Case Study – Business Planters (5 points each) Business Planters helps new busin
ID: 359086 • Letter: C
Question
Case Study – Business Planters (5 points each)
Business Planters helps new businesses get started. They plan, design, and implement e-commerce solutions. The systems analysts are expected to work together on e-commerce projects. To start, a knowledge base will be created about e-commerce issues and solutions.
Tasks
1.Consumers are projected to spend a lot on Internet purchases during the next three years. How much? Does the estimate you found online seem reasonable? Why or why not?
2.It can be difficult for new businesses to attract investment capital, and traditional lenders can be skeptical of new Web-based firms. Perform research to determine the mortality rate of new retail firms that use the Web as their primary marketing channel, and describe the results of your research.
3.Traditional brick and mortar companies are expanding their Internet marketing efforts. This makes it even harder for new online firms to compete. Research this topic and describe the results.
4.Finally, draft an e-commerce sales brochure for Business Planters. List all the services you will provide to your clients that wish to start a new business.
Explanation / Answer
1. As per emarketer, total retail eCommerce sales will reach $4 trillion by 2020. This represents a CAGR of 21% over the period 2015 to 2020. As a percentage of total retail sales, the retail ecommerce sales would grow from 10% in 2017 to 14.6% in 2020. This is a reasonable estimate as the actual figures of 2015, 2016 and 2017 are already known and emarketer has applied reasonable growth rates. This is also corroborated by the growth of online platforms like Amazon in the past few years.
2. As high as 74% of internet startups fail due to premature scaling. Almost 75% of internet startups that are funded by the venture capitalists are never able to show any returns to investors. A huge proportion of these startups are into online retailing. The handful of such companies that are able to scale properly grow about 20% faster than the rest. So the key is scaling up properly and having the right business plan as it is very easy to burn up all the investors' cash in this business.
3. Traditional brick and mortar companies like Walmart are expanding their internet marketing efforts to compete with digital natives like Amazon but there is a reverse trend too. Amazon and other digital natives are starting to create a physical presence for themselves. They are doing it to increase awareness and to draw customers into a store where the options are not infinite and where the choice is not controlled by a gatekeeper. The online marketplace is hyper-competitive with about 800,000 online stores available to people to choose from. I think only the big players will survive and a lot of consolidation will happen whether offline or online.
4. The following would be the services on offer:-
a) Powerful User Interface.
b) Multivendor Services.
c) Fast response to multiple requests.
d) Managed Shipping Preference.
e) Security
f) Advanced Serach and Managed Category with SEO.
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