Case Study of TPP Company

Module: E-business strategy and models (EBU4007_2) Tutor: Zahra Salimi Student name: Jieliang Zheng (1009249) Student email: jz1amt@bolton.ac.uk Submission Deadline: 22 November 2011 Words: 3928

Question 1
Evaluate e-business adoption for TPP by considering various internal and external factors that can affect their e-business success. Solution: 1.1 Internal factors evaluate Usually to evaluate the internal of e-business will basic on 5 Ms, which is: man, material, machinery, money, and management (Jimnez et al., 2007). This paper will discuss the respectively to them: 1.1.1 Man First, the new electronic business system construction and operation, must ensure that the necessary personnel (Jimnez et al., 2007). TPP can use the computers and network with staff, these staff also familiar with TPP's business processes. Without these people, e-business implementation is impossible. The quality of personnel is another factor, the level of technology and ethical considerations (Jimnez et al., 2007). While conducting e-business training staff to be more skilled use of computer, networking and communication skills to conduct e-business activities is necessary. 1.1.2 Material The quality of the carpet determines the business success or failure. In this one, the carpet material can be considered as a factor. TPP also provides repair, cleaning, restoration and dry cleaning services. The materials used these in the process will also affect in the quality of services, such as washing detergent and repair materials (Chaffey, 2006). 1.1.3 Machinery It is necessary to have mechanical equipment to construction and operation e-business system, such as computers, Internet and software (Chimay & Ruikar, 2008). TPP The company has two computers can connect to the network. This makes the company has conducted e-business basis. Of course, these devices will affect the quality of construction and operation of the system (Chimay & Ruikar, 2008; Chaffey, 2006). High-quality equipment, you can ensure system reliability and speed, and high-performance software tools that enable employees to work more convenient, easier and efficient (Chimay & Ruikar, 2008; Chaffey, 2006). 1.1.4 Money

TPP's a certain amount of money invested in the electronics business (Chaffey, 2006). Web page building, computer purchasing, internet access and staff training needs money to get (Chimay & Ruikar, 2008). This is a basic factor in the start up and running the TPP e-business system. More money can buy more reliable and better equipment and training personnel, and can reduce risk. 1.1.5 Management Good management, to ensure that the TPP e-business run more smoothly: In this case of TPP, there do not have large-scale personnel changes in personnel management. This factor makes the TPP is a smooth and successful conduct of electronic business. Supply chain management, e-business supply chain management is an important guarantee (Chaffey, 2006). Materials, production, inventory, sales, service and transportation, these activities will affect the cost and efficiency of e-business (Chaffey, 2006). TPP also collect and deliver services in the region to attract customers. Thanks to the Internet with a high degree of flexibility, so e-business requirements management and operation of the TPP is more flexible (Phillips & Wright, 2009). This will affect the operational efficiency and customer satisfaction. From the results, TPP did not get the majority of customer complaints. This proves that TPP has a good change and risk management. 1.2 External factors evaluate There are two parts of external factors, micro- environment and macro- environment (Jimnez et al., 2007). The factor which is close to business and affects its capacity to work is micro- environment. And macro- environment is creating opportunities and threats to business units. 1.2.1 micro- environment 1.2.1.1 Customer TPP is a source of profit of sales and professional services. TPP's profit in the sale of the carpet only has 28%, compared to the total amount of profit. The main contributions in sales are from the end-user, government and lower retailers. The main profit comes from services (72%), the major factor is other retailers and wholesalers send customer to the TPP who need services. Because of they do not have that kind of business. Sales of other services can be considered the ultimate purchaser has

purchased the carpet and businesses. 1.2.1.2 Competitors TPP in carpet sales have seven strong competitors. Those companies have longer history, experience and market share compared with TPP, in the traditional business of these companies take advantage. However, the relative situations of these companies do not conduct e-business, which makes the TPP can increase the customer base and network access to those who like e-business customers. 1.2.1.3 Intermediaries TPP advantage compared to other competitors is that they can provide professional services to consumers, while others cannot. These professional services is continuous and stable, low share of sales even if the carpet. In the services market TPP is a company with seven partnerships those company are intermediaries of TPP in the carpet servers marketing. The seven companies will be sent to customers in need of services TPP, the TPP's service share growth, and this is a win-win business result. If other companies want to expand their business to the carpet service, they need to purchase equipment and train staff. The cost of these activities is clearly not accepted by most companies because the services in the carpet market in TPP have the experience and history. For the line in the carpet weak sales of TPP, this approach can also be of interest and expand the market. Carpet sales in other intermediaries also exist, for example some e-business platform to retailers on the website, and inventory shortages competitors (Laudon & Laudon, 2006). 1.2.1.4 Suppliers TPP does not create their own carpet, so the carpet manufacturer to become its suppliers. Excellent suppliers could provide high quality products and cheap efficient logistics, which can improve the quality and flexibility of e-business in the TPP. In the TPP to provide customers with professional services of carpet, some suppliers also need to purchase equipment (or tools), consumables (such as cleaning agents) or staff training programs. 1.2.1.5 Public In some cases, the public sector e-commerce is a key success factor. Comment on the media and institutions will affect the public's understanding and insights (Hamidi & Safabakhsh, 2011). Meanwhile, the potential customers who through the media know TPP, they can e-commerce transactions or queries. Some large institutions (such as government) to select the TPP also will increase public trust, and thus increase sales.

1.2.2 Macro-environment factors (PEST or SLEPT factors) 1.2.2.1 Social TPP is sold Oriental carpets this kind of product has a national and cultural identity. Therefore, consumers of e-business web site design should to consider some of the properties (Laudon & Laudon, 2006). The first is cultural, TPP required to explain their carpets oriental culture, also need the ability to communicate with customers with different backgrounds. And then factor is consumer habits, to take into account that consumers like payment and delivery methods (Ha & Forgionne, 2008). If society has a culture of online shopping, then the TPP will also bring more e-business customers. In electronic business, the customer transaction process will be worried about the privacy and other ethical issues (Hernndez et al., 2009). TPP is the main profit comes from services, which requires the support of customers. Looked at 5% growth rate in 2010, it is can be considered social factors in this TPP are successful. 1.2.2.2 Legal Act to support and protect the company and its customers on an online transaction or e-commerce is important (Contini & Lanzara, 2009; Contini & Cordella, 2009). TPP can focus on the conduct of electronic business, legal support and protection to carry out if the e-business company. Consumers will be more at ease on the network to purchase products and services, if the law protected the rights of consumers in electronic transactions. 1.2.2.3 Economical Good economic environment will provide a better and more opportunities to TPP. On good economic environment, the public and agencies have money to buy carpets or rugs to consider maintenance (Ha & Forgionne, 2008). A stable economic environment but also make people tend to buy works of art or artistic value of the furniture, such as oriental carpets. 1.2.2.4 Political Government policy will affect many aspects (Jimnez, 2007). Government support for network construction, then TPP will get more consumers and technical support. When the government for support of electronic business (such as subsidies), TPP's e-business will be a good electronics market. 1.2.2.5 Technological

E-business is the product of technology, more advanced technology and e-business use will increase competitiveness of e-business (Chimay & Ruikar, 2008). Advanced IT technology allows e-business web site more attractive, such as adding multimedia. Companies using data analysis techniques to analyze customers and competitors' activities, and also can analyze their search engine rankings. This factor on the TPP is not advanced. They only have two computers, servers, and not professional programmers to build e-business systems. Site only six pages and simple message and does not provide automatic order service, this is not enough.

Question 2
Select an e-business strategy initiation methodology and a strategy formulation approach from the set of tools provided for each of them and give a critical evaluation on their appropriateness to the given case study analysis. Solution: 2.1 e-business strategy initiation methodology (SWOT) There have many methodologies of e-business strategy. In this case, it is could use SWOT analysis tools to analysis and make strategy. SWOT tool included analysis the e-business strengths and weaknesses, opportunities and threats (Hill & Jones, 2006). The target of SWTO is analyzing the company's current situation and environment to develop and adjust the e-business strategy, making strategy a more suitable company status, resources and capabilities. SWOT is a flexible tool, when the company encountered opportunities or threats, SWOT can quickly and accurately adjust and determine new strategies (Hill & Jones, 2006). SOWT represent the four questions, in the formulation of strategies need to be questionable, they are: 1. How can we Use each Strength (S)? 2. How can we stop each Weakness (W)? 3. How can we exploit each Opportunity (O)? 4. How can we defend against each Threat (T)? (Hill & Jones, 2006) 2.1.1 Strength: TPP is the only region to provide professional cleaning, repair, dry cleaning and repair services. Because of this service is relative to the sale of products with high added value, so this advantage is difficult to be copied. TPP is the only company to carry out e-business in the region. Other seven companies

did not enter the e-market. This allows the network to TPP customers more inclined to purchase products and services. This advantage will be reflected in the carpet sales, it is not dominant in the field of TPP, and e-business has brought to 1.5% TPP carpet sales. TPP and other carpet vendors have established a relationship, when customers need professional services to other vendors will order transfer to TPP. This makes the TPP's position in the service market is more difficult to be broken. The current e-business of TPP was very basic, but they start to add a collection and delivery service within the region. This makes the influence of TPP spread to remote areas. TPP has electronic inventory management, billing and accounting. This factor makes the TPP work and management will be more rapid and flexible. 2.1.2 Weakness TPP has seven strong competitors on the sale of Oriental carpet in off line business. These seven companies have a longer history and greater market share than the TPP. TPP is not the first in the region oriental carpet sales company, which makes the sale of TPP affected. 2.1.3 Opportunities Explosive growth of online consumer electronics business community will create opportunities for the TPP. Carpets services market has the potential to have sold carpets many need professional service. Increasingly influential online media, social media and research engine give the chance to TPP to enable consumers and to expand the influence of more easy to find information about TPP. 2.1.4 Threats There have the threats in technical and equipment risk with e-business systems and the Internet. Sites, systems, software and Internet business TPP instability will suffer. Also, some potential customers may be because the system is not functioning properly and the choice of other companies. The same industry in other regions becomes the competitors, through the use of e-business. TPP through use of electronic commerce to expand its customer base,

other same industries company can also use the same strategy to snatch TPP customers. Business alliances and partners destruction could be threats. TPP is a lot of income from business partners, those vendors witch cannot provide consumers with the carpet service. Although these companies into the service area are difficult, but if they build relationships with the carpet service providers in other areas it will be a major threat of TPP. Changes in consumer propensity purchase will be a threat. When consumers are more inclined to buy other goods rather than Oriental carpets would be threat. For example, some young people are willing to buy mobile phones and other electronic goods, rather than carpet, when they have money. 2.1.5 Summary TPP have competitive products and services, and also have business partners. These advantages make it easier for in e-business success. But the threat is accompanied by other, such as the emergence of competitors and changes in consumer buying intentions. But most of these threats can be avoided and response. 2.2 e-business strategy formulation approach (Scenario planning) After use SWOT analysis of the TPP environment, now select the scenario planning tools to develop e-business strategy. Scenario planning requires companies to design several future scenarios, and analysis of future opportunities and threats, and thus develop a different plan (Pattinson & Sood, 2010). This tool enables companies to freely respond to future opportunities and threats that occur (Pattinson & Sood, 2010). 2.2.1 Scoping TPP is needed to solve the problem: How to development current e-business system, and use it to deal with other carpet sales competitors. How to development current e-business system, and use it to to expand and entrenchment in carpet service market. In the environment witch e-business market explosive growth, how to deal with possible threats and opportunities in future. 2.2.2 Trend analysis

TPP is a carpet sales environment in which competitors do not establish e-business, but there is no carpet service competitor. This environment is clearly beneficial to the TPP, but the e-business development may give TPP bring competitors in the other area. TPP existing electronic business system is very basic and ordinary, not a comprehensive e-business services and attractive site. If the competitors have a more advanced and attractive system will impact on the TPP. 2.2.3 Building scenarios and generate options Through the analysis earlier in this article, this section can be created in some of the key scenes in the future. Some minor factors may bring different scenarios, where the small scene will be ignored. Here are three kinds of threats emerge in the case, TPP may encounter scenarios and generate different options (using the key words to build the matrix) (Pattinson & Sood, 2010): A: Here we use the TPP new e-business system and competitors e-business on carpets sale as keywords.

Fig 1, Scenario A In this scenario, the best scenario for TPP in the lower left corner in Fig 1: When the TPP to the next level of ICT and other vendors and did not conduct e-business. At this point, TPP's e-business will attract more consumers to buy products and services. TPP's influence and brand will spread through the network. At this point, TPP's e-business will attract more consumers to buy products and services. TPP's influence and brand will spread through the network. The worst situation is in the upper right corner in Fig 1: the TPP is not yet complete electronic business upgrade and other vendors start run e-business. In this case, TPP's performance will be affected, customer groups will fall. TPP in off line sales market is not dominant and this disadvantage will also appear in the e-business. This will

depend on the extent of the impact to the level of other vendors e-business. B: Competitors and TPP's new e-business systems in carpets service market become key words. In this scenario, competition is involved in e-business market.

Fig 2, Scenario B In scenario B, the situation is good: there are no other area service providers to enter the TPP and TPP also upgraded the e-business, it is in lower left corner of Fig 2. TPP will further consolidate its position in the field of carpet service and influence. TPP customer groups will be more trust business, and partners will strengthen partnerships with TPP. Try some of the high-risk services are also possible, because the market does not appear in other threats. The worst case is the upper right corner in Fig 2. At this point, other carpet service providers have started business in the TPP area where the through e-business, but TPP was not establish a more advanced e-business systems. Then TPP will lose customers carpeting services. Partners is also possible to leave, they may get relationship with these new companies. C: rupture with existing partners, these companies will enter the market of carpet service. This situation and TPPs new e-business system become key words.

Fig 3, Scenario C Figure 3 shows the best situation of TPP at lower left corner. Partners did not go into the field of carpet service, and TPP have completed e-market upgrade. At this time the situation is similar to scenario B with the best scenario. Figure 3 shows the worst situation of TPP at upper right corner. Partners (distributors of carpet) began to offer a professional carpet service, and TPP are not ready for their new e-business. Although the TPP in the carpet services have an advantage and status, but this will be affected. Those from the original partners of the order will disappear. Meanwhile, the original customer groups will begin to diminish.

Question 3
Apply the above selected tools/methodologies to the TPP business scenario to initiate an e-business and marketing strategy and formulate an effective strategy based on the information provided in the case. Solution: Because TPP existing ICT used in e-business level is very low, so they need to do some basic improvement. In this paper begins by discussing how to do some basic e-business upgrade. After this scene, it is will use Q2 to discuss the strategies basic on different scenarios. 3.1 Based improvement This section will be divided into e-business and e-marketing to enhance two parts.

Prior to this, TPP should be use centralized strategy to manage e-business (Zhao et al., 2008). Establishment of a dedicated team (or team) in e-business can focus on network clients, and can make e-business run more targeted. Company can train this more professional team members in e-business and do not need to train all employees. The team can also carry out new services and products features on the Internet. 3.1.1 Based e-business improvement Establish all Internet sales and e-business services and processes, include: The company has the data of all products and services, and uploaded to the site (Jimnez, 2009). Including comprehensive data, such as color, size, and delivery time and so on. Enables customers could to get all product information witch TPP can provide. For different customers different prices and options. E-business team can create for end users (B2C mode) and business (B2B model) different sales models and programs (Chimay & Ruikar, 2008). Use instant messaging software or other website build tools to make an answering system (Fernandez & Chalmeta, 2005). Such as using MSN, Skype, and ICQ or inserting chat window into the page. Enables customers to understand product information that TPP can provide (Fernandez & Chalmeta, 2005). A variety of payment methods, such as support for credit card, online banking transfers, PayPal. Possible to support all payment methods, which can allow customers to select those they like and accustomed to use (Laudon & Laudon, 2006). The order status can be queried interfaces, including the provision of location information and process information (Chimay & Ruikar, 2008). If the order to use logistics companies should provide the appropriate Web site and reference code (Chimay & Ruikar, 2008). This allows customers to arrange a more convenient time to collect the goods. For those not accustomed to e-business customers, this approach can alleviate their concerns. Complete customer relationship management system (CRM). TPP lack of a functional CRM system, customer database creation is necessary (Evert, 2008). CRM systems can be used to analyze customer buying trends and TPP can use these data for more targeted and effective marketing (Evert, 2008). For example, after sending the customer to buy carpet maintenance and carpet cleaning advertisements.

3.1.2 Based e-marketing improvement In the company's Web site to make the necessary marketing: Use more text, pictures and effects, on the site of the product introduction. Here, it is necessary to provide pictures (Hamidi & Safabakhsh, 2011). Customers can be more intuitive understanding of the products and services. Posted advertising and product promotions information on the website (Gilmore et al. 2007). If it is possible the e-business team can provide individual promotional activities for the intent client. This in order to encourage and attract more customers shopping on the TPP website (Gilmore et al. 2007).

3.2 Scenario response plan In response to different threats, the following article will discuss the worst-case scenario for TPP witch is mentioned in Q2. These programs will be divided into two parts, e-business and e-marketing. From the three types of scenarios, this can be seen as soon as possible to upgrade the TPP e-business system is urgent. System upgrade can get more benefits, the threat comes in can reduce risk. Scenario A In e-business: When competitors (carpet sellers) to carry out the e-business, the first thing to do are analyzed and identify strengths and weaknesses of their system. Then TPP own e-commerce system for targeted modification, the advantages of absorbing competitors. In e-marketing: the first to use "cost leadership strategy", the use of more expensive and reasonable prices to attract customers (Gilmore et al. 2007). Then using the differentiation strategy prominent features and characteristics of TPPs carpets, and it is could let consumers attracted by these features (Chen, 2008). Scenario B In e-business: TPP need to strengthen their advantage which is their in this region physical. Strengthen cooperation with logistics companies and making the TPP e-business customers can more quickly access products and services. Introduction of new services for e-business customers, such as on-site service or pick up (pick up time can be customized).

In e-marketing: TPP can buy a comprehensive marketing in the network, such as posting web advertising, open social web account, upload videos to YouTube in order to enhance their visibility and influence (Hamidi & Safabakhsh, 2011). Use the cost leadership strategy to make their services cheaper. Using the differentiation strategy to highlight their own characteristics of services, and make customers are attracted. In the ad can also highlighted the company's history and experience of local services, making the local customers more confidence in TPP. Scenario C In e-business: First need to understand and analyze these new competitors, service offerings, and then use the specific strategy introduction new and more specialized carpet service products basic on e-business are necessary. In e-marketing: This program will work with Scenario B are very similar. Using the differentiation strategy and cost leadership strategy make TPP has more advantages. In a comprehensive online advertising service in the carpet TPP emphasized the history and technology, making customers more confidence in the quality of the TPP. 3.3 Conclusion TPP in which the business environment is an advantage compared to competitors. Threat in the current TPP few options to counter these threats sometimes while similar. TPP is a need to ensure that soon as possible to create a new e-business systems and networks, and e-business team training on schedule.

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