: The e-commerce field has evolved rapidly and it is highly competitive, companies such as EBay is a constant danger to the company.

Inventory: In order to meet delivering times, amazon.com has to maintain an important inventory; this could be risky due to the fact that demand of products is constantly changing.

Performance: The company has to demonstrate and justify the high value that others have given to into the financial market.

Lack of confidence: From individuals to buy online, countries where use of internet is not as common as in developed countries, consumers may present a lack of confidence to process their bank details online, for example, in most of South American countries, EBay present serious problems with customer payments due to the fact that in various countries, there is no regulation for online payments (Individuals do not trust sells online).
 

 

Recruitment – Recruitment services

There are plenty of websites that come under this category such as totaljobs, jobsite, monster, jobserve, reed, jobsguardian etc.

 

If you want to look at the ten best recruitment sites that I think are the best then click on the link below

http://www.topsite.com/best/recruitment


I am focusing on monster.co.uk which has pioneered the nation people get more out of work by showing them that a better job was out there.

The main focus of monster is too base it online so that everyone has easy access to the website. For monster this is the best way to get people to use their company by having a website online. Their organisation's lifeblood is their customers. Without them, there is no monster.co.uk. They measure their satisfaction and loyality and treat their customers as though their lives depended on them.

A link to Monster.co.uk - http://www.monster.co.uk/

Monster innovate relentessly - As a technology- enabled enterprise, they must drive innovation in order to grow and to prevent others from copying our success. To that end, they will question the status quo, they will think big and will innovate through the lens of our customers and consumers. And they will be relentless in execution to make innovative thinking a reality.

The pressures that face monster are listed below

They realise that to grow by offering innovative services to the largest possible number and variety of consumers across the world, they must be representative of the greatest possible range of needs, cultures, desires and values.

The amount of competitors that could be a threat to monster are, in my opinion, increasing day by day, only because I believe that more and more companies want to rectruit extra staff for example, so recruitment, for me, is one of the biggest markets online in the world. Hence the huge competition of other recruitment companies.

Leisure - Gambling

There are many websites dedicated to betting such as Ladbrokes, Coral, Bet365, Betfred, William Hill, Betfair, Paddypower, Skybet etc. I am going to focus on the development of the website Ladbrokes and how it has used advertising to widen its customer base and to increase customer satisfaction.

I personally believe that betting in shops/online is increasing in today's world as more and more betting websites are being created and coming up with new ideas to get people to use their site. For example, Ladbrokes use an advert on the TV which involves the sky sports presenter Chris Kamara (Kammy) and a crazy Italian football commentator called Tiziano Crudeli when this happens, click on the link to find out if you haven't seen it already!

http://www.youtube.com/watch?v=HmdigLFduDk

Ladbrokes is the most recognised betting brand in the UK. They have begun the process of evolving the brand to make it more exciting, placing customer experience and insight right the heart of their offer.

 

Betting and gaming online or increasingly on mobile continues to grow. Ladbrokes are making good progress in acquiring and developing improved technology, expanding their range of Digital products and delivering a more compelling and competitive offer to their potential customers.
 

 

Ladbrokes net revenue is strong and is continually growing. 33% digital sportsbook using mobile increased from 12%.

The gambling act in 2005, saw betting shop opening hours extended to between 7am and 10pm accompanied by the removal of restrictions on radio and television advertising. But within weeks, Ladbrokes launched a £5 million national TV advertising campaign: a 'first' for the company and for the bookmaking fraternity.

I think that Ladbrokes have developed themselves on the internet extremely well with the amount of competition they have received from other online betting shops. They have been under some pressure from other competitors such William Hill, Bet365 etc and to counteract this pressure they have made the following changes.

Further growth in machines from; Yield managment, tailoring games and product to the local demand. OddsOn to be extended onto machines in H2 to personalise the experience. New and exclusive content from multiple suppliers. Robust cost control and a renewed focus on local market competitiveness. Innovating customer experience at a lower cost per shop.

Also Ladbrokes have aimed for the following changes to try and stop the pressure from other competitors.

New improved Sportsbook launch scheduled for Q2. Further improvements in Sportsbook and wider gaming business in place for 2012. Growing Mobile further in 2012. Additional games in 2012 on mobile and tablet. More apps including bingo and Euro 2012. Agreements with Realistic and Probability to expand range of mobile gaming products. Agreement with SkyIQ to improve customer relationship management. New mobile platform on track for Q2 to optimise customer experience.

Ladbrokes retail estate, including the UK, Ireland, Belgium and Spain, encompasses 2,700 outlets, while Labrokes.com, with 800,000 active clients, offers betting on 13 tailored sites in nine different languages; supporting 17 currencies.

Study of Amazon

History of Amazon

Amazon.com was Incorporated in 1994. Sells first book in 1995. Launches its Associates program in 1996. Becomes publically listed company & Introduces 1-Click Shopping in 1997. Amazon Acquires iMBd.com, begins Selling Music, launches Amazon UK and Amazon Germany & begins selling movies in 1998.

Begins Selling Electronics, Toys, and Games & begins selling Software, Video Games and Gifts in 1999. Opens Camera and Photo Store & launches Amazon Marketplace in 2000. Introduces "Look Inside the Book" function in 2001.

Launched the Kindle in 2007. Introduced the Kindle 2 in 2009. Launches 'Price Check by Amazon' in 2010. Launches Amazon App Store for Android, John Locke becomes the first independent million selling author on Kindle & kindle Fire and the Kindle Touch was announced in 2011.

 Challenges that Amazon faced in the early years

Profound challenges have faced Amazon. Profits are stagnating, competition is blooming, and even people who are optimistic about Amazon are concerned about downward pressure on prices. Analysts, while crediting the company with growing from a money-losing electronic bookstore into a proiftable online mall with international reach, caution that the pressure on Amazon's profits shows no sign of letting up.

The major competitor of Amazon is EBay.

These are some other competitors:

Netflix

eMusic

Elastra

Inspire My Design Ltd

P.E.S.T Analysis on Amazon

Political

International policies: In particular countries these may interfere with the expected growth of the company.

Economical

Currency fluctuations: In various countries where currencies are highly devaluated in comparison with the dollar, it may bring additional costs to the company.

Economical tendencies: In most cases, individuals rather buy in their neighbourhood stores, than going online. Customers prefer doing the regular commercial process of going to the store, paying the product and getting it instantly than going online, processing their bank details and waiting for several days to obtain the item.

Social

Ethical and religious factors: In some cultures Internet use is not allowed due to the fact that at some point contents may damage their cultural, ethical and social believes.

Technological

Amazon.com is a company highly involved into the technologically field, and its success has been well achieved over the past six years, although many challenges face Amazon in the fast paced environment of the Internet hence, amazon.com has to face this challenge, finding innovative ways to stay ahead of their competitors.

SWOT Analysis - Strength, Weakness, Threat and Opportunities of Amazon

Strengths

Brand recognition: Amazon.com is very well-known.

The business model

Diversification: Have varied the products they sell

Business evolution: Amazon.com has continually reinvented their services, increasing their value.

Weaknesses

Strategies based on low prices attract more customers.

Growth.

Offering free delivery is expensive.

Opportunities

Pre-ordering: Increasing pre-ordering of products is a great business.

Various providers

Web services

Expand the brand to international markets.

Threats

Competence: The e-commerce field has evolved rapidly and it is highly competitive, companies such as EBay, Wal-Mart and Google are a constant danger to the company.

Inventory: Demand of products is constantly changing.

 Growth Strategies and the future plans for Amazon

Amazon has redefined e-commerce. Amazon makes everyone else look irrelevant, including giants like Walmart. Amazon also re-invented books with the Kindle, and you could argue they re-invented the Internet by introducing all sorts of cloud computing and cloud storage services.

Amazon brought in $57 billion in sales with operating income of $531 million.

Amazon’s profit margin is next to zero, and seemingly has way more upside (as they scale) compared to Apple. After all, Apple could face pressure from the onslaught of Android devices and from Amazon’s own Kindle Fire platform.

It is in their interests to quietly destroy the profitability of mobile computing hardware, harming their competitors (such as Apple) while building up their profits where others have a hard time competing.

Amazon.com has innovated along the years reaching highest levels of customer satisfaction which can assure their position into the market for future years.

Study of Tesco

Comparing two existing online businesses

For this assignment I will compare and contrast two online businesses, the businesses I have chosen are Tesco & Amazon.

History of Tesco

Jack Cohen began selling surplus groceries from a stall in the East End of London in 1919. The first own-brand product sold by Jack was Tesco Tea - before the company was called Tesco. The name comes from the initials of TE Stockwell, who was a partner in the firm of tea suppliers, and CO from Jack's surname. In the 1930s Jack Cohen grew the business by buying stores in the expanding London suburbs.

Computers for Schools was launched in 1992. The Every Little Helps strap line was launched in 1993. The first two Tesco Express stores opened in London in 1994. The Tesco Clubcard was launched and with the introduction of Clubcard, Tesco overtook Sainsbury's in market share in 1995.

Tesco.com, launched in 2000, has grown to serve over 500,000 customers weekly. A new 'Every Little Helps' campaign was launched in 2004. Tesco Direct, their catalogue business, launched in 2006. A new Clubcard app launched in the UK in 2010. Tesco launched the new Everyday Value range to replace Tesco Value in 2012.

Number of stores - 3,054 

Revenue for 2011/12 - £42,248m

Current share price – 360.55p

Challenges that Tesco faced in the early years

The following companies are the major competitors of Tesco PLC:

ASDA

ALDI

John Lewis

Marks and Spencer

Morrison’s

Sainsbury

These are all competitors of Tesco and have all been battling with Tesco in order to survive and show that they have to be taken seriously.

P.E.S.T Analysis on Tesco

Political

Politically, the recession is currently affecting all the countries which may lead to higher numbers of unemployment. As one of the fastest growing retailers more jobs will be available with Tesco therefore helping to reduce unemployment.

Economical

One of Tesco’s competitive advantages at present relates to their overwhelming physical presence, but there are issues about Tesco driving out the competition from other retailers.

The situation is in no way being assisted by the ever expanding chains of store.

Under EU law, there is presumption that an organisation with a large market share is dominant. The concerns with this are that quality of products and services will slip and there is a risk of paying higher prices.

Tesco to date has not been assessed as posing a risk of exploitation but should bear this in mind.

Social

This involves lifestyle trends, demographics consumer attitudes and opinions, consumer buying patterns major events and influences buying access and trends in the case of Tesco considerations such as the increase in immigration of Eastern Europeans or increase in young professionals.

Naturally there is therefore a demand for new goods for example; the career minded professional who is a single person.

Technological

Technological factors which have perhaps had the most impact on Tesco have been the growth in the use of the internet. Internet has given new shape to new day shopping.

They have capitalised on the use of online shopping forum Tesco direct and provide a delivery service through their website at www.Tesco.com which has aided the company to cater to a larger segment of people.

Tesco are also instrumental as a retailer in supporting carbon reductions and have created a £100 million Sustainable Technology Fund for this purpose.

SWOT Analysis - Strength, Weakness, Threat and Opportunities of Tesco

 

Strengths

One of the largest and renowned grocery retailers.

Diversified into different countries with about 1 million workforces from different backgrounds.

Won several retail awards for keeping up their standards and providing best retails services.

Continuously expanding with propositions of opening several stores on an international level.

Use its own-brand products, including the upmarket "Finest", mid-range Tesco brand and low-price "Value".

Offer loyalty card schemes to customers.

Weaknesses

Due to the current economic conditions Tesco may suffer from the rising cost of living and lower incomes available to the public resulting in less demand for the non essential and mid to high priced items.

Due to the ongoing recession Tesco’s Finance profit levels were impacted through bad debt, credit card arrears and household insurance claims. This could continue if the market doesn’t see change soon.

Retained its position as a price leader in UK markets.

Opportunities

The third largest global grocer which indicates a level of buying power to ensure mainstream economies of scale.

Tesco Direct has been one of the recent achievements which have been seen as one of the important tools in increasing the sales margins.

The online and catalogue shopping will grow the use of technology.

Tesco mobile have grown ¼ million customers in 2008 and moved into profitable status suggesting further growth and development within this technological area can be developed.

Threats

Loss of employment and lower income available will impact and strategic focus may need to change to lower priced basic products with less focus on higher priced brands and luxury products suggesting a change in pricing structure due to the recession.

Rising raw material costs from both food and non food will impact profit margins.

Has always feared the threat of takeover from the market leader Wal-Mart who has both means and motive to pursue such action. With its alliance with ASDA in the UK they are one of the nearest competitors.

Growth Strategies and the future plans for Tesco

To be the most successful international retailer.

Tesco has products that will be suitable for different geographical areas, population or age.

Tesco has a well-established and consistent strategy for growth.

Tesco aim to be as strong in non-food as in food.

Tesco emphasis on providing value services and to earn life time loyalty.

Have close connections with charitable organizations like cancer research, race for life etc.

The expansion of Tesco relies on retaining existing customers and acquiring new ones.

Tesco's structured approach to training and developing its existing and new employees provides a strong foundation for its continuing growth.