Impact of E-Commerce on Global Business

Introduction

E-commerce is different from any other type of business. In other words we can say that e-commerce have far more similarities than differences. E-commerce has its road map for the operation and development of the business; just to make sure we will not be lost. It has its own process for the business planning, to set the goals, think ahead, anticipate problems and some measures for the success.

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The Internet is same like any other sales channel. The Internet allows companies to advertise information fast with almost zero cost, to reach customers with their range, to introduce new and innovative product rapidly, to reduce costs and generate savings, to provide complete information in short period of time, to answer customer questions quickly, and many more differences. However, Internet also creates more bargaining and selection power for the customers, creates more perfect information market to the market place.

The Internet is global and being on the Web means that our business will be visible internationally which will be open 24 hours a day, 7 days a week and 365 days in a year. E-business plan must account for this difference in Web hosting and fulfil the requirement of customers.

The Web is giving greater opportunities for personalization of content, self service for the customer and one to one marketing.

E-business has always focused on “getting close to the customer”

We just discussed about the differences of business and e-business. In the following pages we will discuss the impacts of the e-commerce with perspective to Abbey Hotel, Reading which we have taken into consideration as a practical business example. Discussing about the e-commerce, we will see about the hotel, its strategy-setting activities such as writing the mission statement, core value proposition which are offered to supplier and consumers, defining the business model, supply chain management, identifying target markets, identification of critical success factors and critical risks.

Executive Summary

The long term goal of The Abbey House Hotel for temporary lodging and boarding with our shining restaurant and attractive with safe car park creating a differentiated experience, the historical nature of the Reading buildings and as well as the modern Oracles and shopping centre with its unique location in one of the most attractive part of Berkshire. We plan to be more than a great lodging, restaurant, bar and safe park. We planed to create friendly environment and pampered guest with our unique selling services. Expanding our exposure via the Internet and introducing our Abbey House Hotel on the websites to maintain our standard and to control over the market.

The Abbey House Hotel aims to build a strong market position in the Reading area of Berkshire as a result of few B&B in the area as well as the mild competitive climate in the area. The Abbey House Hotel aims to offer its services at the competitive price to meet the demand of the middle to higher income local market residents and tourists.

Location

The Abbey House Hotel is a beautiful facility. The Hotel offers 18 individually furnished rooms, each with its own antique theme. We are a complete bed and breakfast Inn with a full complementary breakfast served each morning to our guests. Oracle’s target market strategy is based on becoming a destination of choice for professional couples in the greater Reading area who are looking for a place to relax. We will also advertise to the newly married couple who are looking for that special get away. It will be important for us to be visible to those potential guests who are travelling on motorway M4 through Heathrow.

Abbey house hotel is an established B&B, and has been in operation for the last three years. After possession and a brief period of becoming established, Abbey House will diverse into other venires to ensure a steady flow of patrons (tourists and locals) through its doors. The Abbey House is a partnership, equally owned by Muhammad Riaz Hussain and Irfan Mahmood. Mr. Riaz resides on the property, managing and maintaining the business and satisfying guest’s requirements and Mr. Irfan is taking care of financial matters

The Service

The Abbey House was originally built in 1980 and is believed to have been one of three train stations on Reading. The slogan for The Abbey House Hotel is “Home Away From Home” The slogan Home away from Home was chosen to ensure that customers have a different experience different from their day-to-day life. In order to be customer conscious, The Abbey House Hotel is offering four different type of accommodation to its customers depending on their needs. There will be Single, Double, Twin and Interconnected rooms. In next spring we are planning to add one full service coin-operated laundry machine which will provide the facility of washing, drying and optional folding. The Abbey House Hotel will be opened 24 hours a day, 7 days in a week. Each of our rooms is equipped with one King size bed, Two single beds and one single bed. We have full-service restaurant and a bar. Next spring we are planning to add dance floor which will provide live entertainment to the in house guest. We are also plan to renovate the guest rooms next year and placed new LCD TV in each guest room instead of normal TV.

The Market

The Abbey House Hotel’s target market strategy is based on becoming a destination choice for the people who are visiting Reading (Berkshire) and who are looking for a place to relax. The target markets that we are going to pursue are people or families looking for a vacation destination, honeymooners, family reunion, visiting patient to Reading Hospital (which is nearby) Reading University students. Our target budget is 30% over than the last budget with £25 average room rate.

More variety was added into the restaurant to increase the weekly sales and also adding vegetarian and fish & chips items in our menu. Subscriptions to various Web services will provide international exposure to potential customers for nominal fees, plus it has a website http//www.theabbeyhousehotel.co.uk. The Abbey House Hotel would like to see a 20% increase in customer.

Financial Considerations

Mr. Riaz Hussain and Mr. Irfan will invest £50,000 in the business for an initial capital for the start-up and a significant part of the investment will be finance by HSBC. It hopes to secure a loan of £150,000 from the bank with a payback period of 10 years. Because its family own business, £50,000 will be contributed by two brothers raising its start up capital of £200,000.

Start-up Summary Table

Start-up Expenses

Legal

£1,500

Stationary etc

£75

Brochures

£500

Property Goodwill

£50,000

Lodge setup

£200

Direct TV

£200

Insurance

£500

Other expenses

£500

Total Expenses

£53,475

Start-up Assets

Cash required

£15,000

Start-up Stock

0

Other Current Assets

£10,000

Total Assets

£25,000

Start-up Funding

Start-up Expenses to Fund

£53,475

Start-up Assets to Fund

£25,000

Total Funding Required

£78,475

Business Objectives

The broad objective of The Abbey House Hotel is to offer service at competitive price by meeting demand of tourists and residents area of Berkshire and London.

The Abbey House Hotel also aims to acquire not less than 25 percent of the B&B market before the end of 2009.

Key to Success

In order to succeed, the management of The Abbey House Hotel will strive to achieve the following goals:

To position The Abbey House Hotel as the best B&B in the area of Berkshire of London among the numerous tourists.

Build strong market position among the local residents.

Maintain healthy and sound financial management of the venture.

Business Description

Vision

We are committed to dynamic growth and service excellence built upon our heritage of traditional hospitality. An ethic, respected and evolving organization – a leader in excellence, we strive to consistently meet and surpass guests, employees and other stakeholders, expectations.

Mission

To provide excellent quality and service to all our customers by valuing and rewarding our team, whilst promoting mutual respect and diversity

Core Values

Communication

Listen actively to others

Embrace diversity and value differences

Regularly update information and keep others updated

Open to feedback and communicate positively

Collaborate to exceed the organizational goals as well as our own

Work Ethics

Meet commitments, set personal standards

Timely in our duties and punctual

Understand our duties and responsibilities and keep our knowledge updated

Adapt to change, handle pressure and are open to new ideas

We do what it takes to get the work done

Customer Services

We strive to build customer confidence and are committed to exceeding customer expectation

Actively seek feedback for continuous improvement

Our aim to act quickly on resolving issues

Handling service issues politely, positively and efficiently whilst following procedure

Recognition and growth

Achievement orientation

Performance-based evaluation

Appreciation

Incentives

Setting ever-rising standards of performance

Innovation

Listening and two-way interaction

Participation

Encouragement

Motivation

Initiative

Trust

Cooperation

Support

Teamwork

Sense of ownership

Integrity

Dignity

Respect

E-Business Facilities

Online Booking

You have the opportunity to check room availability and also make an on line reservation. When you click on the “online Booking” box located below the left navigation you will be taken to a secure page – a credit card will be required for you to make an online reservation. Your credit card is only used to secure the booking and your account need not be settled by this card.

Guest will make the booking online and guaranteed by their Credit Card.

B2C

Booking confirmation No

Online Hotel Information

Online booking options

Guest

All bedrooms have en-suite facilities

Double bed, Twin bed & Single bed, Tea/Coffee making facilities, Direct dial from rooms, TV, Hair dryer, Trouser press

Check in time: 1400 hrs

Check out time: 1100 hrs

All reservation must be guaranteed by Credit Card prior to the arrival. Non guaranteed booking will be cancelled 24 hours prior to arrival.

Extra sharing person will be charged £10.

Room Rate Click here to book the room

Sunday to Thursday

Single £75 ENQUIRE

Double / Twin (single occupancy) £85 ENQUIRE

Double / Twin (double occupancy) £95 ENQUIRE

Extra Person £10

Weekend Room Rates Click here to book the room

Friday and Saturday

Single £49 ENQUIRE

Double / Twin £59 ENQUIRE

Extra Person £10

All rates are inclusive of Full English Breakfast and VAT at 17.5%

All rates are subject to change without notice

Online Special Offers

Extended Stay Programme, Room from Just £40 ENQUIRE

Weekends in Reading £45 ENQUIRE

Valid Date: April 7, 2008 – April 7, 2009

Double bed, Twin bed & Single bed, Tea/Coffee making facilities, Direct dial from rooms, TV, Hair dryer, Trouser press

Reading Rock Festival ENQUIRE

Valid Date: August 22, 2008 – August 25, 2008

Double bed, Twin bed & Single bed, Tea/Coffee making facilities, Direct dial from rooms, TV, Hair dryer, Trouser press

Home Away Home click here for our specialities

Advance Purchase Reservation click here for our specialities

(No amendment, no refund will be given in this offer)

Web Plan Summary

The Abbey House Hotel website will focus on the features the Abbey House Hotel has to offer. Each room with its different options will be on the site as well as pictures of The Abbey House Hotel and the facilities that it has to offer. The lunch / dinner menu will be displayed. Room rates will be given, with maps on how to get to there. Attractions with in 30 miles will be on the site and other local colour will be shown. Room reservation can be made online if the consumer wishes to do so.

Website Marketing Strategy

Our website marketing strategy will focus on Corporate, Visitors and groups who are looking for a boarding and lodging. The Berkshire, Oxfordshire and London area will be our main focal point. The Abbey House Hotel will promote through our website by using:

Detailed photos of the Abbey House and surrounding area

Price list of our rooms and our restaurant menu.

Special Package

We will contact with travel agent around the world e.g. Active Hotel. Gulliver’s Travels, Travco, Expedia, Expotel, Late room. Last minute. BSP, Super breaks etc

Guests are making the room booking through the following travel agents and pay to them. These Agents forward those booking to the hotel via email and fax.

e.g.

Gulliver’s Travels www.gullivertravels.co.uk

Expedia www.expedia.com

Travco www.travco.com

Super breaks www.superbreaks.co.uk

On the other hand, these following Travel Agents, they advertise our hotel on their websites, guests make their booking and these Travel Agents forward those booking to hotel and hotel charge to guest directly and pay the commission on top of that to Travel Agents after receiving their commission invoice.

Active Hotels www.activehotels.com

Late room www.lateroom.com

Last minutes www.lastminute.com

Our Hotel’s website is linked with all above mentioned websites. It is another source of e-business to increase the revenue and achieve our target.

Booking through Travel Agent

B2B

Activehotel.com

Lateroom.com

Lastminute.com

Gta.com

Travco.co.uk

Superbreaks.com

Expedia.com

Expotel.com

Booking Confirmation to Guest

Online Guest

Confirmation send to the

Hotel

Inventory Control System on websites by Hotel

Joint websites or travel agents websites providing us a business and we will allocate the rooms and control the inventory. If we don’t have rooms to sell we can close their allocation and if we want to give some rooms to them, we can allocate them number of room as per our hotel requirement. If travel agent has a client who is looking for a room in our hotel or in our area and there is no room is avail able or room inventory is zero then we can sell directly to the travel agent. On both ways we are not losing the business.

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Marketing Strategy

The mission of Abbey House Hotel is to become the best choice in Berkshire area for the boarding and lodging by expending our exposure via the Internet (with multiple networks and links). We are planning to be more than a great hotel. We are planning to bring the guest satisfaction up to the mark and the name of excellence in the hotel industry and guests feel that they are not away from their homes. And we are also planning on adding a full service coin-operated laundry facility (washing and drying)

The Abbey House Hotel makes the guest valued by ensuring their comfort. For special occasions, catered meals, Extra mattress, room service, etc. can be provided for an additional fee. During the weekends, guests will return to the Abbey House Hotel in the evening and find a fine restaurant to dine and efficient staffs is waiting to serve them to make them valued.

The Abbey House Hotel’s target market strategy is based on becoming a destination choice for families, local family’s visitors, and corporate clients, small groups who are looking for a place to relax for short or long period of time. The Abbey House Hotel would like to see a 30% to 40% increase in customers on a yearly basis with 100% customer’s satisfaction. Our target market strategy is based on becoming a destination for people who are looking to get away for a vocation or visit London. Our marketing strategy is based on superior performance in the following area

Quality facilities

Beautiful location

Customer Services

The target markets are divided in to three major segments “Vacationers, Corporate and Family visitors”. The primary marketing strategy is selling to this accessible target market by focusing on their vacation and recreational needs.

Sales Strategy

The Sales Strategy the Abbey House Hotel aimed to adopt is to ensure customers can book via

Telephone

Travel Agents

Internet (i.e. www.theabbeyhousehotel.co.uk)

The Abbey House Hotel also aimed to offer guarantee reservation for regular customers during high season.

Critical Success Factors and Critical Risks

Although Abbey Hotel is a medium sized organization, there are several survival factors imbedded to its organizational culture. Well experienced staff, visionary leadership, eco-friendly geographical location, continues training and development for the staff, chances to grow based on high performance for the staff, continues supervision on house keeping, food and beverages operation, delicious and different kind of menu, clear downward communication pattern, are survival factors in the organization to overcome the challenges for its business.

Among said survival factors in the organization, experienced and visionary leadership, well-trained staff and beautiful location are carrying its business to the top in the industry. Therefore, Abbey hotel could survive as well as it will reach to the business excellence, if the firm can overcome following risk factors. Due to the increased terrorism activities in the world, global certainty is being jeopardized. September 11th incident in New York, recent Bomb blast at Marriott Hotel in Pakistan are some examples. This global uncertainty directly impact for the decline occupancy rate in the hotel industry in main capitals in the world. The most difficult task is implementing proactive steps to overcome these challenges.

Present financial crisis in the global financial industry is another risk for the industry as the share value of many leading hotels is declining. In such a situation, industry is in a danger situation as market is depending on economic sovereignty of any market segment. Secondly, should expectations not materialize, and then sub-par returns could damage the overall financial credibility of the lodging industry. Shortage of skilled work force is another risk factor. Changing government rules and regulation on migration policy will be direct impact for finding skilled staff for the hospitality industry.

Due to intense competition among the hotels in the hospitality industry, brands issues are appearing in present more than in the past. Customers are assessing this culture that it would be affecting the quality of the service in negative aspect. Because, all organizations are prefer to maximize their profit to remain in the market long-term basis. Popularising of eco tourism also may impact for the industry, as right now customer preferences are more for eco-friendly atmosphere within the hotel premises. For example herbal spa, inorganic foods, natural cottage are highly demanded options from customers. In addition to above, increasing loss of control over the customer due to the use of the Internet, homogenisation of the hotel product and increased corporate oversight has reduced the amount of control that operators have over the customer. Hence emerging impact of new technology, operating cost creep, supply change management issues, safety and security issues, reputation risks, high-energy cost, are some other key issues in the industry. The management should emphasis the said survival factors and challenges as provocative measures.