Dixons Retail Group e-commerce Assignment Example | Topics and Well Written Essays - 4250 words

Dixons Retail Group e-commerce - Assignment Example III. Market Profitability This is largely determined by the five forces identified by Porter (2008) as: power of buyers, power of suppliers, threat of new entrants, threat of substitutes and competitor rivalry. These are looked at in detail in the micro-environment section below. However, market profitability is low here because of intense competitor rivalry, strong buyers, high threat of substitutes and moderate threat of entry. IV. Industry Cost Structure According to Goldmanis et al. (2009) the introduction of e-commerce into an industry results in the shrinking and sometimes exit of high-cost firms and a shift in market share to low-cost firms, and with some additional assumptions about the firm type and consumer search cost distributions, a drop in the number of producers as well. Of the ten cost drivers related to value chain activities identified by (Porter, 1998) Primark derives its cost advantage largely from four: its vertical integration, economies of scale from the Gr oup, capacity utilisation and learning. V. Distribution Channel Dixons.co.uk leverages the centralised supply chain and distribution network of the Group’s physical stores. At Newark the company operates one of Europe’s largest distribution centres. Another Regional Distribution Centre (RDC) is located at Bristol to supply goods to all South/South west UK branches of Dixons Retail Group (Dixons Retail, 2011). Using the Group’s warehouse makes dixons.co.uk cost to serve relatively low (Chiles & Dau, 2005). VI. Market Trends Online retail industry is still largely in a state of flux due a range of factors. Firstly, the technology platform on which online retailing is based is still undergoing rapid change such as 3D virtual... According to the research findings as an e-commerce website, dixons.co.uk inherently faces three types of risks: security of customer data, consistency in order-fulfilment and accuracy in inventory management. Security risk arises because the company will have to store various forms of customer data such as contacts, purchasing habits and credit card records. The company will therefore have to invest in staff security awareness training and security technologies. With regards to order fulfilment, dixons.co.uk must ensure that it has the right processes in place that guarantees the customer receives what she ordered for in the right state, at the right location and at the right time. An effective and efficient order fulfilment process will save the company time and resources spent in handling returns and complaints. Finally, inventory management is important because it supports distribution and order fulfilment. However, the risk to be highlighted here is the synchronisation between t he items advertised on the website and the actual items available in the company’s warehouses. Consumer confidence can easily be lost in instances where customers order for a product that is no longer available at the company’s warehouse yet it is displayed on the website.A critical look at the above risks informs us that security of customer data, consistency in order-fulfilment and accuracy in inventory management are market qualifying factors in e-commerce. Hill’s methodology on marketing strategy define qualifying factors as those factors that a business must fulfil in order to be considered for business by customers.