Question

Tommy Shelby lives in Mahebourg. On 15 June 2020, he lost his job as bartender in a hotel in the southern part of Mauritius, due to the COVID-19 pandemic. He was offered Rs200,000 as severance allowance, for his 5 years of loyal service to the hotel. Taking into consideration the craze which online purchases took during the national confinement period, he is now thinking of investing the severance allowance money, to launch an e-commerce website for the sales of products. He is thinking of selling all types of tangible products that can be ordered online. He intends to earn a percentage of all sales made online, through his platform.
However, Tommy Shelby neither has any knowledge of information systems, nor any experience in electronic business. Therefore, your contribution is required to help Tommy Shelby set up his business by working out the following assignment.
1. Use the Porter 5 Forces Model to analyse the market viability for Tommy Shelby’s business.
2. Discuss how the STEEPLED factors can influence internationalization of Tommy Shelby’s e-commerce platform.
3. Define the strategies that Tommy Shelby need to put in place for his business to succeed and sustain.

Answer 1

1. We have to analyse the market viability for Tommy Shelby's business using the Porter 5 Forces Model:

(1) Bargaining Power of Suppliers: The bargaining power of suppliers is generally low to medium. Reason being, rules are set by the brand and suppliers have to follow them.

(2) Bargaining Power of Buyers: Bargaining power of buyers is generally high. The reason being the presence of a lot of platforms in the market and switching cost being negligible.

(3) Threat of Substitute Products: There are two threats of substitute products. First is the presence of a lot of e-retail businesses and second are the physical retailers.

(4) Threat of New Entrants: The threat of new entrants is low to medium. Reason being, huge cost involved in technology and marketing.

(5) Rivalry in the Industry: It is usually high because of presence of large number of players. The number of brands have increased significantly which has led to a lot of competition in the market.

2. STEEPLED factors can influence internationalisation of Tommy Shelby's e-commerce platform as follows:

(1) Political Factors: The challenges to e-commerce retailers may not be same as physical retailers, yet they have a lot of political restrictions. For example, the growth of global leaders like Amazon and eBay can be hurdled through red tapism.

(2) Economic Factors: They are very significant when it comes to businesses. Reason being their direct influence on business revenue. For example, due to recession there is unemployment and people cut costs which result in less buying.

(3) Social Factors: They had a huge impact on business. Globally fashion market is always changing and trends change accordingly. Growing use of mobile phones has also resulted in volatility.

(4) Technological Factors: They are very important in business context as businesses are heavily reliable on technology. From Amazon to ebay every brand is investing a lot in their technology. It is a deciding factor for businesses to determine their popularity and profits.

(5) Environmental Factors: Direct environmental impact is very low to zero to companies. Still they focus on sustainability. They use sustainable packaging and recyclable materials.

(6) Legal Factors: It is very crucial for the businesses to take care of legal compliances. Any legal tussle can result in costly affair for the company.

3. Strategies that Tommy Shelby need to put in place for his business to succeed and sustain are:

(1) Decide the target market carefully.

(2) Continue growing and innovating.

(3) Invest in marketing, specially digitally.

(4) Concentrating on great user experience.

(5) Create transparency.

(6) Site should be mobile friendly.

(7) Collect information as much as possible.