Introduction to E-Business and E-Commerce Assignment Sample

Introduction

Every business is required to follow a particular business model. The model describes how organisation develop, deliver and generate value in the market. Besides that, model is a part of strategy which is developed (Abdollahi and Leimstoll, 2015).

In present times, due to covid 19 there are many businesses that has shifted their model from offline to online. Thus, e commerce is rapidly growing due to it. This has provided a platform for them to sell their products and services. As Ireland is a small nation so there are many e commerce businesses operating in food sector.

This report will describe about Chez Emily company and their business model. Also, it will be evaluated about model applied and at last recommendations are mentioned.

Outline of E-Commerce Business Model

Chez Emily was started in June 1996 by Ferdinand and Helena. They just made handmade chocolates. The business was named after their Daughter Emily. Slowly, business started expanding into other markets. Today, they are having a 2 retail stores in Ireland. The nature of business is determined from its model. The company specifies its model before entering into market. Also, on basis of products the nature of business model is identified. E Commerce is sector that is at high boom (Ballestar and Sainz, 2018). Almost all businesses are entering into this. It means selling products on internet.

Nature of e commerce company

In e commerce there are usually 3 types of nature of business that is B2B, B2C and C2C. It is important to identify the nature of business so that accordingly strategy is developed. Chez Emily nature is B2C that business to consumer.

In this the products are directly sold to consumer. There are different types of products sold like chocolates, hampers and others. The customer can either buy product online or they can visit store. In this there is no B2B or C2C concept involved in it.

Outline of current business model

It is important for a business to identify their business model so that they work according to it. In e commerce there are different types of models which exists (D’Andrea and Grifoni, 2016).http://Introduction to E-Business and E-Commerce Assignment Sample Each business falls into one model. Usually a model specifies how plans are developed to earn revenue. Moreover, it includes what products is sold, what expenses will be incurred, how value is created in market. Thus, Chez Emily current business model is manufacturing. In this they convert raw material into finished goods.

The raw materials in it are cocoa tree and its beans. So, in that the entire processing is done that is fermentation, drying, winnowing, grinding and other. Then, at last the chocolate is prepared. This model is highly traditional and many companies follow it. The company plant cacao trees and then do harvest them. There are various machines for processing of beans and converting them into chocolate.

Furthermore, there are 8 elements of business model that is included in it such as target market, value proposition, resources, and others. It is analysed by (Huang and Lee, 2019) from elements that in value proposition the model is fit as chocolate is vegan friendly and gluten free. Hence, it easily fulfils customer needs. In revenue element the Chez Emily makes money by selling its product in market. However, in market opportunity Ireland market is small and company size is small so this model is not effective.

Besides that, competitive environment is less competitive. So, it does not need to adopt this model and there are no so many competitors that operate in Ireland. The company enter into market by promoting their products. Besides, the organisational structure followed by them is hierarchical. The entire management team is handled and managed by owner of business. There are a lot of chocolatiers and other staff working with varied skills and background.

Evaluation of business model employed

It has been evaluated that current model employed by Chez Emily is manufacturing. Generally, this model is applied by huge organisations that are having their own production of raw materials. Also, it is used when there is large market where products are to be sold (Lee, 2018). http://Introduction to E-Business and E-Commerce Assignment SampleThe model is highly beneficial as it provides a high standard of quality of raw materials in Chez Emily. It will maintain quality of beans extracted from cacao tree.

Thus, chocolate quality is maintained in it. Furthermore, model reduces cost of delivery of raw materials. As raw material is produced by company itself so they do not have to incur on transportation. The manufacturing model also helps in short lead times. As raw materials are already available so lead time of processing into finished goods is less.

This allows in fulfilling market demand fast. Therefore, Chez Emily preparing chocolate time is less. Hence, the model employed by them is effective.

However, it is critiqued that by Mahadevan, (2018), that in present company this model is not highly effective. It is because the model consists of a long process in which from growing of cacao plants till making chocolate is done. Along with it, there is need to own a land where the cacao tree can be planted and its farming is done. It is because from that tree beans are required to produce chocolate.

Also, it requires particular conditions for that tree to grow that is 10-degree Celsius temperature, humid climate and a lot of water. Besides that, it is harvested only 2 times a year that is from November to January and May to July. Then, there are various stages through which beans goes through. This is a long process of fermentation, drying and many others. In Chez Emily this all process is followed where cacao trees are planted and then chocolate is made from it. So, as the company is small the model is not effective for it. There is a huge cost incurred on entire process and then preparing chocolates.

Furthermore, it is said by Patel and Agarwal, (2018), it requires company to hire experience people for that. The people who are working are known as Chocolatiers. They make chocolate from cacao beans and mixing other ingredients.

So, they have to pay more salary to them. Therefore, company have to find out and hire only those persons who are having relevant skills and abilities for this job role. In addition to it, there is need to machinery and advance equipment’s to prepare chocolate.

This adds to expenses of company as well. Alongside, in manufacturing business model there occurs a lot of waste of raw materials. So, it is also not suitable for Chez Emily. It requires to manage overall production process in efficient way so that market demand is met on time. If not, then it results in loss of company. Also, any defect in machine lead to interrupt the overall process.

As chocolate is product that needs to be consumed as early as possible. So, the nature of product is perishable thus it does not need to adopt manufacturing business model. Besides, the market of Ireland is small so company can easily buy cacao beans from another firm can then make chocolates.

It is stated by Yuan and Zhang, (2013), that business model employed has resulted in fixing price of chocolates high. It is because of high transportation and other cost. Due to it, there is decline in sales of firm and they are not able to expand in other markets. Moreover, there is lack of control on overall process as it requires high supervision for it.

The quality of raw materials is sometimes gets degraded as they get damaged. This is because it is found that there is need to roast, winnow and grind beans properly so that its taste and quality is not affected. But in Chez Emily there is no proper control on this. Hence, it has resulted in not fulfilling the market demand in time. Alongside, during the entire process it requires to effectively take care of cocoa plants.

It is evaluated that 8 elements of business model are applied into it. In value proposition there is no value generated from preparing chocolates from cacao tree. There are many other companies as well who are producing gluten free and vegan chocolate. Besides, there is no such revenue model adopted to make money. Hence, manufacturing business model employed is not proper. Apart from it, Chez Emily only serve Ireland market that is small. There are no such large companies operating in that nation.

Hence, company is having vast opportunity in market. They have attracted a large number of customers. It is also found that there is stiff competitive environment as there are many companies offering variety of chocolates to people. The companies are Chocolate Garden, The Truffle Fairy and others. So, product offered by them is cheap and better quality than Chez Emily. Thus, this model is not suitable for company.

They are not able to gain competitive advantage in market (Wu, 2015).http://Introduction to E-Business and E-Commerce Assignment Sample The key competitors are Hazel mountain chocolate, bean and goose, Wilde Irish chocolate. They all offer superior and finest quality chocolates. Due to that, these companies are able to gain large market share of Ireland and competitive advantage as well.

In market strategy Chez Emily is not having any plan to enter into market. So, on basis of it there is no use of manufacturing business model employed in it. Alongside, management team of company is not according to business model. Generally, in manufacturing model flat hierarchy is followed. But in company hierarchical structure is adopted.

Also, team is not so strong as of Chocolate Garden and The Truffle Fairy. So, it is stated that business model employed is improper and there are a lot of rivals are already operating in Ireland. They provide high quality products to people. As Ireland is a small nation so there are many e commerce businesses operating in food sector.

Recommendation

It is essential that Chez Emily should adopt new business model in e commerce so that they are able to grow and expand. It will enable in developing new plan and strategy.

• Thus, they can adopt bundling model. It will enable in selling two or more products at low price. Besides, through this model business will be able to generate more profits.

  Moreover, it will allow to attract more customers as well.

• However, as Chez Emily sells variety of chocolates so this model will be useful to combine two or more than two varieties of chocolates into one pack and then selling it. Apart from it, the model is less costly to be applied. And it is not time consuming as well. Also, it is easily understood and can be applied in various other products as well.
• Besides that, as business nature is B2C so bundling model is usually used in this type. It can be highly successful as well if company do more promotion and advertising. Thus, they can use social media sites for marketing. It will allow in creating awareness in the market and attracting more customers. Hence, sales will increase that led to rise in revenue.
• The company can also give offers and discounts on their products to attract customers in the market. It will be helpful in increasing sales. They can provide samples of chocolate to customers as well.

Conclusion

It can be concluded that Chez Emily nature of e commerce is B2C. They are currently following business model of manufacturing in which raw material is converted into finished product. The cocoa tree and its beans is finished into chocolates.

Also, model is beneficial as it reduces cost of delivery of raw materials, so lead time of processing into finished goods is less. But there is huge cost incurred on entire process as it is time consuming and machinery and equipment’s is needed as well. They should follow bundling model where they can sell two or more products at low price. Besides, it will enable to generate more profit.

References

Books and journals

Abdollahi, G. and Leimstoll, U., (2015). A classification for business model types in e-commerce.

Ballestar, M.T. and Sainz, J., (2018). Customer segmentation in e-commerce: Applications to the cashback business model. Journal of Business Research, 88, pp.407-414.

D’Andrea, A. and Grifoni, P., (2016). The E-commerce business model implementation. In Encyclopedia of business analytics and optimization (pp. 2509-2520). IGI Global.

Huang, T.C. and Lee, K.H., (2019). Innovative e‐commerce model for food tourism products. International Journal of Tourism Research, 11(6), pp.595-600.

Lee, C.S., (2018). An analytical framework for evaluating e‐commerce business models and strategies. Internet Research.

Mahadevan, B., (2018). Business models for Internet-based e-commerce: An anatomy. California management review, 42(4), pp.55-69.

Patel, D. and Agarwal, R., (2018). E-Commerce Business Model. In Improving E-Commerce Web Applications Through Business Intelligence Techniques (pp. 110-129). IGI Global.

Wu, Y.C.J., (2015). Unlocking the value of business model patents in e‐commerce. Journal of Enterprise Information Management.

Yuan, Y. and Zhang, J.J., (2013). Towards an appropriate business model for e-commerce. International journal of mobile communications, 1(1-2), pp.35-56.