An argument in support of partnering with well-known companies to take advantage of e-growth commerce's possibilities.
One reason why established companies may be better positioned to take use of e-development commerce's possibilities is that they are more likely to have the financial and other resources necessary to take advantage of the opportunity. This is because established brands are more likely to have greater access to money, such as bigger bank loans or even venture capitalists, since they are already regarded as more dependable and financially stable, prompting banks to lend and venture capitalists to consider the investment as viable.
As a result, the brand is able to develop a more effective e-commerce platform. This would encourage consumer usage because a bad experience would discourage them from using it again; therefore, the availability of finance allows the brand to improve the customer experience by responding to their needs and wants much more quickly than non-established brands who may not have the same access to finance.
For example, Domino's spent £1.4 million more in the first half of 2015 than in 2014 to enhance its customer-facing takeout app. This indicates that established companies recognize that e-commerce provides for development since it targets a new market via a broader platform, allowing for market penetration, implying that these brands will be more likely to take advantage of growth possibilities.
However, one reason why established companies may not be best positioned to capitalize on e-development commerce's possibilities is because non-established businesses may be able to do so just as readily as established brands owing to reduced entry barriers. In terms of money, branching out into e-commerce may not be as expensive as it seems. For example, establishing a website or developing an app may not be as expensive as it appears since the brand just need the basic capabilities to create this platform.
Some of the current employees, for example, may be able to build a website that meets the requirements of the consumers who want to use it. Also, the brand would primarily require the skills required to enter the e-commerce market in the first place, which would not always necessitate financial investment, as there are now many options for advertising and entering the market that are either completely free or only cost a small fee, such as using social media. For £1 a month, GoDaddy enables you to build and launch a website.
However, just because a website or other platform exists does not guarantee that consumers will use it, particularly if it is not appealing or has not been marketed enough to attract the appropriate number of clients. Furthermore, just having the platform accessible to consumers does not guarantee that it will be effective; HMV currently utilizes a variety of discounts throughout their whole website to entice customers after a significant drop in sales at physical retail stores.
Established brands, on the other hand, are not best positioned to take advantage of the growth opportunities presented by e-commerce because established brands may not be able to grow if they are already the market leader, making it impossible for them to grow without becoming a monopoly and violating competition regulations.
If they are deemed to be too big, they will be unable to take use of the benefits of e-commerce since it would be illegal. Tesco, for example, was unable to take out specific Netto shops in the UK since doing so would have given them an unfair competitive advantage over the rest of the supermarkets in the country, violating competition laws and making it unlawful.
However, since not all established companies are big in scale, people may consider a smaller local company to be established if it has been operating for many years and was profitable. Also, some bigger companies, such as Uber, may not be deemed established since they are still relatively new to the market, despite the fact that they are well-known.
Overall, I think that established businesses are better positioned to take advantage of e-growing commerce's prospects. Non-established companies, on the other hand, are just as likely as established brands to take advantage of this since the hurdles to entry are low, and it may be a way for them to really become an established brand via the e-commerce platform. For example, despite the fact that many supermarkets in the United Kingdom are well-established, internet sales have enabled companies like Asda and Tesco to significantly increase their sales.
However, it might be argued that if consumers merely switch from physical to online shops, this is not growth since revenues are just coming from a new platform, not necessarily growing. Finally, as I previously stated, this would be dependent on factors such as the brand's size prior to attempting to grow through e-commerce, as larger brands are more likely to be successful in e-commerce due to an existing customer base and thus would be best positioned to take advantage of this opportunity.
The primary point of contention is what constitutes a "established" brand, since many small companies consider themselves established even if they are not well-known regionally or globally, while some bigger brands may not be deemed established by the general public.
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