Business Express, MasterCard, Visa and Shopify. This report will

Business Development and Growth


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This aim of this report is to produce a development plan for
the optimisation of a small business I have chosen. The business that I have
decided to focus on is Ruskin Clothing, a small business in my hometown of
Whitstable. Ruskin Clothing is a ‘carefully edited collection of beautifully
made clothing for men & women’ (, 2017). They have two
independent clothing stores that offer designer goods from a range of brands,
they also have an online store that ships to most countries in the European
Union. They currently market themselves through social media outlets in Twitter,
Facebook and Instagram, all very active posting about current deals and what
they have coming up in the future, with a combined following of over 5,500
people. Their website offers a newsletter to customers for the latest news,
offers and styles. Payments on the website can be made through American Express,
MasterCard, Visa and Shopify. This report will look at the role of E-Business
in the retail industry, the opportunities for Ruskin Clothing to expand and
operate internationally, and finally, look at growth implementation plan based
on the findings of the report.

Role of E-Business in the Retail Industry

Electronic business or (e-business) is using computer and
internet technology to facilitate doing business (Ontario 2015). The term
e-commerce is often used instead of the term e-business but e-commerce refers
to the process of buying and selling goods online whereas e-business, is a
broader term that is used to describe a wide range of electronic activities. Some
examples of e-business include email marketing to existing customers and
possible new customers which is an electronical business process, in this case
marketing. Other examples include online systems that tracks stock levels, hire
employees online to name a couple. As long as something is a business process
conducted on electronic networks, it is fair to call it an e-business process (Khurana
2017). E-commerce is simpler as it involves placing orders online and making
payments online, especially in business to consumer type of e-commerce. However,
e-commerce involves much more than online transactions between an organisation
and its customers. E-commerce is considered as ‘all electronically meditated transactions
between an organisation and any third party it deals with’ (Chaffey 2011). There
are opportunities for both buy-side and sell-side e-commerce transactions, two
perspectives of e-commerce transactions. Buy-side e-commerce refers to
transactions from a supplier to an organisation whereas sell-side e-commerce
refers to transactions involved with selling products to an organisation’s
customers. Therefore, e-commerce can be seen as a subset of e-business.

The current change of the retail industry is accelerating
rapidly due to the formation of new businesses not restricted by the
limitations of what may be considered traditional models of organisation and
structure, online stores being an example of this (IBM, nd). In a traditional
selling method, there is a physical experience from a customer and so it is
easier to build a customer relationship, e-business has had to find new methods
to engage the customer and build a relationship electronically. Generally,
e-business can provide more product information and details but needs to define
the sales transaction, third party payment and financial transaction as well as
having a customer service process. As technology continues to evolve, there is
a greater need for retailers to come up with new ways to connect to their
customers and so for the retail industry, e-business is becoming an important
part of their business strategy (VisibleOne, 2017). Before e-business and
e-commerce, retailers were restricted to local and domestic customers, making
it tougher to create sales. E-business has created the opportunity to sell
products on a global scale, allowing retailers to branch out world-wide. The
online retail market grew by 20.9% in 2016, (Mintel, 2017) with clothing being
the largest sector at 27%. The same study showed that 91% of consumers had
brought online in the last year.

E-business builds closer relationships with their existing
customers and suppliers (Chaffey 2011). Through providing high-quality online
services, a lasting relationship can be built between organisations and their
stakeholders thus improving customer retention. However, customers are only a
click away from competitors that may even be advertised on the same page. A
benefit to e-business is the potential to increase revenue that comes from
being able to reach a larger customer base and encouraging customer loyalty
through repeat purchases. There can also be a cost reduction in an organisation
that operates their services online due to reduced staff costs, transport costs
and cost of materials. Speed with which suppliers can be obtained and goods
being dispatched is sped up, reducing the levels of inventory a business has,
along with reduced operating costs. There is a growing customer demand that is
driving e-business in an organisation to improve the range and quality of
service the offer to avoid losing market share to businesses that are ahead of
them in the e-business area.

‘E-commerce is one of the most exciting spaces for today’s global
online community’ (Vikram 2012), which creates opportunities for e-business.
This paper from Amith Vikram (2012) looks at e-commerce in India where there
are many opportunities and problems. E-commerce is being heavily invested into,
reflecting the potential it has over the coming years. The critical mass of
internet users gives opportunity to e-commerce due to the number of people
familiar with web services. In India, there is a rising middle class with
disposable income so the potential of consumer e-commerce in India is expected
to impact 594.8 million people by 2024-25. Number of online shoppers is on the
rise in India possibly because of smartphone penetration rates being high and
the ability to use internet on these. Despite this, there are challenges for
e-commerce such as high cash burn rate where large amounts of funding are
required for marketing, overheads and salaries so some smaller firms are unable
to cope. Another problem with e-commerce is its ethical issues. Privacy for
customers is a concern when interacting with business on the web using private
and personal information prompt concerns for both privacy and data security.


Opportunities for Ruskin Clothing to Expand and Operate Internationally

 There are
opportunities for SMEs, such as Ruskin Clothing, to trade internationally as a
key factor when it comes to growth of the company. As mentioned before, Ruskin
Clothing already ships to many European countries but there are opportunities
to expand this over to North America and Asia, two huge markets. International
activity comes with many benefits for SMEs (Mirkovic 2013). Firstly, evidence
shows that SMEs that have greater levels of internationalisation often achieve
higher turnover growth. There is also evidence that internationally active SMEs
are more likely to grow into larger firms. There is typically no other option
than to export if they are wanting substantial growth. With the benefits of
operating on an international level there are problems that come with it.
Businesses need to stay up to date with the market and public policy
developments in the foreign markets they want to operate in. New working
practices and quality standards would need to be introduced to overcome the
language barrier and business culture. The exchange rate needs to be put into
consideration and the volatility of it needs to be accounted for.
Internationalisation can be further complicated with the partnerships needed with
bigger firms, and these factors could create market failures. The
internationalisation of a business not only is the export activity but involves
importing, foreign direct investment, international subcontracting and
international technical cooperation.

The EU referendum is an opportunity to increase
international trade for Ruskin Clothing by taking advantage of the weak pound. Overseas,
the weak pound is making British goods and services more affordable for international
buyers (Gough 2017). Ruskin Clothing could see this as their chance to expand
their sale overseas to the USA.

Another exporting market with great opportunities is India.
India is one of the fastest growing economies in the world ( 2016).
English is widely spoken in India so immediately that breaks down the language
barrier. Rising personal incomes creating a new middle-class consumer market
could lead to a demand in quality clothing from Ruskin Clothing. It has one of
the world’s largest youth populations that Ruskin could target when marketing
in India. The challenges of operating in India consist of a very price-competitive
market where price is an important factor for customers, with Ruskin having
high end clothes this may not create much demand due to their prices. The barriers
to trade are high because of regulatory constraints, local sourcing
requirements and import tariffs. Clothing isn’t even in the top 10 industries
importing into India so will be difficult to break through.

Growth Implementation plan

My recommendation for Ruskin clothing is to invest into and
grow their e-business before looking to the USA to export to and internationalise.
Looking at the e-business of Ruskin clothing, they already have a very good
website, with all their contact information, ability to sign up to newsletters,
an online shop that ships to European countries and links to their social media
that is well followed currently by over 5,500 people. One thing I would
recommend adding onto their website reviews so that customers can leave feedback
and create a relationship with the company. Therefore, Ruskin need to take
advantage of e-business building a relationship with their existing customers as
it is easy online for customers to move onto a competitor with just a click. It
is cheaper to retain customers than it is to attract new ones. Ruskin clothing
only has two stores open currently so most of their business is through
e-commerce. Social media marketing appears to be working well with them through
sponsored posts on Twitter and Facebook. When referring the Ruskin on what to
do moving forward, I would look at larger fashion website and learn from them. A
case study for this would be ASOS, an online fashion retailer. ASOS expanded
from the UK, into continental Europe and later into the US and the rest of the
world (Alibhai 2016). ASOS is an example that a strong performance in the core
market does not lead to guaranteed success elsewhere with recent news that
sales increased 30% since they withdrew from China. Like ASOS, Ruskin could use
their online traffic data to gain insight into where customers outside of the
UK are based and use this data to identify where to expand to first. Consumers would
already be engaged with the brand so expansion into the countries identified could
be very successful. When going international, Ruskin should look to the
countries with similar markets to the UK, such as Australia and the USA.

Ruskin clothing is a small fashion retailer with a large
potential for growth and development. With the opportunity of e-business and
e-commerce they have already created themselves through their online store and
the rapid changes in the retail industry to online shopping, that’s where Ruskin
should look to develop, build themselves as an online fashion retailer and
internationalise by creating websites in other parts of the world.