In theory and practice, the e-commerce operations plan of the New Motor Company is based on the people, products and profits model. The founders of the company ensured that the company could achieve competitive advantage by starting an e-commerce company based on a combination of B2B and B2C e-commerce business models. (1) The New Motor Company’s developed an operations business model consisting of offering new and used motor vehicles, spare parts and other engine components of different motor vehicle models.
The web-website has inbuilt features that enable the company’s operations manager to add/delete products, control the provision of spare parts, assess the status of the existing stock, and find the products that are out of stock to be replenished. (2, 3) The main suppliers of new vehicles include Nissan, Toyota, and Ford companies and used motor vehicles are sourced from the local market and other international markets depending on the price, quality, and other compliance specifications. The operations plan consists of:
A company web based e-commerce website that supports both the business-to-customers and business-to-business functions.
- A logistics and supply chain management information system
- A secure financial management system that enables financial transactions to be done on the website.
- The company offers 24/7 support services to the clients
- Customer representatives who can be called or engaged to answer customer questions.
- Product pricing policies that enables customers to check product prices on-line by clicking on the image of the product they are interested in.
- An inventory management system that allows products to be added and removed on a regular basis using an integrated inventory management module.
Products and services to market
The main products are new and second-hand motor vehicles, motor vehicle spare parts, engines, gear boxes, differential units, and other accessories that can be used for the maintenance of the vehicles. In addition, other services are offered on the Internet and at designated points if the problem to be addressed requires specialised personnel such as mechanics to troubleshoot and solve. (5) After sales services are provided to those who purchase the new vehicle and after sales services are part of the guarantee that lasts for only one year.
The e-commerce website provides the New Motor Company with a strong on-line presence and enables customers to evaluate different models of vehicles and compare their prices with other companies’ price offering of similar products.
Once a customer has bought a vehicle and confirmed payment, the vehicle is immediately shipped to the customer and it takes 14 days from the shipment date to reach the customer. The company has a strong global presence on the Internet and the services and products can be can be accessed through its website. Some of the models sold by the company are shown below.
Website features
The company’s website was designed in a way that allows customers to navigate and access different details of product information. The product information consists of the names of the vehicles, vehicle specifications, spare parts, engine capacity, and other accessories that are available for sale.
The product title is characterised by a short descriptive title that is less than 100 characters, the vehicle’s specifications, the cost or price of each vehicle, the name of the model, colors, and the model number. The images of the vehicles are carefully chosen and each image provides a link to the detailed description of the vehicle including the price, engine specifications, year of manufacture, and place of manufacture. (1, 6)
Payment methods- This feature provides a link to the on-line secure payment system. The company uses the ACH payment method, which provides an electronic platform for conducting debit and credit transfers.
The payment method is linked to the merchant account, which enables them to conduct electronic transactions on the on-line platform. The company’s business payment plan allows transactions of more than 500 Euros because it enables the users and the company to ensure flexibility, consumer protection, enhanced security, and real time access to the financial services provided on the e-payment platform.
Guarantees-Once one clicks on the guarantee button, a pop up message is generated showing the detailed risks of using an on-line payment platform. Payments made in the Internet are vulnerable to serious financial risks such as fraud. However, when conducting an on-line transaction, a contractual promise is entered upon between the customers and the third party to make the transactions valid.
Therefore, by enforcing the guarantee, the company’s policies can be adhered to ensure indemnity, which guarantee the terms of payment stated in the policies are valid. In addition, all parties involved in the transaction must be satisfied when the transaction occurs and each party should take responsibility of ensuring that the financial transactions between the involved parties are valid.
A payment method with tax calculator-A tax calculator is used to determine the tax payable and that depends on the laws of taxation of the designate country.
Policies-The website has a feature that provides detailed description of the rules on how to make payment for the purchase of the company’s products. One is required to make payments only and only if the transactions are validated. Any detection of fraud leads to the cancellation of a transaction and the principal will incur any losses arising thereof.
Once a person clicks on one of the images, a full image of the vehicle is generated and one can have a complete view of the image as shown below.
Security –A payment gateway based on the payment card industry regulations could provide a secure platform for secure electronic financial transactions between the merchant and the customers. Typically, “the PCI DSS standard was created by the Payment Card Industry Security Standards Council to increase security of cardholder data and to reduce fraud”.
To ensure secure e-payment options enforced, the payment platform provides encryption services that are instantiated once the customer starts the payment process. All transactions are encrypted once they are entered into the web browser reliability and non-repudiation of the transaction. The e-payment system the company uses are secure, private, competitively priced, and use an intuitive interface.
Disclaimer –The Company will not accept liability in case the transactions are not validated before they are committed.
About us-The website has a feature that direct a customer to the web page consisting of details about the company details, what the company specializes in, the physical location of the company, and any other detail that is necessary for the customer to be aware of the company.
Typically, the company deals in the buying and selling if new and used cars and is a partnership between different shareholders interested in the motor vehicle business industry. In addition, the company sells motor vehicle spare parts such as engines, propeller shafts, differential units, gearboxes, and any other part that a customer can order subject to the availability of the stock.
Contact us-The customer can use the phone number or postal address to contact the company representatives any time and from anywhere on the globe. In addition, a customer can engage the company representatives in real time to ask questions and receive answers on the chart platform.
Website map-Provides means to discover other websites and web pages through internal linking with dynamic content. Some of the pages cannot be easily discovered using the web browsers and links provide access to the websites.
Why buy from us-This feature provides the reasons why customers should buy products from the company. Some of the reasons that provide competitive advantage for the company include:
- Better prices
- Guarantee deals
- Genuine offers
- After sales services
- Company is register in the government registers
- Tax compliance
Market intelligence reports show that many companies operate in the buying and selling of motor vehicles making a high business rivalry to be possible. However, the main competitors include Franko’s Auto Place that offers new motor vehicles from France, UK, South Africa and Japan only, limiting the availability of Japanese made reused vehicles.
The other competitors are well established around the city of Vancouver who embraces the brick and motor buying and selling strategies. In addition, 75% of the market belongs to those competitors with a low on-line presence but a strong market presence. (1)
However, the New Motor Company’s head office is located at the northern end of the Vancouver city that has a high volume of traffic flow and resting areas where people can easily access the company and view the models on offer besides accessing them on the Internet.
How the website operates
It is possible to see from the interface shown below how the website operates. Typically, once the customer has logged into the website, they see the navigational links that lead them to the web page they want to access. The website provides links for selling and for buying new and used motor vehicles. One can also search for a vehicle of their choice among several vehicles on the website by clicking on the research link.
How it differentiates from competitors
The website was designed with unique features to differentiate the company from competitors dealing in the same products and services. The uniqueness with the company’s website is that it provides links to competitor products that enables the customer to compare the quality attributes of the company’s products with the competitor products. In addition, the company provides links to those vehicles which have been sold to different destinations in the world and other valid transactions to inspire confidence in the customers.
In addition, the company’s directors and registration details are provided on the website to inspire further confidence in the customers because of the risks involved in the business. The company provides different products at different prices for different customers depending on the following factors.
Market segment-Different people have different tastes, preferences, and income levels. Different vehicles are hosted on the website targeting different people with different demographic profiles. For instance, the youth prefer elegant vehicles that are sporty in nature, while middle aged people prefer those models that impress their presence, and older people require those models that not only impress a sense of dignity, but a status in society. The results were based on market intelligence reports showing the demographic profiles of the customers.
- Students focus on those vehicles that are economical, cool, and cheaper.
- Used cars are sold on an implementation strategy that is based on the development of a strong buying experience, becoming a leader in user satisfaction, and employing a strategy that treats customers as a community.
Financial plan
Statement of financial assumptions
The financial growth strategy was targeting a growth plan to improve the company’s financial status from moderate to good. It was also assumed that the marketing budget could remain below 15% of the net profits to ensure that money is available to allow the company makes further investments of the residual profits.
The general assumptions are tabulated below (5)
Statement of financial assumptions
In addition, the following assumptions were made:
Startup costs-No over payments were made to start the business because it cannot work if over payment is done. Typically, the startup costs, acquisition price, and operating losses when starting the business were kept as low as possible.
Revenue projection-The company executives conducted a revenue projection to avoid working with overestimates. One strategy was to compare the revenue generated by other companies doing similar business in the same industry using focus groups, surveys and market intelligence reports. Revenue projection was kept as low as possible to ensure the figures were kept as realistic as possible.
Operating costs-To cover the cost of each item, every cost was estimated including rental, advertising, employee, fixed costs, variable costs, and other costs that arise because of contingencies not planned for.
Borrowing-In theory and practice, organizations borrow money to run their business operations, which is returned at a fee. The company executives held meetings with the stakeholders and lending institutions to determine the lending guidelines and how much the company could borrow from them.
Equity returns-The amount of money invested was dependent on contributions from financial lending institutions and shareholders. The shareholders had 80% equity and lending institutions provided the rest of the balance.
The cash flow statement
Subtotal Cash Received
$2,668,200 $2,750,200 $3,027,000
The above table shows the Subtotal Cash Operations statement of the company in successive three years.
Break even analysis-As shown in the graph, it is used to identify the sales needed to cover fixed and variable expenses.
Statement oof variables (2)
The other issues such as contingencies, legal expenses, traveling costs, and advertising costs were also assumptions factored in improving the financial operations of the company.
Break even analysis (4)
Cash flow (1)
The above statement provides the net cash flow and cash balance as per the transactions that occur within the company.
The statement of the sources and use of funds on how to secure capital and how to spend it is shown below.
Statement of sources (3)
Ownership of the e-business
Expected return on the business
The business ration analysis provides the expected return on the business as shown on the following statement.
Returns statement (1)
Issues analysis
Several issues such as pertinent opportunities that arise because of the customers’ tastes were addressed by providing each market segment with the most appropriate vehicle that fits into the target market’s demographic profiles.
Other issues such as threats that arise because of competition from rival firms were addressed by using market intelligence reports to monitor the products that competitors were offering so that the company provides substitute products that could counter the new threats. However, some of the product offerings that target middle and low income customers were paying off because most of the customers had interests in buying medium priced vehicles.
Risk analysis-Identify threats and opportunities that the company will face (Include economic, market, and environmental considerations).
Risk analysis (3)
Strength of the business environment
An investigation of the motor vehicle business environment showed robust growth rates and high income levels that drive consumption. In addition, the decline in the cost of gas has stimulated demand for vehicles that has created a new market front.
The company’s website has features that enable customers to ensure effective implementation of the e-business model. The main features that enable the effective implementation of the business model include:
- Good customer focused navigation capabilities
- On-line support and real time charting to answer customer questions in real time
- Call line available that directs customers who want to talk with the management
- Secure on-line payment system by use of encryption technologies to ensure transactions between the parties are valid.
- Ability to negotiate product prices on-line
- Presence of the website on the Internet
- Shopping cat with tax calculations
- Product information can be accessed on the Internet
- A good website map that enables the customer to navigate the entire website
- Legal information-The feature leads the customers to the section of the page that has terms and conditions of services and other legal information requirements.
References
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