Creating An Internet Presence

Having studied the Internet business of several companies, we can start to make recommendations and draw conclusions about what should be included in a strategic business plan for an organisation seeking an Internet presence and increasing its market sector.

The companies that have been reviewed fall into certain categories, these are based on the other activities of the organisations and the business model that is required for that business to succeed.

It may become obvious that there is no one general strategic business plan for the Internet but it depends on the organisation background and operating marketplace. A successful strategic business plan for a Internet company in the travel industry will not necessarily work in the online book trade.

The companies that have been reviewed are; Amazon, Dell, Lastminute.com and Tesco, the one thing that they have all got in common is that they are generally described as successful Internet companies, so it is hoped that there is a common theme running through their strategies.

There are other companies in the Internet world that may be due consideration, the most successful Internet company could be considered to be Google. It is really is quite simple - Google is the world’s best Internet search engine.

From its birth in 1998 it now handles approximately 40% of the world’s Internet searches and is able to deliver the results to its users in an astonishing 0.3 seconds.

The statistics about the company are astonishing. It has a user base of around 65 million people who use it 150 million times a day to search through the 3 Billion Web pages that reside on its 10,000 servers.

The story of the company is a ‘must read’ for all of those who believe the age of the high tech success story are over. The company has spent virtually no money on advertising, yet Interbrand’s BrandChannel.com voted it the brand of year, displacing last year’s winner, Apple and beating Coke and Starbucks.

According to research from the branding consultancy Brand Keys, Google has the highest brand loyalty of any online company. To achieve its premier position it had to displace Yahoo!, a company that was thought to have an impregnable lead as the market’s top search facility. It has done all of this in a viscously anti-technology environment whilst creating a company estimated to be worth around $1 Billion.

There are many reasons why Google has achieved its success these include;

There examples of all these in the strategies of the other companies and it would seem that these features are necessary for a successful Internet business. To this list I would include, coming from the Tesco example, frugality and keeping a very keen eye on the financial side of the business.

Keep things very, very simple.By trying to complicate things companies are trying to make things very difficult for themselves. The basic factors needed for an e-commerce website is a website. Anything extra can either add to the functionality or subtract from it.An e-commerce website has to follow design rules of the Internet.

If the user interface is ugly, confusing, crowded or difficult to predict then the e-commerce website will be underused no matter how good the merchandise is. This can be seen in the website Boo.com, which was a first to market clothes retailer with a lot of flash technology and a bells and whistles interface, but the website failed and Boo.com disappeared.

This was because the company invested too much into its website and did not concentrate enough on anything else. The design principles that should be adhered to are these that are pointed out by Jakob Nielsen. He produces a yearly list of what companies are doing wrong on their website and causing users to turn off. It includes such mistakes as:

No Prices

No B2C ecommerce site would make this mistake, but it's rife in B2B, where most "enterprise solutions" are presented so that you can't tell whether they are suited for 100 people or 100,000 people.

Price is the most specific piece of info customers use to understand the nature of an offering, and not providing it makes people feel lost and reduces their understanding of a product line. We have miles of videotape of users asking "Where's the price?" while tearing their hair out.

Even B2C sites often make the associated mistake of forgetting prices in product lists, such as category pages or search results. Knowing the price is key in both situations; it lets users differentiate among products and click through to the most relevant ones.

Infrequently Asked Questions in FAQ

Too many websites have FAQs that list questions the company wished users would ask. No good. FAQs have a simplistic information design that does not scale well. They must be reserved for frequently asked questions, since that's the only thing that makes a FAQ a useful website feature. Infrequently asked questions undermine users' trust in the website and damage their understanding of its navigation.

Collecting Email Addresses Without a Privacy Policy

Users are getting very protective of their inboxes. Every time a website asks for an email address, users react negatively in user testing.

Don't assume that people will sign up for a newsletter just because it's free. You have to tell them, right there, what they will get and how frequently it will hit their mailboxes. Also, you must provide an explicit privacy statement or an opt-in checkbox right next to the entry field.

Otherwise, you have little hope of collecting email addresses other than mickey@mouse.com.

Inflexible Search Engines

Overly literal search engines reduce usability in that they're unable to handle typos, plurals, hyphens, and other variants of the query terms. Such search engines are particularly difficult for elderly users, but they hurt everybody.

A related problem is when search engines prioritize results purely on the basis of how many query terms they contain, rather than on each document’s importance. Much better if your search engine calls out "best bets" at the top of the list -- especially for important queries, such as the names of your products.

The Google home page contains 32 items of text, including all of the navigation. I gave up counting the words on Yahoo! when I passed 600.

This is a very simplistic comparison but it does illustrate the point that Google is obsessive about providing a highly efficient search facility and discards anything that might distract or confuse its users.

When Yahoo! was launched it had a format that was remarkably similar to Google. Its site contained just 150 words and did nothing else other than assist users to find information on the Web. Since then the site has expanded, lost focus and its supremacy.

There seems to be a universal law of nature that says ‘Web sites continue to expand their functionality until they become unusable’. Just because it is so easy to provide additional functionality does not mean it should be added. The next time there is a suggestion to add more to your organisation’s home page, remember that handful of words on the Google home page and the success they have generated!

What the Google homepage does have is a very quick loading time, this is what users want, they do not have time to wait for fancy graphics to load. Simplicity was the method introduced by Tesco, who then went on to become the most successful Internet retailer in the world.

This can also be seen in Amazon where they have patented the one-click process, where users are meant to be able to buy whatever they are looking in, by only having to click on the mouse once in the whole process.

Unless you innovate, you die

Even though the websites are trying to keep it simple, they will still have to be innovative, in all aspects of their website otherwise they will fade away. Companies all have to look to be competitive in their industry, looking to drive forward to increase productivity.

The model by Michael Porter, the 5 forces model will allow companies to judge what they have to do to keep driving on in the industry in which they operate. Microsoft is an example of a company that wants to keep driving on. The thing that keeps driving Microsoft forward is paranoia that somewhere there is a Bill Gates Version 2 working on technologies that could threaten his empire. Google’s management seem to be driven by this same fear.

An analysis of Microsoft using Michael Porter's five forces would suggest the world's largest software company remains powerfully positioned. Buyers' bargaining power is weak; suppliers - in the form of software engineers - are plentiful; the danger of substitution is minimal; the barriers to entry for potential new entrants are pretty much is surmountable; and industry competition is subdued.

If there is any threat to Bill Gates's empire it is not industrial, but regulatory. Microsoft may have parried the regulators' main thrust in Washington, but in Brussels the jousting has just begun. It would be tempting for investors to dismiss Mario Monti's investigations as irrelevant, but that would be erroneous. A number of world-class US groups that should have known better, including Boeing and General Electric, have underestimated Brussels' power. The processes may appear opaque and the conclusions at times capricious, but the Commission's ability to wreak damage is real.

Microsoft has finally woken up to the European threat. It can point out that many of its rivals' complaints have been dismissed by the US court as self-serving. The court also concluded that their proposals to remedy Microsoft's anti-competitive behaviour were unlikely to increase competition. In Europe, such arguments could also prove compelling. Nonetheless, the Commission's ability to come up with a surprising and damaging remedy needs to be priced into the stock. Investors ignore Brussels at their peril.

To protect against this threat most companies expand their product/service portfolio to spread the risk over a range of products. What is too often associated with this strategy is the accompanying diffusion of marketing focus as resources and marketing energy is spread over a wider range of products.

Google, Amazon, Lastminute.com have all launched many different products since they formed. Google has moved form a search engine to include, Froogle, a service to find information about products for sale online by locating stores and directing you to the place where you can make a purchase. Google News, a service to access over 4000 continuously updated news sources.

Amazon has expanded its selection, from books, to all other forms of media, clothes and toys. While Lastminute.com has moved from a cheap flight reseller, to have information about events and entertainment, moving past the travel experience to what people can do once they actually arrive.

All of these companies have also brought up other companies to increase their product line and expansion plans. Amazon brought Bookpages in the UK, to form its British outlet Amazon.co.uk

Know what your customer wants and give it to them

This is always key no mater what business segment you operate, you have to know what your customer wants and give it to them. A customer may not tell their friends if they receive good customer service, but it can be guaranteed that they will tell all their friends if they received bad customer service.

Amazon will let their customers know, via email, how their order is progressing, they will let the user know when their item is dispatched, when it should be delivered and when it is delivered.

Amazon also give their customers a dispatch order number so they can track its movement within the mail system, If there is a problem the customers will be informed all they way. At the company Dard Cards, which delivers virtual cards, if there is a complaint. The staff will contact the customer to offer their personal apology and see if there is anything that they can do to remedy the matter. This personal touch will impress the customers, who will still return to the site even though they discover a problem.

Get others to promote your brand

It is very likely that your PC/Notebook has a little label attached saying ‘Intel Inside’. It was a very clever marketing ploy by Intel to get its customers to promote its brand on every box they sold. The reason this was possible was the mutual advantage for Dell, IBM, HP and the other vendors to associate themselves with the technical excellence of Intel.

Google appears to be following a similar route. More and more sites are using Google as their search mechanism and advertising the fact they are doing so. The ‘Powered by Google’ icon is set to become a common sight. During the past 2 months both Amazon and Disney have adopted the company’s search facilities.

Amazon have a authorised reseller and associate program which lets people sell goods using the Amazon name. The power of brand names is very powerful in this corcumstance.

Don’t take yourself too seriously

On March 6 the Google logo had changed into a stone sculpture with the letter ‘L’ being replaced by the Michelangelo’s Statue of David in celebration of sculptor’s birthday. On the October 25 the logo appeared as an expressionist painting to celebrate Picasso’s birthday. On Valentine’s Day it had changed again with the two ‘Os’ being placed with interlocking hearts.

You cannot help but smile when you see the latest variant of the Google logo. The continual adaptation of the logo may seem a minor ploy but I think it perfectly illustrates how an ultra sophisticated service and company can still be fun. From the perspective of logo design and extension it is sheer brilliance.

Frugality and watch the money

Many web companies came into the arena and spend a lot of money, splashing out on many things that they do not need, expensive website, expensive offices, staff, technology and stock. This has somewhat changed since the e-commerce world collapsed and it was realised that not everyone was going to make money from the Internet. Although this has changed it is important that businesses watch how tey spend their money.

It was obvious that Tesco had the financial clout to be able to spend a lot of money on it e-commerce operation, they decided to go the other way and watched what they spent. They kept down their initial costs and since then have grown considerably. At no point did Tesco see any point in over spending in their operation and let it grow with the resources that it had.

With a careful business plan, Tesco was able to become the highest selling online retailer in the world, and have been licensed to sell their online storefront to companies in the US. If a company comes in and starts to go heavily in debt then they will always be in a losing position. This is one of the reasons quoted why Amazon will never be a success as they have a lot of debt that has mounted up since they started operating and was the reason why Tesco’s rivals fell to the way side, as documented in earlier chapters.

These factors when considered should all help to forma successful business in the Internet world. There are other factors that will have an affect on how well a company will do in the coming years, such as the business model they choose, such as Tesco going for the picking model and Amazon the warehouse model.

Although they use two models that would not work in the one industry, they seem to work in their respective industries, there is a bigger matter that will decide e-commerce survival. Although these new companies have stolen a march on the big high street players, this advantage could be coming to an end.

The advantage of being first to market has gone, the big Internet firms that are around will become a dying breed, as there will be no place for them to enter the market. The brand name will be all important in hyperspace, the companies that have an offline presence will be the companies to prosper.

They have the finance from the high street brand to back up their spending on their online operation, they already have the stock when they start trading online and somewhere to store that stock. The high street brands will not have to use an expensive marketing campaign, as they will receive free advertising in their offline owner.

Freeserve is the largest free ISP in the UK, and was packaged with all PC’s sold at Dixons, Currys and PC World. This was achieved for the cost of producing a CD-ROM, as Dixons is the owner of all these companies. Another company would have had to pay a lot of marketing fees to be able to achieve that coverage, it just would not be possible.

High street brands are also trusted by all of their customers both online and offline as they know, roughly speaking that their credit details will be safe and tat their goods will be delivered without too much hassle or worry. If there is a problem with a product for an online solely company, the customer will have to spend a very long time on phoning customer services trying to resolve the problem. Whereas with a high street brand it is possible to take it to the shop and talk face to face to a human advisor and be able to resolve the problem straight away.

Many of these companies are global phenomena, with Amazon having a presence in Canada, Germany, France, Japan and the UK. This is why one of the best moves for a company to contemplate moving into the UK from the USA. This is because of the common language and culture between the UK and the USA.

The English language is the most widely spoken language on the Internet, but the gap is closed with Chinese and Japanese combined to make a nearly equal amount of web presence. So when a US company moves into the UK they can take advantage of the language similarity and easily adapt their service, the culture will mean that the UK is likely to take to the service if it was popular in the United States.

Once an e-commerce site has made an impression in the UK it is easier to transfer their system over to mainland Europe and to the German, Spanish and French markets. This is because the brand name becomes well known in the UK and word spreads to the rest of Europe about the usefulness of the system and they start to use the UK version until there is enough demand for a local version to be opened. It would even be possible to operate the service from the homeland until operations became big enough to support themselves.

Back to: Marketing Essays

Conclusion

In this piece we have looked at many of the reason why e-commerce websites are said to be either successful or a failure. We have discussed the reason why some of these companies have been unsuccessful and why others have managed to be successful, even if they go against the norm.

We have listed what companies should be looking to include in their strategic business plans and what could be the benefits of doing so. The ideal situation for e-commerce has been listed as well as warnings that each industry has to be taken on its merit. This would include carrying out SWOT, PEST analysis and Porters 5 Forces model.

We also concluded that if a company wanted to survive then they had to take advantage of one of the Internets best feature, its global aspect. Taking advantage of this will help grow the brand, keep it in existence longer and mean that a downturn in one economic climate should not have too much of an affect on the company in total.

It is normally very hard for an offline company to expand abroad, because of the expense of moving into a market or acquiring a market player. An e-commerce company can, as shown between the UK and USA, slightly modify their system and either create a market or move into a market.

It looks like the most successful e-commerce websites will be the ones that have the backing of an offline retailer and that the rise of the major e-commerce retailers is behind us. We can expect the market to be dominated by big offline players. The major problem to online retailers I building their brand name and acquiring the trust of the general public while at the same time marketing themselves in a way that will cause people to visit their website.

There are many ways for the success of an e-commerce website to be judged, at the moment the fairest is to compare the websites on unique hits per month as only a few are actually turning a profit or quoted on the stock markets. If this were the case then it would seem that Google is the most important website in the world.

By copying the way that Google has enter into the market and overtaken everyone else should be a model on other companies to make it in the e-commerce world. It would also be wise to follow the example set out by Tesco and make sure that the money and finances are well controlled before spending. It is always important to have the goals of the company in mind and keep driving the company forward and continually evolve.

An e-commerce company should not be planned too differently to an offline business as e-commerce has moved itself into the general psyche of the business world and had now become the norm instead of a new, exciting way of doing business.

All companies should not determine themselves whether they are online or offline but in which markets they operate in. Companies with an offline presence as well as an online presence should not miss the opportunity to exploit the possibility of a global audience and become a worldwide brand.

Order Now. It takes less than 2 minutes.

1. * Name   
2. * Email   
3. * Phone   

1. * Your essay question 
   (please give as much detail as possible)