Premium Essay

Online Shopping vs Retail Shopping

In: Business and Management

Submitted By melissaevans78
Words 1925
Pages 8
* Industry Definition – Providing an avenue for consumption purchases

* Industry Value Chain – Fig 2.3 Page 2.9

* Value chain is being altered which increases value for the consumer as the retailer “middle man” is being cut out. Where merchandiser has direct access to the consumer. Banking industry has followed suit to create BPAY, Paypal etc.

* Product Segmentation

* Clothing * Small Goods * White Goods * Food * Music * Movies * Services

* Industry Life Cycle – Fig 2.8 Page 2.19 * Early stages of the Growth Cycle

* Remote Environment * POLITICAL – Change in legislation – ie. Tariff attached to every purchase. Negative * ECONOMIC – Exchange rate fluctuations – most online shopping growth is coming from intl. Labour Costs – need to reduce in order to make retail shopping more competitive. Positive * SOCIAL – Better Security – with entering personal banking information for online payments. Work/Life balance – Convenience and time poor. Positive * TECHNOLOGICAL – More efficient. Very dependent on advancing technology. Cost of production is reduced as the “middle man” ie. Retailer is reduced. Positive * ENVIROMENTAL – Logistically – more trucks on the road to make deliveries. Increased Packaging. Negative * LEGAL – Actually changing the legislation – to allow companies to ship to Australia. Positive
More positives than negatives – industry will grow at faster than average rates. PG 2.35

Porter’s 5 Forces 1. Threats of new entrants
Industry is attractive. No significant barriers to entry. Products available to customers are not much differentiated. 2. Rivalry among existing firms
Strong. Industry is growing and products being sold are not very differentiated. Try to differentiate by shopping miles, “see” the

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