Cycle time is the time period from the beginning to the end of the business process, as defined by the seller and the buyer. Traditionally, producer will sell their goods through intermediaries such as wholesaler and retailer before the goods were transferred to the customer. This process will specifically increase the cost of the goods when arriving in the customer’s hand. With the introduction of E-Commerce, customer can directly purchase goods from the manufacturer by just one click on the mouse. It is more efficient, convenient, reduce cost and time for both the buyer and seller.
Besides that, with the presence of intranet, employees are able to access to company’s database and able to alert whatever information about upcoming events or company’s certain decision that had been made. Employees may also deal directly with the complaints that had been made by customers, answering customers’ request and take action to solve their problems. Employees’ empowerment can be improved by giving more flexibility to the employees to access to the information and make decision.
Furthermore, E-commerce may allow customers to get relevant and detailed information that they needed about certain product in seconds. E-Commerce enables customers to shop or do other transaction 24 hours a day, all year round and from almost any location they are.
Friday, 13 June 2008
Discuss how E-commerce can reduce cycle time, improve employees’ empowerment and facilitate customer support.
Kozmo.com
An example of an E-commerce failure and its causes~
“You could order anything from snacks to movies at any time and have them delivered direct to your door within 1 hour with no delivery charge!”
This was a great idea that founded by young investment bankers, Joseph Part and Yong Kang in March 1998 in New York City. Kozmo.com was a venture-capital-driven online company that promised free one-hour delivery of anything from DVD rentals to Starbucks Coffee in the United States.
Kozmo promoted an incredible business model; it promised to deliver small good free of charge, typically by using bicycle messengers. The idea was great but ultimately a little too good to be true. One of the basic problems with its business model was offering a costly home-delivery service for free, even on very small orders on which it was impossible to turn a profit.
Moreover, Kozmo’s greatest error with their customers occurred when they stopped catering to their main client base of middle class college-students. This was done so that they could target more upscale client who would order expensive products. This was a misguided decision making because the college student customer is made up 76% of its business.
A simple idea turns into a multi-million dollar company in a few years. Kozmo.com’s aura helped it raises more than $250 million, but the company was unable to generate enough revenue to cover costs. In 1999, it had $3.5million in revenue, compared $26.4 million in net losses.
Not surprisingly, the company failed soon after the collapse of the dot-com bubble, laying off its staff of 1,100 employee and shutting down in April 2001.
AMaZon.com
An example of an E-commerce success and its causes~ 
Amazon.com Inc is recognized as one of the most popular and successful e-commerce company.
The keys success are lowering price, offering convenience, expanding selection, increasing availability and its strong focus on customer experience which is infused throughout all levels of the company and includes all aspect of the buying process. It is famous among online shoppers with its good-quality search function, understands customer profiling without invading customer privacy, and remembers your shopping cart even you left for several months compare with other online retailers.
It also gives you options that most online retailers can only dream of, such as the ability to group your items into as few shipments as possible. Amazon.com has grown its business in many ways to increase its revenue such as it has managed to build a retail business with a negative operating cash flow cycle which enable the working capital effectively become a source of investment cash for the company, the Marketplace of third party sellers created by Amazon enable Amazon receives a commission on products sold, new product categories, and other businesses.
Unlike eBay/Paypal, Amazon sellers do not have to maintain separate payment accounts - all payments and payment security are handled by Amazon itself. Customers are more confidence and trust them. According to a Compete.com survey, Amazon attracts approximately 50 million U.S. consumers to its website on a monthly basis.
