SWOT Analysis of an Online Business
The name of the company is Jordaz and it is located at Jersey Shore Broadwalk. It is a small clothing store, which is planning to go online and engage in e-commerce. The concept of going online can be supported by performing a SWOT analysis and identifying the strengths, opportunities, weaknesses and threats.
Strengths- An e- commerce website is a unique factor for company that differentiates it from competitors.
- It provides a wider range of products and customer support along with better terms and conditions.
- The quicker way of shopping and cheaper products will further increase company’s strengths.
- The operational costs are also lower as compared to physical business.
- 24-7 shopping experience provided to the customers is more convenient than the ‘brick and mortar’ business.
Weakness- The online businesses has many weaknesses as well-
- One of the topmost problems faced by e -commerce websites is of excessive fee charges.
- Another problem is that the customers are often reluctant to share their credit card information for online purchases due to various security and fraud related issues.
- The shipping of perishable goods is very difficult and expensive, as well.
- The shipping duration may compel the customers to purchase their products from elsewhere.
Opportunities- The technology is regarded as a perfect example to expand company’s growth and take advantages of the areas where the competition is scarce.
- The live customer chat support and social media are also helpful in creating consumer awareness and increasing promotions.
- The increase in technology and awareness for e- commerce serves as a potential ground for attracting more and more customers.
Threats- The various legal and regulatory changes can affect the growth of business
- Competition from e commerce giants like Amazon and eBay pose a threat to the pricing policies of smaller merchants.
- Moreover, there are very low barriers to entry of companies in case of e-commerce and hence it poses a great competition (Schneider, 2010).
Issues in International Business
If the store would engage in ecommerce that means it would be accessible to people of different countries, and hence, it is mandatory to gain trust of the customers by providing them excellent services and fast shipping along with feedbacks on our website.
Culture is a tough issue to resolve in case of clothing and merchandise through online sale as the clothing of the store is related mainly to the beach wear it would be appropriate for usage in countries like Australia. This type of merchandise might not be suitable in countries like Russia due to its cold weather or in Middle East. The culture issue can be addressed by making customized products for people of different countries, so that when the people select products they are not confronted with the culture issues. This can be done by choosing customized patterns and cuts and also opting colors of clothes accordingly. Additionally, while addressing the culture issues it is needed to be aware of the various cultures and providing an emotional comfort to the customers by making customized web pages, specific to their cultures.
In terms of language the option of viewing the website in various languages can be used. The customers can pick from a list of languages of different nationalities according to their interest. This will also attract the customers as they can select their appropriate product and view its details in their own language.
While dealing with the Government issues it is necessary that a consensus is developed between the Government of a particular country and the e-commerce business. It is necessary that the online companies are also well versed with their corporate social responsibility principles and abide by them. The permission of the respective Government is also necessary while establishing an online business. A proper knowledge of the prevalent trade policiesqill be helpful in this regard (Kotabe & Aulakh, 2002).
The infrastructure and the Government issues are complementary to each other as the telecommunications industry is mostly regulated by Governments in many countries. The various regulations might limit the expansion of the industry leading to a decrease in data traffic. This means the store needs to advertise by the traditional media, like billiboards and TV so that it gains publicity. Governments in some countries also provide assistance to companies who want to international businesses. For example, the Government of Argetine has a special informative website for businesses named as Fundacion Invertir (Johnson & Turner, 2010).
Complicating Factors
The Internet led to an increase in the speed and efficiency of the business communications. The businesses that breach the ethical standards or laws of other countries are subjected to numerous reactions from the customers as well as the various stakeholders.
In order to overcome this issue, the store would set up an agreement of terms and conditions that would have to be agreed by the customer before placing any order. The acknowledgement by the customer will lead to lesser chances of any conflicts. Moreover, the store website will give equal importance to the state as well as the federal laws.
Another issue that needs to be considered in case of online businesses is that of the sales tax. Different countries and different states charge varied percentages of sales taxes. Hence, customers would be asked to put the zip codes of their countries or states electronically on the website so that the amount of sales tax can be easily determined (Kline, 2002).
Two Prevalent Crimes
Hacking: The hackers usually target those online store and businesses that do not have a lot of security or fire walls built on their websites. There are many reasons why hackers would do this- One is to put a virus on these websites so that every visitor of the website gets a virus. They might do it to change the actual look of the website and mess with people or to gather personal details like credit card and debit card details of the customers. All these practices lead to fraud. Therefore, the website needs to be designed based on the three principles of confidentiality, integrity and availability. It is necessary on for the clothing business to protect the personal information of our customers. In order to maintain the integrity of the system, various tools like the double entry system and modern checksum methods can be used. Moreover, the security system must be available so that every employee can reach it for reporting suspicious activities.
Fraud: Hackers can get the personal information of customers by using any hacking program, which can lead to the misuse of many credit card numbers. Hence, it is ideal to get the Better Business Bureau icon or the TRUST icon for legalizing the site and increasing the trust amongst the customers. It is needed that a clear security policy is formed and developed by the company that are available on the web pages and can be easily found by the customers online. This can also include informing the customers about the type of security policy used and the way to access it. Apart from this, a privacy policy can also be made to notify the reasons to customers for taking their e-mail ids etc. The seal of approval obtained from third parties can be displayed on the website as a proof of authencity (Qin, 2010).
References
Johnson, D. & Turner, C. (2010). International Business. UK: Routledge.
Kline, J. (2010). Ethics for International Business: Decision-Making in a Global Political Economy. UK: Routledge.
Kotabe, M. & Aulakh, P. S. (2002). Emerging Issues in International Business Research. US: Edward Elgar Pub.
Qin, Z. (2010). Introduction to E- commerce. US: Springer.
Schneider, G. (2010). Electronic Commerce. UK: Cengage Learning.
