This research study is focusing on the application of e-commerce models such as B2B and B2C in business transactions of the Thai Lay Fashion Company. I am the managing director of the Thai-Lay garment manufacturing company. In this case study, in order to identify the competitive strength and weaknesses of the company a SWOT analysis is applied. The application of e-commerce transactions in the company is discussed with the intention to identify the competitive benefits and defects attached to each type of e-commerce tool.
The Company overview
Thai-Lay Fashion Company is a well-established garment manufacturing and exporting company in Hong Kong established in the year 1991. It is a medium-sized company with an annual turnover of HK$ 10 million. The human resource strength of the company is nearly 200. It has manufacturing locations in two places. The center of the business is located in Hong Kong. The production capacity of the company is nearly 60,000 units per month. It produces all types of garment products for adults and children of both sexes. A major part of the revenue of the company is from exports to the European markets, especially in the UK. (Thai Lay Fashion Company Limited. 2008).
Thai-Lay produces all types of garment products. The company is capable of producing all kinds of textile and consumer’s personal design in the range of T-Shirts, sweaters, denims, knitwear, sportswear, etc. The product design strategy of the company is mainly focusing on adding various designs on quality materials. Customers are segmented based on age group and products are designed separately by taking into consideration the needs and interests of customers of different segments.
The customers of the Thai-Lay products are mainly in the European region. The exported garment products are supplied to end customers through retail outlets situated in important market centers. Customers are attracted by trendy designs along with the quality and attractive price of products. The company is flexible to supply a variety of designed products with standardized quality and attractive pricing through the application of advanced production technology and efficient human resource. The company is focusing on more potential consumers in different markets globally to expand its business.
It is intended to identify the competitive strength and weaknesses of the company in the industry. “What makes SWOT particularly powerful is that, with a little thought, it can help you uncover opportunities that you are well placed to exploit. And by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unawares.” (Business SWOT Analysis. 2009).
The major strength of the company is the capability to produce attractive trendy design products with standardized quality at a lower cost. Online marketing techniques adopted by the company are providing competitive strength to sustain the industry profitably. B2B and B2C techniques applied in the e-commerce business transactions are also beneficial for the company to improve operational and marketing efficiency. Modern production technology unified with innovative management practices ensures the productive efficiency of the company in the industry.
The major weakness of the company is related to the management of online marketing. In the competitive garment industry, online businesses have the potential capability to attain market share and profitable growth. In Thai-Lay the online retailing is in its introduction stage, and therefore, it suffers from a lack of business experience in online retailing.
The Company has a greater opportunity in online retailing. Online customers are more price-sensitive. Research and development processes adopted by the company in order to develop attractive marketing strategies for the garment products will provide it a competitive edge in the industry. Quality education and training programs of the government for supporting the export business in the country are supportive for the company to meet the challenges from global rivals successfully.
In the garment industry there exists keen competition among efficient and well-established firms. In order to attract and retain customers in the market, along with manufacturing excellence and efficient human resources, an attractive marketing strategy is essential. Online retailing has a greater opportunity in the garment industry, and therefore, for competing in the industry companies are required to adopt attractive online marketing strategies also. In the globalization era, manufacturers are required to develop efficient manufacturing and marketing strategies in order to compete with other global firms and survive in the industry. To meet the rapid changes and growing competition in the industry, exporters are required to develop adequate marketing strategies focusing on creating loyal customers through strong customer relationships.
E-Commerce Models and Applications in Use at Thai-Lay Fashion Company
Thai-Lay Fashion Company is an exporting company that concentrates on the European garment industry. In garment marketing, online retailing is now getting more acceptance among the customer base. Thai-Lay adopted online retailing for its products in order to compete in the industry and sustain its market share. For the purpose of assisting online retailing in the most appropriate manner, e-commerce technologies B2B and B2C, and corporate portals are adopted by the company. Supply chain management is carried on through technologies of collaborative commerce to increase efficiency.
B2B and B2C in Thai-Lay Company
“Business-to-business (B2B) describes relations of commercial partners, without serving the end consumer. Business-to-consumer (B2C), describes activities of commercial organizations serving the end consumer with products and/or services.” (Chen 2006).
Thai-Lay adopted e-commerce technologies of B2B and B2C for interacting with the business clients and customers respectively. Through the adoption of B2B in business transactions with business clients, the process becomes more time and cost-effective. The application of B2C in the organization ensures better servicing to the customers through a faster and convenient shopping experience. It facilitates the company to adopt different marketing strategies frequently. Through the interconnection of call centers and websites, better customer servicing is provided. In order to sustain the price-sensitive online consumers, the company adopted economy pricing strategies. In B2C, in order to attract customers, attractive design layouts are prepared for both the real and virtual premises.
C-Commerce is a new version of e-commerce in which electronic technology is used in all aspects of the business. In this method, the planning, designing, marketing and customer servicing is carried on through electronic ways. (Heisterberg 2002). In the intense competitive garment marketing field, c-commerce has high potential for providing competency through facilitating better customer support. By identifying the potential of c-commerce, Thai-Lay Company adopted it for its export business. It is used for exchanging business ideas between different departments of the organization. Through this, information sharing between the departments becomes easy and accessible to all of the organizational personnel.
“One major function of a corporate portal is it provides an effective information sharing method within an organization.” (Corporate Portal: Technology). Corporate portal is used in the company for internal as well as external communication via online. In the company websites, detailed information relating to the product features and its virtual image are displayed. Information relating to the company and contact details are also published in the website to facilitate the customers. Collaborative portal is arranged by the company. Application of collaborative portals helped the company to save the time and cost requirements on a larger scale. In case of purchasing of raw materials and other necessities for the manufacturing operation, the company adopts electronic ways to contact the suppliers and place the orders. For this, supplier portals are highly facilitating with reduced time and cost. Through the customer portal, customers of the company are facilitated with easy buying without time and distance restrictions. For the interaction with the customers and suppliers through electronic ways, collaborative commerce technique is applied by the company.
Supply chain management and c-commerce
“One of the key impacts of c-commerce is to break down traditional barriers within the company between its departments, geographical units, and employees, and on the outside to connect the company seamlessly with its customers, suppliers, distributors and business partners.” (Rao 2003).
In the export business of Thai-Lay supply chain management is a very important topic. The manufacturing centres of the company are situated in Asian countries whereas the marketing centres are placed in European countries. Thus in order to combine the production and marketing in the most appropriate manner e-commerce based supply chain management is adopted by the company. Through the application of c-commerce and corporate portals for exchange of information, lot of time and cost is saved. Online meeting between the parties involved in the supply chain makes the business process risk-less and easy. In order to reduce the security risk related to the online business transactions, trusted intermediaries are used by the company.
The customers of the Thai-Lay products are mainly in the European region. The exported garment products are supplied to end-customers through retail outlets situated in important market centres. Customers are attracted by trendy designs along with quality and attractive price of products. (Yang, 2009)”.
Explanations for the Queries from the Tutor
- Along with retail marketing outlets in the exporting countries, Thai-Lay occupies ecommerce division for marketing its products via online. In ecommerce and e business, customer retention is crucial for maintaining the profitability and market growth of the company’s products. It is very difficult as there are plenty of online retailers that offering same type of products. Product pricing is an important matter along with product differentiation to influence the purchase decisions of online consumers. Thus in case of Thai Lay products, trendy designs with customer attractive pricing strategy are the main features that helps the company to create a strong customer base in the retail marketing field. In online marketing, these features will act as competing factors for the company’s product that attract and retain the customers for a long term. The B2b and B2C strategies are used in different countries. In UK, B2C strategy is used where as in other European countries; it adopts the strategy of B2B. I have the view that online marketing is meant for those who haven’t enough time for buying from retail outlets. The convenience of purchasing is the main factor that attracts customers towards online buying process. When compared to online marketing, offline marketing have its own special features that services of sales personnel in the shop for taking the optimum selection decision, bargaining for pricing, and testing the suitability of the garment products for the user before buying. Thus actually there is no channel conflict between the online shopping and offline shopping. In online shopping, the pricing for products are fixed at little lower than the retail outlet pricing. But no bargain is allowed in online marketing. Thus the conflict between pricing in between the two strategies is not affected each other.
- In UK the company occupies retail outlets for marketing its products. In other European countries except UK, the company is adopting the business strategy of B2B for marketing its products. Ecommerce is used for combining the factors in the online marketing. It is carried out through a selected intermediary. Ecommerce have functions in market research, supply chain management, product design, product distribution, advertising and promotion.
- The online marketing of the business is transacted through the intermediaries. Intermediaries are contractually responsible for connecting the online customers with the Thai Lay company. They control and direct the product orders from the customers to the company. The product orders from the online customers are transferred to the company through online and the supply of products are carried on by the company itself. The intermediaries are in European regions.
- Thai- lay applied collaborative design online for designing the products in trendy ways. For designing the trendy designs, information from market research is collaborated with trendy designers through online technologies.
Business-to-business transactions and business-to-customer transactions are integral part of e-commerce based business practice. Thai-Lay adopted these strategies for carrying out its online marketing. International quality standards and value added production techniques are adopted by the company to ensure the product quality. Acquiring customer base is difficult in e-commerce business. The e-commerce techniques adopted by the company are efficient for providing maximum satisfaction to the customers.
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