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The present paper is aimed at the development of the strategic ways through which IDS (Ideal DIY Store) would transform its business to click & mortar business from the traditional business model of bricks & mortar business. Bricks and mortar business can be well explained as such business organization that has a physical presence and deals with its customers face to face. But in this era of modernization, there is a need of having click and business model in the organization in which there exist both online and offline operations including a website and a physical store. In the present task the main responsibility is to develop a click and mortar business model for IDS so as to build strong business model by resolving the present issues faced by the company (David and Terry, 2010). Information and communication technology (ICT) is generally used as the extended word for information technology (IT). This is the specified terminology in order to include the unified communications, integration of the telecommunication and other computer related devices such as the middleware, software and audio-visual systems etc. These systems helps user in order to store, transmit and manipulate information which is required by them for the effective decision making process (Murray, 2011).
In information and communication technology convergence is made for the telephone network with audio-visual systems with a single cable or link system connecting them. The main objective of developing such networks would be in terms of the economic benefits attained by cost saving at such networks. Looking into the global cost in the IT systems there is 31% cost for the personnel deployed, 29% for software cost, 26% for hardware and 14% for the external service provider and cost minimization is attained through such networks. The present paper would highlight the role of suitable e-business model taking the case study of Don’s Lumber Company which would develop click and mortar business model using the e-business approach. The final Task would elaborate the importance of website design, intranet and extranet and usability of the site considering the case scenario of Amazon.
Information and communication technology is the buzz word in present age wherein numerous applications have been explored with the ICT in every field such as health care, education, manufacturing, e-commerce and others. Benefits of implementation of ICT in different fields relate with the lower costing for the systems developed and reducing the distance between service user and service providers. There are several challenges which needs to be tackled for making effective usage of ICT in the present age and these would include development of efficient infrastructure, information security systems, updated information and training to the service users for accessing the information through systems. All these steps would be critical so that information and communication technology can be implemented for the benefit of masses.
Aim of present paper is to serve three major learning objectives which can be given as under:
LO 1. Understand the scope of e-business
LO 2. Understand how the internet works
LO 3. Be able to use different e-business models
LO 4. Be able to use good website design
These learning objectives would be obtained in the present research context with special reference to the Ideal DIY Store so that benefits of click and mortar business model can be understood.
Scenario 1 ISD
In this present Task a brief analysis of developing E-business solution in the business will be done. The benefits and barriers related with the online presence of business and also, the security issues with this system and the respective preventive measures would be examined. Apart from this significance of internet technologies would be studied in this task.
E business solution
1.1 Problem statement 1: Establish relations with suppliers
1.1.1 Solution to the problem statement 1: With the help of e-business solution developed by IDS there would be direct connection established for IDS. Timely feedback can be shared by IDS with their suppliers which will help in developing good relations and long term commitment (Beynon-Davies, 2014).
1.2 Problem statement 2: Unable to evaluate demands
1.1.2 Solution for problem statement 2: With e-business solution managed by IDS consumer satisfaction and demand can be assessed through online methods wherein consumers can fill in surveys. Further social media can be used in order to evaluate consumer needs which are not being done at present.
1.3 Problem statement 3: Unable to understand customer problems
1.3.1 Solution for problem statement 3: With the help of e-business solution managed by IDS timely information would be taken from consumers regarding problems faced by consumers for the products and services provided by the organization. This would help in knowing about the problem areas for customers and enhancing their satisfaction level.
Benefits and barriers to this business considering an online presence
Deploying the click and mortar business model in the IDS would generate some sorts of merits and demerits which are discussed here as:
- With the present business, by its online presence IDs would be able to access the global market very easily.
- Due to the introduction of new online system, the expenses related to human resource and business premises would reduce (Meyer, 2007).
- The online system would be available 24*7.
- There would be easy control on the messages or content delivered to the customers.
- For the e-business model, an effective and efficient central storage system can be developed.
- Developing click and mortar system in the business would cost very much for IDS in the context of maintenance and ongoing expenses for the IT requirements.
- For development of click & mortar business model, an efficient and expensive web designer would be needed.
- The organization has to update all the information provided on internet for the customers (Amor, 1999).
- Also, the organization has to train the staff for using the online system which would result in extra expenditure for the company.
Identify the security issues to IDS e-business model and describe prevention measure you would suggest.
The security issues to be faced by IDS e-business model are discussedhere underwith the related preventive measures:
- Unauthorized access: The IDS e-business model would include the customer’s all financial and personal information which has the chances of being attacked by the unauthorized external factors. For restricting the unauthorized access IDS has to train its users about password policy and password sharing issues (Paul, 2010).
- Intrusion: There are chances of intrusion of suspicious traffic and other malicious activities by the external stakeholders in the online system to access the critical data present in the system. A proper intrusion detection system or firewall should be implemented in the system to avoid such external intrusion and for the safety of the data.
- Phishing attacks: Through phishing attacks on the website users are directed toward unauthenticated sites for accessing their personal details. To avoid this problem, users must be guided for checking the URL before opening any suspicious site so that only reliable sites can be open through the website.
- Virus: Downloading material from internet may invite some virus in the system and would harm the e-business model of IDS (Gerstner, 2012). For tackling this problem, scanning should be done of all the material downloaded from the internet.
Explain the internet technologies and their importance in making an e-business successful.
Usage of internet technologies in the business system helps in understanding the customer’s preferences and feedbacks thereby improving the business relationship with the customers and smooth flow of business. Through the use of internet technologies understanding about the customers can be enhanced (Allan and Christopher, 2011). By observing the purchase pattern of customer, IDS can give product offerings as per their preference for attracting them. It may also help in improvement in the existing style of product offerings by the IDS which would help in building a brand image for the business. Use of internet technologies would also help in reducing the product to market reaching time. All such advantages would support the IDS in developing market intelligence and attaining the competitive advantage in the business industry. Apart from all the benefits listed above, through internet technologies, IDS would be able to improve its customer market share in the overseas market along with the local market. This also would help in easy and less expensive promotion and marketing of the IDS by online means. Feedback from customers would help in knowing their demands and priorities which would be incorporated in the IDS product offering system for meeting the demands of existing customers and attracting new customers.
Scenario 2 Don’s Lumber
Illustrate the different e-business models that can be suited for Don’s Lumber Company
This Task would discuss the improvement in the entire process of company with the implementation of e-business solution in the system. Various business models would be studied with respect to their revenue generating capacity for deciding an appropriate business model for Don’s Lumber Company.
Describe how this process could be improved with e-business solution:
With respect to Don’s Lumber Company which is not having any e-business model due to which its representatives cannot get prices from their supplier easily, through the use of e-business solution business process can be improved. Along with don’s Lumber Company their suppliers also need to implement e-business solution in their system so that proper interaction can take place between the two. E-business model would help the suppliers in sharing their price information on real time basis on internet or after receiving then request from Don’s Lumber Company’s representatives (Steven, 2011). This would eventually result in taking timely Quotation and would reduce the issue of referring back to the supplier for actual prices of raw material. Thus, Don’s Lumber Company response time to the customers would be reduced as prices would be quote in less time. As Online business model offer higher level of accuracy to the users, there would be no chances of any kind of error in offering price to its customers. Price information would be available 24*7 as compared to earlier which was available only during the physical presence of Don’s Lumber Company. Apart from this, Inventory levels can be planned by Don Lumber as per the changes in price and appropriate quotations can be offered to the customers (Marc, 2011).
Analyze each model in terms of its capacity to generate revenue:
In the context of Don’s Lumber Company various individual and combination e-business models can be used. Individual e-business models are given as under:
- Merchant e-commerce model: This model provides an online version of the local store along with the elementary store of the company. By checkering the price and availability of the goods customer can place their orders accordingly. Through the sale revenue would be generated and by a 3rd party payment system payments would be accepted. EBay and Amazon are such business organizations who use merchant e-commerce model (Thomas, 2000).
- Advertising e-commerce business model: In this business model revenue is earned from the business of renting a small space on their website for advertisement. Face book and twitter are the websites using this business model.
- Affiliate e-commerce business model: Don’s Lumber can adopt this business model for revenue generation in the form of commission obtained by redirecting consumers to other sites. The owner does not have to sell any product but by developing a portal through which redirection can be done, revenue can be generated (Christine, 2002).
- Brokerage e-commerce business model: This type of business model provides a platform to the buyer and seller for performing their transaction and revenue is generated in the form of commission from both the parties. Businessorganization having this model would include EBay.
- Information e-commerce business model: Don’s Lumber can use this business model by catering the customers with the specific information they want. They may be charged subscription fee for the information provided.
- Combination of e-commerce business models can also be used for making a proper ecommerce business. The major combination of the ecommerce business models which can be used for Don’s Lumber are discussed here as:
- Web catalogue revenue model: Mostly ecommerce business primary aim is to earn profit and enhance their revenue. Customers can access electronic catalogue and shopping carts throughout the world. So, customers are the main source of revenue generation in these business models (James, 2002).
- Digital content revenue model: The digital content revenue model is a combination of information e-business and subscription business model in which base on the customer desire information on the critical area is accessed and the customer is charged some subscription fees for the same.
- Advertisement supported revenue model: In this business model particular information would be available for the targeted audience free of cost for developing large footfall on the site thereby resulting in advertisers offering revenue to the company for their advertisement promotion on the website. Yahoo portal is the best example which offers vital information to the users free of cost but earn through advertisements on the portal (John and Arthur, 2007).
- Advertisement subscription mixed revenue model: In this type of business model revenue is generated from two sources by amount of fee from the subscribers and by way of advertisements on the web portal. In this model subscribers have the benefit of viewing much lower number of advertisements display on the web page as compared to the normal users.
- Fee for service revenue model: Basically, in this business model brokers or agents services are not offered. In this business model of fee for service revenue model particular services are offered to the customers and the revenue is generated from them only. Such services are of professional nature like by doctors, lawyers and accountants. Online games and other entertainment offers by the businesses also included in this category of service providing to the customers.
- Fee for transaction revenue model: On the basis of transaction size carried out by the users, fee is charged in this business model. For example, for booking ticket for flight or hotel at some tourist location, travelling agents working online would charge fees likewise stock brokerage firms helps customers in accomplish their transaction and charge fees for the same ( John and Marc, 2010).
For developing click & mortar business model for earning revenue, Don’s Lumber can adopt a mix model consisting of fee for transaction and merchant ecommerce model. Before implementation suitability of the model is to be checked in terms of smooth work flow, customer feedback for gaining understanding, knowing customer preference and buying behavior by survey methods and development of automated revenue system for the company. On their web portal, Don’s Lumber can provide critical information as per the customer’s requirement based on which fees can be charged from them. But for developing the appropriate business model suiting the requirements of the customers and to attract and maintain them toward the usage of the website certain implicated features should be considered in advance by Don’s Lumber Company. This business model has the features of low cost for attracting customers, better customer understanding and automated revenue stream which is not available in physical stores of Don’s Lumber. By applying this business model in the organization system Don’s Lumber would be definitely benefitted as the major issues would be resolved.
Based on the study done in the present task evaluation of various e-business models is done for choosing the suitable business model for Don’s Lumber Company. The evaluation is being done on the basis of revenue generation capacity of each business model. For obtaining maximum benefit different business models are mixed properly for Don’s Lumber Company. Considering the viability for revenue generation for the company judgment of suitable business model for Don’s Lumber Company has been made. Thus, it can be concluded that for Don’s Lumber Company mixed revenue model for the merchant and fee for transaction model would be appropriate for marking their online presence.
Scenario 3 Amazon
Under this Task, an understanding about functions of client servers and browsers would be developed and along with it the importance of search engines with respect to the website would be studied. For facilitating proper business communication the functions of intranet and extranet would be explored for a deep understanding.
Analyse the functions of client servers & browsers and the role of the search engine and search facility of a website.
For processing data request from one computer to another a network server is integrated over the local area network or by using internet. Generally, in order to handle customer servicing request network servers are maintained through additional storage capacity and processing. Some common network servers are FTP servers, web servers, proxy servers and online game servers. Most of the websites and email services use client/server networking model (Michael and Ronda, 2007). With the use of client/server networking model, user management and security feature can be enabled. For enabling all the computers to act as either client or server Peer to Peer model can be used in which central storage shared by all the users can be well established. Server act as the power house as it possess higher memory, bigger disk drives and central processors wherein client becomes dependent on the server for the resources and for obtaining processing power. Taking Amazon website as example, some key features related to this networking model are discussed here as:
- Connections are made according to the user’s requirements as there are no fixed connections.
- Large number of users can access the central database at a time.
- Due to the fact that this networking model enables modular approach, software development becomes easy using this.
Figure 1: Showing client/server networking model
Web browsers and web servers are the best examples of client/server networking model. On getting request from the client for accessing specific data server would process the data by offering the access to client. Generally, there is separate machine acting as client and server but it is not mandatory to keep them separate (Marc, 2011). Moreover, two tier and three tier architecture can be applied while using this networking model wherein two tier models would enable direct link between client and server as there exist no intermediary between them in two tier architecture.
Figure 2: Showing the two-tier client/server networking model
Like for saving employee information in a two tier client/server networking model, data tier would contain database while client tier would contain the client application. In the client application, information would be written in the SQL and further it would be saved in the database. The biggest merit of this network is ease in maintenance while its biggest drawback is due to large number of users, reduction in performance level ().
A three tier networking model consists of client tier, business tier and data tier. Client tier would be used for designing purpose by text box and label etc. and business layer would act as intermediary in enabling faster communication between client layer and data layer. Data layer would contain the database.
Figure 3: Showing the three tier networking model
The major merits of using three tier networking model is ease in modification without even affecting other modules, good performance level and speedy communication process. Amazon use search engine optimization as the main marketing tool in which for discovering information online search is made on the web (Thomas, 2011). By using search engine optimization, Amazon can easily reach to the prospective customers by knowing their demands and needs with the help of specific key words. For easy accommodation of the advertisers the results are divided into two parts by the search engine –organic and sponsored part. For placing their advertisement on the popular web pages advertisers place their bids. Search Engine optimization can be done in two ways as white hat SEO and black hat SEO. In white hat SEO, the content of site is improved while in black hat SEO rank of the site is improved. In case of user searching for specific key word, search facility provides the list for all the results available for the search. This system provides ease in navigation on the website and produce good results as per the user’s convenience.
Evaluate the use of intranet and extranet within business communication.
Extranet is used in a computer network to control access from the outsiders. By using extranet firewall configuration is done to limit the access and a secure protocol is developed for authenticating users. In case of extranet actual server which provides access to the web page is placed behind the firewall developed. Firewall is installed in the network to provide access between intranet and internet. Intranet provides access to the authorized people. There would be different level of access for individual and outside users. The database can be accessed on the basis of username, password and IP address allotted to the users. IP address contains a unique format like 126.96.36.199 and provides information about the computer system on which the user is working (Steven, 2012).
The way business is conducted is changing due to arrival of intranet by the organization, offering operational support, transparency, profiling of employee and collaboration etc. Intranet serves many business purposes in the day to day business activities such as decision support, learning, employee engagement and mitigation of risk. Extranet integrated in the organization helps in linking the resources of company through intranet with the suppliers and customer’s intranet. Extranet also helps in providing access to the operational database of the company and legacy system of the company. Thus, it can be said that extranet is very beneficial for strengthening the relationship between the company and its customers and suppliers (Anne, 2009). Intranet and Extranet implementation helps in improving the overall communication and collaboration between the individuals and teams. It also facilitates sharing valuable information easily and at cheaper rates. Such web applications are very critical for developing organizational support and for enhancing communication process with and within the organization’s outside stakeholders eventually leading to effectively managing of business.
In the present paper we have studied about the internet and e-business associated with the internet. In the present scenario of modern age, e-business is getting wide success by generating smooth product flow and providing efficient business operations. For a successful business suitable business models should be selected as such business models lead to success of the business. As discussed in the study also, for developing a suitable business model, combine business models can be used. Also, website design plays a vital role in increasing the overall success rate for the organization. But while designing the suitable website for the business all the related factors should be considered in advance in order to avoid any deficiency or any loss of customers rating.
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