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Essay: Elite Sports & Leisure

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  • Published: 21 June 2012*
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Elite Sports & Leisure

Elite Sports & Leisure is a company that supplies sporting equipment. They want to implement a new computerised business system namely e-Commerce system. In order for us to complete this task we need to investigate on some factors for example:

‘ What effect will it have on the potential market?
‘ Effects on current and new distribution channels.
‘ What effect by implementing the e-Commerce system will have on the structure of the organisation?

Discussion:

Organisation and its mission

ESL sells reliable high-quality products on a large scale thought out the United Kingdom. They also offer a high level of customer satisfaction, confidentiality and high class service.

ESL must also be able to maintain financial balance positively, and deliver an even higher value to its clients. ESL main aim must be to improve their customer satisfaction and development of new customers in the UK.

In order to achieve ESL Aim, the focus must on the selling price of the products, customers consider price but they would buy on quality service if the offerings were position correctly. Price is the main key player they are exposed to again and again. Customers would rather pay 10-20% more for a relationship with a long-term vendor providing quality service and support.

Second the most important factor to bear in mind is; availability of the products. The customers tend to want any products immediately, in this way ESL can be subject to high-pressure, undertrained sales person (either by post or telephone), who may not be able to factor in all the customer’s needs. The ESL customers or buyers clearly understand the concept of service and support and are much more likely to pay for it when it is clearly stated.

There is no doubt that ESL can compete on the internet by means of an online shop against other service providers in their field of expertise. ESL need effectively compete against the idea that customers should buy sporting equipment either for their own business or personal use.

Potential Market Impact:

The following factors play a vital role in determining the potential markets:

‘ Market Size and Growth
In a recent study is shows that the consumer markets has had a fluctuating of sales declining and a growth spurt, but yet the market is beginning to show renewed growth once more.
‘This Key Note Market Report analyses the consumer sector of the sports equipment market, covering a broad range of sports sectors, and has estimated a positive year-on-year growth of 5.7% between 2011 and 2012’

The competitors that ESL will compete against will be for example:
‘ JJB Sport
‘ Greaves Sports
‘ Decathlon
‘ Sports Direct

That is why the Aim of ESL must be understood and focus on. Customer satisfaction must be ESL first focus to gain more market share and in this way gain probability.

‘ Market Accessibility
Products will be supplied from local manufacturing companies, in this way the import duties and tariff rates will be low, enabling ESL to maintain a affordable selling price.

Distributions channels will have a positive effect, as the consumer can assess the products and order it online in the convenience of their own home or shop. Register customers can now make the orders online and not via post or telephone, thus will also bring down their overhead costs.

e-Commerce will also enable ESL to store their products on a database thus
enabling them to produce their own catalogue.

The other two factors to take into considerations is Economic Conditions and Culture, Legal and Political factors. The Economic climate is growing steadily as discuss previously.

Impact of E-Commerce

E-business is fast becoming an important initiative for most companies, one that impacts every aspect of the how a business is run. e-Commerce enables a company to sell though a website, that is currently the fastest growing method of trading. ESL will be trading in the following e-Commerce forms:
‘ Business to business (B2B)
‘ Business to consumer (B2C)
Trading online will enable ESL to reach much wider audiences while cutting on their overhead costs. Although the outlay on developing a good website is substantial the potential benefits can be enormous.
The distributing channel property can be divided into three layers. The bottom layers will be manufacturers. The middle layer will be the producing or advertising companies. The top layer will be the companies that have direct access to the consumer.

The Internet will enable the bottom layer (Manufacturers) to deal directly with the top layer (Consumer). The consequence of this that power has moved from the traditional industries to the creators. On the other hand, the larger distributors have been combining, pulling up many of the traditional industries companies into the top layer.

As a result of this, there is a developing of a new different structure for the delivering of logical content. The top and bottom layers are becoming more empowered and the middle layer are becoming less. The internet enables the bottom layer to market and distribute their works directly to the top layer, thus enabling the top layer to sell directly to the consumer.

What does the internet mean for the middle layer (Advertising Companies)? It means that unlike a few years ago where retailers needed to find the right path to get access to the consumer, but in today’s world the consumers uses the internet more frequently to do online shopping and get information. Although there are a few economic obstacles for logging onto the internet or putting up a website, that does necessary not attract the consumer.
To attract the consumer or an audience, you need to have a digital store front where you can promote your products and services, but due to financial restrains most companies do not succeed in this task.

Retailers are no longer the only distribution channel. Thus leaving the retailers or advertising companies in a ‘mix bag’. Convergence creates problems for the advertising companies, as ESL will no longer make use of their services as e-Commerce will give them direct channel to the consumers also enables them produce their own catalogue.

Impact on the telephone and post office services: If ESL are only considering the e-Commerce to market and promote their products, then the computerized system will have a significant impact on their sales and profit and decreasing the orders of telephone and order by post. E-Commerce alone cannot produce their profits that thy will seek. It will bring the audience to the works but not necessary sell the products. I would recommend to still keep the other two distribution channels for the customers who are resent lest to change

So overall implementing the computerized system will require a redesign, organisational restructuring and alignment, new job creations and descriptions must be reviewed and revised, policies must also be dealt with in the same manner. Tax, legal and security issues will need to be reviewed and implemented. The new technology will only be beneficial to the company by increasing the organisations productivity.

Functions of the Organisation

The functionality of the Organisation is the most crucial and vital operations for the organisations. ESL aim is to provide high quality consumer service, in order to achieve this goal they have to sell reliable quality products at affordable price. In order for all of this to fall in place they will need the following resources/departments and knowledge to accomplish this task:

‘ Finance department
The department will be affected directly and indirectly. Customer orders will not only be received manually but electronic orders, as well. It will need to be obtained, record, analyse and be presented. Finance department will have an increase in work flow from various departments.
‘ Human Resource Department
It is the HR departments function to ensure that people stay motivated and are work efficiency .New job descriptions will need to be created and reviewed. Work planning will need be established. New working and safety policies would need to put in place.
‘ Marketing Department
The normal marketing strategy of the market elements for example:
‘ Who, what, when, where, and how
will have significant change due to e-commerce/business. Secondary
effects that can occur is that the customers will become more empowered
overall, development processes becoming more cooperative. Advertising
will have a change as the current vendor for advertising will no longer be
used. Advertising will no be incorporated into the e-Commerce system.
‘ Administration & Purchasing
Both these departments needs to revised and plan their departments when incorporating the e-Commerce system. More Administration work will be dealt with. Administration department cannot afford to slack back or have a negative affect as it controls all the functions of the business.
‘ Research and development
Research and development will be done by the main suppliers of ESL. As ESL only focus is to sell the products.

Stakeholder

As seen in the above diagram, stakeholders plays a crucial role in the functionality of the organisation, without the positive and effectively running of this unit, the whole company can be heading for a disaster.

The two main important stakeholders that ESL has to consider are the Internal and External Stakeholders.

Internal Stakeholders as shown in the diagram is the management, owners and employees. That is where the business functions like Administration ect, plays a crucial role. If it is not for the employees then there will be no ESL to sell any products. Management but overall Human Resource department is there to make sure that the employees stays motivated, by introducing training for career improvement, incentives for exceptional work done ect. ESL must improve and maintain their employee loyalty and keep their spirits up.

Secondly the external stakeholders; customers, creditors just to name a few can have a enormous effect on the company. . ESL needs the customers to buy their products in order to make a profit. Complications arises when these customers is unsatisfied due to, poor customer services, lack of knowledge about a product, website not user friendly ect. ESL need to stay on top of their main aim and that is to satisfy their customers. ESL must also realise that not all their customers is computer literate and would rather choose another way of purchasing their products like for instance thought the post or via telephone, as state before, not all customers are keen for change their will be customers who is relentless to change.

Creditors for instance a Bank may seem this as a positive or negative effect. I think for ESL this would mean a positive effect as they have been doing business for the last 5 years and have grown and into a successful & profitable business. The negative side for one of the stakeholders implementing the e-commerce system would be for the advertising company. ESL would no longer make use of their services thus has a negative effect on their profits.

Thirdly other Stakeholders to be considered is finance, commercial, legal, , IT, logistics, customer services. Since, by definition, stakeholders are those who are impacted by (or have an impact on) the E-Commerce system, their perspectives need to be taken into account in order for the E-Commerce system to be successful. Stakeholders can have positive or negative views regarding the E-Commerce System, and will often not agree with one another, making it a challenge to reconcile their varied viewpoints. Stakeholders are an important activity to control and maintain.

Distribution Channels:

Elite Sports & Leisure has 2 channels at the moment; phone and by post.

Current Channel:

The methods that Elite Sports & Leisure is using can be classified as Direct Channel & indirect Channel.

Phone Order = Direct Channel: Elite Sports & Leisure is cutting the costs by avoiding the middleman mark-ups on their products.
Catalogue = Indirect Channel: Elite Sports & Leisure is using a middleman like advertising company. Indirect Method is best suited to their product to obtain market share

The logistics in implementing a computerized system will be influence in all parts of the supply chain as seen above. I would say the area of B2C is the greatest challenge overall because it will involve the system support and structural aspects. E-Commerce it self’s require a very complex logistics activities when the products are or need to be delivered to the customer, this is because the logistics system can become more difficult as a multi numbers of costumers services are increases.

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