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E Commerce Business Model OZ Assignments
This assignment is about making an ecommerce business plan for a small or medium sized organisation and later develop a website for same based on the business plan proposed. The company that I have chosen for my business is a furniture shop named ‘Tropic Furniture’(Slideshare.net, 2017). It is an Australian furniture based company that sells furniture and other stuffs to the customers. It aims at selling the furniture and other bedding products and has grown his business and has an effective presence in the marketplace. Now the company wants to develop a website to attract more number of customers and to increase their reachability worldwide. For this purpose this report will discuss the e-commerce business plan for Tropic Furniture.
Business and revenue model
The business model followed is business to consumers (B2C) i.e. the products are directly sell to customers and no middleman is involved.(Startup Freak, 2017)
The business model involves the conversion of a local shop into a virtual shop that exists online. The customers visit the website, order product there and purchase it. He either does the payment online or choose a cash on delivery option. Product is then shipped to the consumer’s address as mentioned.
Figure 1 E-Business model for Tropic Furniture
Several revenue models are available and it aims at selling large number of products by keeping customer loyalty and get the revenue generated from the same. For our furniture shop it is suggested to use transaction revenue model. We can use premium retailing model which is good for this small business as the major aim is to sell high quality products, gain customer loyalty, provide after sales service and repeat the customers.
Tropic Furniture is a furniture product retailer that sells its products in local market and wants to sell that at online space as well. The mission and objective of this company is to provide high quality products to their customers on best market price which is affordable to every class of customers.
Value preposition means to identify that who are your customers, what they need and how your customer will benefit from your products. Tropic Furniture aimsto build the brand recognition and provide curated and high quality furniture available on the affordable cost. It commits to provide best furniture designs at reasonable cost, high lifetime value and provide after services and customization of products if needed(Business Model Innovation, 2017). The ultimate goal is to keep their customers happy by resolving their issues both via offline and online channel and 24*7 availability for customer support through website. The company wants to monetize inventory and apply marketing strategies to attract more number of customers. It would also like to provide benefits to their business partners or associates by offering several offers to them.
Tropic Furniture was established in 1983 by two people John Smith and Steve Rose, a CEO and a president respectively.Both are 50 percent partners for the business. It is situated at 10 / 4A Bachell Avenue, Lidcombe, NSW 2141 and covers 230,000 square feet of manufacturing and office purpose facilities. It has a team of around 500 members to manage the daily operations. The organisation produced over 3500 units of finished product i.e. furniture and ships it to their customers all across the world. They have years of experience in manufacturing and selling the furniture products with the help of highly skilled team who are always motivated to produce better quality products. The team has always approaches the unique and modern tools to provide good results and keep intact with the competitive ever changing marketplace.
Tropical furniture are well known for providing fully furnished home décor furniture which is handcrafted and use special kind of pine wood that is very affordable. The targeted audience here are the youth or young generation families that have a decent income and one who believes that a beautiful furniture is the key to living the good lifestyle as it adds charms to your house, offices etc. Each piece of furniture is made up of pine that adds royalty to furniture.
Also it is aiming to target the online customers who has a good buying experience online as majorly customer do not trust the online furniture shop because they want to touch and feel the product before buying it. Firstly the type of users has been identified as per demographics, social preferences, age group and geographical region. As per demographics the audience for tropic furniture shop is not strict to a particular category and neither it is gender biased. And when it comes to plan for online buying and selling every category must be targeted. It is found that for offline store all the customers are Australians that lives near by the shop.
As per social preferences, it is found that customers are very much available on social platforms and their pattern is to look such online pages to shop.
Also furniture are mostly purchased during festivals and on special occasions so we can provide discount to them on such occasions and can increase number of customers.
A ballpark can be described as a rough estimate of some figures or a range of values that gives an idea about business System current state and from which future growth can be depicted. Tropic furniture has a strong customer base and relationship with their business partners. They have a financial plan with low expenses and sales forecast. It is slowly growing in terms of total cash and net worth. They are currently owning 50 stores in Australia. In June 2007, their growth has been declined but despite of that it recovers and grew more stores and get benefitted. This Tropic Furniture is expecting to grow at an annual growth rate of 10% to 1.6 thousand million AUD by 2026and current growth is 700million AUD.
The reason of this growth is due to involvement of online presence, increased number of online and smartphone users, people takes interest in improving home décor and increasing number of urban households.
To be able to stick in the competitive market, it is very necessary to analyse the current trends and your competitors. Even if you are well established retailer, you never know when things get changed because as they say, change is the only constant thing. To analyse your biggest competitors you have to do a thorough research for understanding their patterns they follow, strategy they used, price mechanism they have and what offers they provide to their customers which is similar of yours.The biggest direct competitors of Tropic Furniture are Fantastic FurnitureandLiving Styleand the indirect competitor isAlfresco Emporium.
Reason being, Fantastic Furniture and living style solely deals in wooden furniture just like tropic Furniture. The pricing scheme, product quality and discount offers are almost similar for both of them and hence they are hitting the same customers as of Tropic Furniture.(Fantasticfurniture.com.au, 2017)
Whereas Alfresco Emporium majorly deals in home décor products such as bathrobes, candles, jars, decorative items, gift items, bags, jewellery, books and furniture is one of its product categories.(Alfrescoemporium.com.au, 2017)
Figure 2 basis of analyzing competitors
From competitive point of view Tropic Furniture has several advantages over other similar furniture shops such as the store is situated in the middle of the city hence it is accessible to every customer who lives wherever.Another advantage is that the material which is used for tropic furniture is of affordable price that makes the overall cost very cheaper than other competitive furniture stores. The type of wood used in Tropic Furniture is pine and products made with pine are sell on lesser quantity. For example, A sofa set made up of pine cost $200 on the contrary the same sofa set will cost $600 if made up with oak wood. Hence customer will obviously go for those products which is of lesser quantity as comparison is an intrinsic character of every individual. The USP of Tropic Furniture is to use good quality product material that will last for generations and hence can always retain its position on marketplace.(Edward Lowe Foundation, 2017) (Small Business BC, 2017)
Strategies to generate traffic to your website:
In any business, one must have some good marketing strategies to consider in order to target the right customers. Some of these techniques are:
- You have to give customers some good deals and offers so that they get attracted towards your business
- Deliver best services so that your customers will do mouth publicity of your business
- Should have relevancy to the local environment
- Should have connectivity to online and offline both
- The business can introduce a mobile application as well for the business
- The website must possess a good rank on Google
(Retail Marketing Blog - Retail News, Trends, Store Tips, and More, 2017)
At last, this report come up with a conclusion that to move on an online platform, it is must to develop an e business plan first and follow that plan strictly. The retailer must aware of the risks associated with the e business and have to plan and prepare accordingly. All it need to do is to focus and implement the plan as per its targeted audience and to generate the revenues with company’s growth. This plan will definitely help in successful establishment of Tropic Furniture website.
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