Impact of Historical and Emerging Trends Relating to the E-commerce

Question 1: Advise GOGAL Designs on their options for building their online business in-house with existing staff or outsourcing the entire operation. Outline for them which strategy you believe is in the companys best interest; explain why you chose that approach; and outline the estimated associated costs, compared with the alternative. Answer 1: It has been observed that GOGAL has been majorly used in clothing business. Till date, GOGAL does not have any knowledge or experience regarding the software programs and development. However, if GOGAL seeks to launch a website, it will require hiring knowledgeable and experienced software developers, programmers, software engineers and web developers from the market. According to Laudon (2014), it is crucial to appoint workforce with sound knowledge and experience for launching a new E-commerce website. Recruiting efficient and experienced software developers for meeting the previously stated requirements would lead to high cost of hiring. Additionally, the organization will require setting up the essential infrastructure in terms of asset, tools and software in order to develop an e-commerce website. It has been found that GOGAL does not have a background of developing software. Hence, it will need to take assistance from an external consultant in order to ensure appropriate setting up of the needed infrastructure. Therefore, once the e-commerce website has been developed and launched, the company needs to focus on appointing software engineers in order to maintain the entire system. The company needs to develop a customer support team and the responsibility of the team is to answer the queries raised by the clients. In the following table, the approximate cost for launching an e-commerce website for GOGAL is presented: Work Estimated cost Setting up of Infrastructure 20000 licensing of tools and software 6000 customer support team and website developers 5000 Testers and Developers 30000 cost of Maintenance 3000 monthly other costs 7000 Analyzing the above table, the total cost developing the e-commerce site for the GOGAL has been found. The total fixed cost of GOGAL is $ 26,000. It has been found that the monthly cost associated with salary as well as other cost will be summed up to approximately $ 12,000. It is evident when the e-commerce site of GOGAL will begin to function, then the company can discharge the web developers. Later, the company will be capable of hiring website developers on contract basis. Once the e-commerce site is developed, the contract with the web developers will be ended. On the other hand, if the company identifies the need for addition of new features in the e-commerce site of GOGAL in future, it will have to recruit new web developers for satisfying those needs (Tkacz, 2009). GOGAL has the potential for outsourcing its work to some external experts. It will help the company to avoid the issues regarding recruitment of personnel. In this case, the company needs to float a tender for obtaining requests and proposals from some other organizations which will be helpful in dealing with the development of e-commerce website. The estimated cost of outsourcing is presented in the following table: Work Cost ( Australian Dollar ) Testing and development of website 40000 Cost of Maintenance and Customer Support ( Annually) 50000 It can be clearly implied from the above discussion that, in case of GOGAL, outsourcing of the development of e-commerce website will be the most suitable option. The major advantage of outsourcing will be whenever, the company will require any changes in the website, it will be added to the site by providing the requirements to the company and paying the cost for it, Presently, there are several organizations that has outsourced the website development for e-commerce as it provides organized service at less cost as well as effort. Additionally, it enables the organization to manage their e-commerce website whenever they feel that they are ready for it. Question 2: During the early days of e-commerce, first mover advantage was touted as one way to success. On the other hand, some suggest that being a market follower can yield rewards as well. Answer 2: It has been found that, most of the time, the first mover in the market gets a benefit in terms of being fresh as well as ground breaking. If technology is accepted, it promises success. However, the acceptance of technology is reliant upon various factors. The factors include: availability of the technology, level of complexity, user friendliness and some other factors. Selling of books online was ideated by Amazon. The core model of Amazon focused on ensuring that the clients can locate the books of their preference as well as they can place the order instantly. From that time, Amazon had become the market leader in order to sell via online platform. Being the first mover, Amazon has capitalized huge benefits in offering wide range of books online. The model of Amazon has been adopted by other organization for selling their goods and service through an online platform. With the increase in competition, Amazon had focused on gaining greater market share. In order to become market le ader in terms of market share, Amazon has started to differentiate its product and service through the e-commerce site. eBay is a strong competitor in e-commerce and it has been giving tough fight to Amazon. Amazon has been encountering major competition from eBay in terms of offering electronic goods. Although Amazon still has many copyrights and patents, other companies have already discovered a way out and have been thriving by copying the idea of Amazon of online selling and have taken it to an entirely different level. Presently, the organizations are not only selling the goods, but also offering huge range of services such as financial, travel and tourism, consulting etc ( Gali, 2011). For example, Make my Trip is one of the most popular e-commerce sites for travelling and it has been offering wide range of travel and tour packages, ticket, hotel booking services etc. On the basis of the demand of the target group of clients, various travel companies are establishing business association with hotels and airlines. Various retail giants are also shifting to the virtual stores as they are losing market share. Hence, it can be observed that the first mover always gets significant benefit in the market. However, it must be noted that the followers also develop effective strategies leading to extensive competitive market. Followers get an opportunity to learn from the mistakes of others and therefore, develop their own business model which is effective. Hence, it can be stated that GOGAL need not be worried about the advantages of first mover. It need to focus on the developing an e-commerce site which will attract the target audience by offering wide range of products. GOGAL must consider that the various organizations are selling garments online. GOGAL need to undertake research on the companies for finding out their strategy and success factors. GOGAL should try to take as much points from its competitive companies as possible and they try to put all the positive points in its own strategy and thus grow. Reference : Gail, F., 2011. Globalization, Communication and the Workplace: Talking across the World. New York: Continuum. Laudon, K., 2014.E-commerce. business. technology. society. Pearson. Tkacz, E., 2009.Internet Technical Development and Applications. Springer.