Post on 12-Mar-2023
Executive Summary:
NetBazaar is an e-commerce start-up company positioning itself to
become the market leader in offering online merchants and
consumers a uniform and trouble-free way to return merchandise
purchased online. The company offers a business to consumer and
m-commerce solution to online merchants of physical, non-
perishable products. The company utilizes a consolidation
approach in handling all product returns that allows online
merchants to instantly save bad sales, restore customer
satisfaction and stimulate repeat sales, while offering consumers
a convenient, centralized online location to claim returns. By
creating a new service category and utilizing the first-mover
advantage, NetBazaar positions itself for rapid growth and gains
a strong opportunity to raise entry barriers for possible
competition.
Business description:
Name of business: NetBazaar, proposed to Banglalink as a new
SBU.
Location:
We have decided to establish the headquarter of NetBazaar in
Tigers' Den, House # SW(H)04, Bir Uttam Mir Shawkat Sharak,
Gulshan-1, Dhaka-1212, Bangladesh.
Business overview:
Electronic commerce, commonly known as e-commerce, is the buying
and selling of product or service over electronic systems such as
the Internet and other computer networks. Electronic commerce
draws on such technologies as supply chain management, inventory
management systems, internet marketing, online transaction
processing and automated data collection a systems. Modern
electronic commerce typically uses the World Wide Web at least at
one point in the transaction's life-cycle, although it may
encompass a wider range of technologies such as e-mail, mobile
devices and telephones as well.
In 1979 Michael Aldrich invented online shopping.
Net Bazaar is an electronic trading forum that enables anyone
with cell phone to conduct transaction through its online
platform. It’s basically an e-commerce site like Cell Bazaar,
Click BD. Net Bazaar enables sellers to list details of their
products, produce or even services in a database while buyers can
look for any information through SMS. It will not handle
transactions, but is simply put buyers and sellers in contact
with each other via mobile phone or PC.
Bangladesh is densely populated country with a population of
approximately 160 million where 95.53 million are mobile phone
users, who can be the customers of this service including farmers
who can use the service to sell their harvest at fair market
prices and struggling students that find and connect with tutors.
Our Mission and Vision:
Our aim is to gain more expertise and confidence towards
delivering quality and above par services to our clients in order
to achieve not only customer satisfaction but provide customer
delight. We pledge every time to achieve high levels of
reliability, efficiency and performance of our service. We will
try to achieve maximum customer satisfaction through a continuous
feedback mechanism and continual improvement of systems of
quality management.
We hope that we will be known for our ability to provide
infrastructure and application environments combined into a
single package to meet in an integrated manner, the ICT needs of
our customers.
Objective:
To promote an online transaction services to the people of
Bangladesh with a greater precision and help Banglalink to
increase size and reliability of the customers to a large extent.
Service Features:
Our project will provide a company and individuals to negotiate
with other companies and individuals regarding whatever they need
to sale, purchase and auction their products and services through
online transaction process
Our service will reduce capital expenditures of a company that
uses their services, increase customer service, increase sales
opportunities, increase revenues, and improve inventory
management. Customers will benefit by having a convenient, easy
way to return their purchases as well as the ability to track
their returns.
Business structure
The proposed business structure would be a SBU of Banglalink
which is the second largest cellular service provider in
Bangladesh. As of April 2012, Banglalink has a subscriber base of
25 million
Business Operations:
In the first two months the main operational activities will be
to secure funding, infrastructural development and arrange legal
requirements. In the following month the firm will go for
marketing campaign. At the fourth month it will run in full
swing.
Source of Funding:
The projected value of NetBazaar. is estimated in total 1 core
taka, in which 67 lakh taka will be provided by the company
itself and rest of the amount will be financed by the a private
Bank.
67%
33%
Capital
EquityDebt
Figure 1 Capital Structure
Product and service:
Net Bazaar is a user generated virtual marketplace, accessible by
mobile phone or PC. Its main activity will be focused on selling
and buying new or used product to which a customer can maximize
his/her utility that will be conducted through SMS code and
messages.
Buying and selling of new and used products:
Automobiles, Electronic products, home appliance, office
appliance, home furniture, office furniture, sports, eBook,
agricultural products, tutor, pet, to-let solutions, real estate,
IT solutions, Industry products, Social sites, Job alert,
servicing zone and other products.
.
In the part of Sellers use their mobile phone interface to post
goods they want to sell. This information is stored on the
central server. The sellers have the ability to-
Post their selling item.
Change their item and update.
Delete their listed goods after sell.
Post blog.
Share information.
Rating buyers.
Share Articles.
Create groups.
Chat to desire persons
In the part of Buyers use the cell phone to search for the goods
they want to buy. They have the option of optimizing their search
by-
Option of optimizing (price, brand, location).
Bookmark favorite items and return to them letter.
Add comment on the product.
Ask for bargain.
Rating.
Chatting.
Blogging.
Net bazaar is a service where mobile phone used as a 24 hours
electronic market place. It has also some exclusive functions
like social Blogging, chat with people, people can create group
as business group, student group, teachers group, share articles
also customers can rate themselves (buyers and sellers), who
earned trust on buying selling process. In now people want faster
solution in their desired work and this Net Bazaar will provide
faster way to do that any time anywhere.
Business Environment:
Electronic commerce (e-commerce), or the conduct of commercial
transactions over electronic networks has been seen as a way of
reducing hostility in the marketplace; this allows larger volumes
of transactions to take place, effectively expanding markets, but
also opening up entirely new markets allowing marketers (large
and small) to use the Long Tail. In developed economies, e
commerce has taken the form of commercial transactions being
facilitated over the Internet, but recently has been extended to
mobile networks as well, owing to their growing ubiquity. In
emerging economies poor Internet penetration and the lack of
secure payment mechanisms have slowed the growth of e commerce.
An electronic marketplace (e marketplace) operating in Bangladesh
for the past two years, which allows buyers and sellers to
exchange information on products and services for selling, by
simply using mobile phones. There are various types of ICT-based
applications which can be grouped under the generic term “e
marketplace” such as online auctions, trade leads, requests -for-
quotes and on-line catalogues. However, as this generalization
could imply that all applications support on-line buying and
selling, and that transactions are actually completed online; as
such, in this paper, we use the term to denote any type of
application which electronically supports commercial transactions
at any level.
While there exist a variety of similar e marketplaces operating
in Bangladesh like Cell Bazaar, Click BD. Main competitors are
Cell Bazaar:
Bangladesh’s top mobile phone operator GrameenPhone, and USA-
based Cell Bazaar have introduced a service connecting buyers and
sellers in an electronic marketplace over the mobile phone. It’s
like a more direct, more primitive e-Bay, a phone-based
equivalent of newspaper classified advertisements. The Cell
Bazaar concept was developed at the MIT Media Lab by Kamal Quadir
and he later founded a company and established a partnership with
Grameenphone. The service enables sellers to list details of
their products, produce or even services in a database while
buyers can look for any of this information through SMS. It will
not handle transactions, but is simply put buyers and sellers in
contact with each other via mobile phone or PC.A Brief Overview
Cell bazaar is a user-generated virtual marketplace, accessible
by mobile phone or PC. Cell Bazaar works through SMS code and
messages; users enter the code 3838 and can post items to sell or
buy, as well as obtain market prices. This code can also be used
to hear marketplace postings through voice service, enabling
users to browse by 8 categories: Jobs, Mobile Phones,
Agriculture, Motorcycle, Car, Electronics, Computers, and To-Let.
Cell Bazaar is also WAP-enabled (Wireless Application Protocol),
a “next generation” mobile phone technology that provides a
faster way of browsing the online marketplace. The marketplace is
also available online for anyone with a web browser.
Click BD:
ClickBD.com started its operations in April 14, 2005 as the first
e-commerce portal in Bangladesh. Click BD is an online
marketplace where anyone can sell or buy almost anything. The
site has a strong and growing community of users who trade in a
wide range of item categories including Electronics, Cameras,
Phones, Computers, CDs, Mobiles, Fashion Accessories, Music, and
Travel. Through a world-class technology infrastructure Click BD
enables & simplifies e-commerce for Bangladesh's ever expanding
online community. People spend more time on Click BD than any
other Bangladeshi site, making it the most popular site of the
country. Click BD encouraged young generation to earn money from
selling goods using the power of the Internet.
Net Bazaar differentiates them by providing extra facility like
people can share their thoughts, research paper with Net Bazaar
members. There would be E-books for students, teachers can create
their community in it, share blog, chat with people like social
networking, Rate trustworthy customers. It’s a full package of
site where people can get every desired item in just a click.
People from all over Bangladesh will buy and sell on Net Bazaar.
Currently, over 90% of all listed items will sell on Net Bazaar,
giving buyer and seller the convenience of online trading. People
come to Net Bazaar to buy and sell items in an array of
categories from antiques, art, and collectibles to practical
items like used cars, mobiles, laptops, clothing, books, CDs, and
electronics. Buyers have the option to purchase items in an
auction-style format or items can be purchased at a set price
through a feature called Fixed Price or by Bargaining Price. Net
Bazaar is the place to buy what people want, sell what they have,
and make new friends while they are at it.
Net Bazaar is creating a place where people can offer goods for
sale and anyone in the world can buy at a fair price. It will be
a market of people, where their next-door neighbor can compete
with a large corporation and have an equal chance of success. It
will be a place that constantly adapts and improves to meet the
needs of buyers and sellers. Trust, honesty and efficiency will
be rewarded. In the end, our market will be so large and open
that people will be able to find almost anything they can
imagine. And every other way to buy and sell things will seem
inferior. Our customers are mainly mobile phone user in
Bangladesh, who doesn’t have the opportunity to sell their
product in the market. Also main target customers are the young
generation who are very enthusiastic, rapid in their work.
Industry Background of E-Commerce:
E‐commerce or electronic commerce is the conduct of financial
transactions by electronic means. With the huge success
of commerce on the Internet, e‐commerce usually refers to
shopping at online stores on the World Wide Web, also known as e-
commerce Web sites. Electronic commerce or ecommerce is a term
for any type of business, or commercial transaction that involves
the transfer of information across the Internet. It covers a
range of different types of businesses, from consumer based
retail sites, through auction or music sites, to business
exchanges trading goods and services between corporations. It is
currently one of the most important aspects of the Internet to
emerge. E-commerce allows consumers to electronically exchange
goods and services with no barriers of time or distance.
Electronic commerce has expanded rapidly over the past five years
and is predicted to continue at this rate, or even accelerate. In
the near future the boundaries between "conventional" and
"electronic" commerce will become increasingly blurred as more
and more businesses move sections of their operations onto the
Internet. Electronic commerce generates competition, revenue and
profit. It also creates flows of goods and services and hence
traffic. Subsequently, it can act as an incentive for investors
to finance locally available infrastructures, connectivity and
bandwidth. However, before this virtuous circle can be initiated,
the magic triangle access, trust and know how an essential
precondition for the start up and expansion of electronic
commerce, must be firmly established between both the public and
the private partners involved. This magic triangle can only be
set in place if it receives the full and active support from the
various stakeholders.
Types of E‐Commerce:
E‐commerce is the process of buying and selling of various
products and services by businesses through the Internet. It
deals various kind of business concern, from retail site of the
consumer, Which includes auction. The main focus is to
concentrate on business substitutes involving goods and services
between various corporations. There are primarily five types
of e‐commerce models.
Business to Consumer (B2C):
B2C stands for Business to Consumer as the name suggests, it is
the model taking businesses and consumers interaction. Online
business sells to individuals. The Basic concept of this model is
to sell the product online to the consumers.B2C or Business to
Consumer has lately gained a big popularity due to simplify an
accelerated way to buy products. B2C is the indirect trade
between the company and consumers. It provides direct sale
through online. For example: if you want to sell goods and
services to customer so That anybody can purchase any products
directly from supplier’s website. Directly interact With the
customers is the main difference with other business model. As
B2B it manages directly relationship with consumers, B2C supply
chains normally deal with business that are related to the
customer.
Business to Business (B2B):
B2B stands for Business to Business. It consists of largest form
of e-commerce. This model defines that Buyer and seller are two
different entities. It is similar to Manufacturer is issuing
goods to the retailer or wholesaler. Dell deal computers and
other associated accessories online but it is does not make up
all those products. So, in govern to deal those products, first
step is to purchases them from unlike businesses i.e. the
producers of those products.
Peer to Peer (P2P):
It is a discipline that deal itself which assists people to
instantly shares related computer files and computer sources
without having to interact with central web server. P2P sometimes
unified with e-commerce type C2C because of the same parties
participating in the transaction. Though it is distinguished by
the process itself P2P is not only an e-commerce type but also a
technology that allows people to share computer files and
computer resources without going through a central web server.
The required software should be installed by both sides so that
they can communicate on the common platform.
M-Commerce:
M-commerce (mobile commerce) is the buying and selling of goods
and services through wireless handheld devices such as cellular
telephone and personal digital assistant (PDAs). Known as next
generation e-commerce, m-commerce enables users to access the
internet without needing to find a place to plug-in. It deals
with conducting the transaction with the help of mobile. The
mobile device consumers can interact each other and can lead the
business. Mobile commerce involves the change of ownership or
rights to utilize goods and related services.
Consumer to Consumer (C2C):
C2C stands for consumer to consumer. Consumer to consumer (C2C)
(citizen to citizen) electronic commerce involves the
electronically facilitate transactions between consumers through
some third party. A common example is the online auction, in
which a consumer post an item for sale and other consumers bid to
purchase it, The third party generally charges a flat fee or
commission. The sites are only intermediaries, just there to
match consumers. They don’t have to check quality of the products
being offered. It helps the online dealing of goods and services
among people. Though there is no major parties needed but the
parties will not fulfill the transactions without the program
which is supplied by the online market dealer.
Now a days can use of technology in each and every sector has
been common. In this era of globalization, we can hardly find any
sector operating without easy technology. So there is no doubt
and it is quite natural that business world will also use
technology effectively as well as efficiently and take the
greatest advantage which is offered by technology. A new horizon
has been open up for trade and commerce namely e-commerce by none
other than one and only internet. E-Commerce entitles the use of
the internet in the marketing identification. Payment and
delivery of goods and services all are done by e-commerce using
internet. So there is a possibility for future growth in this
sector which is fragmented one. The factors that can contribute
to future growth is the technology system that is advanced and
pretty useful to people. In addition internet users are on the
increase on sharp rate and people will feel convenient doing
online transaction rather than moving here and there. Only a few
of the companies are providing the people with the facility and
from our point of view, it still inadequate. It’s our belief that
still there are so many space to serve with a greater extent.
SWOT Analysis:
ClickBD.com
Strengths:
1. ClickBD’s image as the first e-commerce portal in
Bangladesh.
2. World class technology infrastructure which enables and
simplifies e‐commerce for BD’s ever expanding online
community.
3. Targeting people who are interested to do as well as already
doing online business by launching ClickBD Online Stores.
Weakness:
1. They are not a part of any large organization.
2. Their promotional activity is pretty minimal
CellBazaar:
Strengths:
1. First one to bring the concept of mobile dealing.
2. Partnership with the largest telecom company.
3. Attractive web design.
Weakness:
1. Lack of awareness about the site, very small number of
people from rural area know about the activities of the
organization.
2. As a pioneer, they have not created enough space on peoples
mind
Bikroy.com
Strength:
1. Strong network in the whole country.
2. Home delivery.
3. Strong branding and promotional activities.
Weakness:
1. They don’t have many option to choose from under the sub
categories for example the CDs, they are trying to sale are
three to four years old and the lack with the latest
product.
2. Unattractive web design, Lack of creativity.
Porter’s five forces:
Porter’s Five force Model of E‐ Commerce Industry
Porters five forces model can be applied in the e- commerce arena
of Bangladesh.
Threat of New Entrants (High):
Since the e‐ commerce market has no entry barriers from the
government or technological perspective, it is very attractive
for other firms to enter into this market. Also, the nature
of Business itself does not have any cost, so it is hard to
achieve or realize the economies of scale. As we know, the
technology is improving every second or even minute, which means
people can create a website in five minutes. Therefore, the
threat of new entrants is very high.
Rivalry among Firms (Low):
The rivalry intensity in Bangladesh can be classified as very
low, as we can see that there are only few firms that are
generating revenues, there are many opportunities due to the Few
competitors in the market. The amount of the firms is still
insufficient when we Compare with the population or the Internet
user in Thailand. Also, when we think about the e‐commerce
market, we have to think more globally because the consumers Are
everywhere all around the world. Since there is not much
competitions in the strategic Group (one is leader and others are
follower; like Clickbd, Akhoni.com, Bdjobs are the market
leader), the rivalry among firms are still low.
Bargaining power of supplier (low):
Human resource is the main supplier in the e-commerce market they
need a web site to be created by someone or buy a solution
package. Therefore in the technological age, the bargaining power
of this suppliers, I,e programmers are very low because they can
outsource to all around the world.
The other supplier to the e-commerce industry is the host who
provides the space, for the websites on the internet. They are
thousand of host who provide the spaces, and they are not
concentrated, therefore each website don’t have stick with the
same host.
Bargaining power of Buyers (moderate):
In the internet market, the environment would be the same as the
brick and motor stores. However, the customers have high
bargaining power because they can choose any shop in the internet
world wide. Also, they can substitute the place for the
transaction to the offline market as well. Fro example in the web
site like ClickBd and CellBazaar often the buyer exert their
bargaining power.
Threat of substitute:
There is no technology that can substitute the internet so far in
the market. Even analog signal that use to send the Television or
Radio signal are not the main threat. The main substitute that
exist is the break and motor stores, which they can change or
move their place to be on the internet. Therefore the e-commerce
industry has low threat of substitutions.
Marketing Strategy of competitors:
CellBazaar, ClickBD and bikroy .com do their marketing through
Television Ad
Sticker
Booklets
Billboard
KEY SUCCESS FACTORS
This section examines key success factors for the emergence of
CellBazaar in Bangladesh, particularly as a marketplace capable
of conducting electronic transactions through simple
communication technologies such as SMS, a feature that sets it
apart from many other e marketplaces available.
High mobile penetration but low internet penetration: GP get
this benefit, because Bangladeshi rural people are less
known to internet than mobile.
Affordable SMS price: They are also priced their product
which is affordable to their customer
Advertising: All existing e-commerce industries advertising
is overall good.
Exclusively partnered with strongest operator (GP):
CellBazaar have strong partner like GP. So they have strong
chance to achieve great brand value.
Market Share: CellBazaar and ClickBd is the first e-commerce
industry and coming each by new concept that’s why their
market share is large than other
Security: All e-commerce industry provide greater security
to their customer by keeping their information safe.
Entrepreneurial culture: They are growing consciousness
among people by easing their selling and buying process.
Product Quality.
Financial Position
Customer Loyalty
National Expansion
Market Analysis:
In Bangladesh there are approximately 5000 professionals engaged
in the ecommerce industry and the size of Bangladesh e-commerce
market has been estimated to be more than TK. 300 core in a year.
E--commerce in Bangladesh growth rate is approximately 6%. E-
commerce market is increasing day by day in our country.
Government wants to digitalize every sector in our country. So
it has a great influence in the field of e-commerce market. On
top of that, youth are very much enthusiastic on online trading.
Mentioned above information implies that e-commerce market in
Bangladesh is growing fast. At present, though our gather
information is showing that it is a niche market in our country
but it can be turn into mass market in near future. Of course, it
is a great opportunity for us to penetrate in this market and by
the way the market will expand. So, we reckon that there is a
potential demand our service in this market.
Our target market is the divisional cities and district towns
throughout the country. From this target market our target
customers are exclusively BanglaLink users. Besides, other people
can access our site and can take their necessary service from our
e-commerce site. Our target customers have some mentionable
characteristics such as they have their cell phone, have
eagerness to sell or buy in online market, intention in early
transaction.
Target marketing: We basically target all customers of Banglalink
and young generation who usually use the internet like WEB, WAP
etc.
Geographical Segmentation: under the geographical segmentation we
would like to offer our services to nationally, cities and
suburban.
Nationally: People of Bangladesh.
City: 7 divisional cities of Bangladesh.
Suburban: 65 district towns of Bangladesh.
Demographic Segmentation: we want to segment our target market
based on age, income level, occupation, education and so forth.
Age: we want to provide our service especially to the following
age 18- 50 years. But the people who are below 1 8 years can
access our site with the help and consent of their guardian.
Again people above 50 years can use our site according to the
necessity. Actually our intention is not to deprive others from
taking our services and omit their needs.
Income Level: we want to provide our service to them whose income
is ranging from 1000 to 200,000 or more.
Occupation: we offer our service to students, service holders,
businessman, and farmers and so on.
Education: people who have the basic knowledge about our service
and who are able to use our site to perform their necessary
transactions.
Behavioral Segmentation: Behavior is the science of using
psychology and demographics to better understanding consumers.
Behavioral segmentation: consumers are divided according to their
lifestyle, personality, values and social class.
Social Class: people who use our site would be from middle class
(low cost product such as, necessary goods, and farmers’
products), upper middle class (TV, fridge, mobile phone and so
on), upper class (Car, Smart phone, LED TV and so forth).
Values: People who have positive image on online trading and
willingness to trade on online marketplace.
We reckon our provided service add more value and can solve the
problem of our customer than our other competitors with similar
offering. Because first of all our customers do not face any
kind of access barrier in our site. We make it very simple for
our customer .They can access our site through internet, EDGE
Enabled Handset as well as cell Phone SMS process. On top of that
customers can access our site by registering a unique number
(161971) from any operator .whereas customers can not access same
site of our competitors because they requires internet
connections, EDGE cell phones, same operator (e.g. cell Bazaar-
can access only Grameenphone operator).That is why customer show
eagerness in using our site for their necessary transactions.
Moreover customer can provide their necessary comments like
transactions experience, make customer fan club, etc which
provides right to customer to express own feelings, can chat with
their dear and near ones ,finds their friends in our site which
enables them create social network. It is not possible in case of
other same service offering e-commerce site. Customers can use
our site solely to chat with their friends. The ideal value
proposition ours is to make our site commodious and enjoyable
towards our customers; lessen customers all probable problems as
well as we hope by using our site customers can easily
differentiate our e-commerce site from our competitors which
would most attractive easy using for them and also helps them
choosing.
Our company’s value proposition would be “Market is next to you”.
Sales and Marketing PlanNetBazaar Selling Procedure
Using SMS, WAP technology or the Internet, buyers and sellers can
find each other at NetBazaar. A farmer can easily sell his or her
products by sending simple text messages, just as a
Teacher can offer his or her services. Users pay only the
standard SMS or GPRS charges for accessing the service, and there
are no monthly fees only posting fees for selling. It works on 4
synchronized platforms:
SMS
SMS (Short Message Service) has been phenomenally popular since
its introduction in Bangladesh. NetBazaar leverages the simple,
widespread power of SMS to bring the market to your phone. By
sending simple text messages to 1111, one can post items for
sale, look for items to buy, and obtain current market prices of
products or services.
WAP
WAP (Wireless Application Protocol) is the next generation of
mobile phone technology. 50% of all mobile sets in Bangladesh are
already WAP enabled, and this number is growing rapidly. WAP
provides an even faster experience as you browse a simple graphic
menu to access the entire marketplace.
WEB
WEB version shows the entire market at a glance on computer
screen. Anyone with internet access can browse the market, and
post items for sale. Items posted by WEB, WAP or SMS are
instantly visible to users of any platform. WEB platform also
makes the local mobile based market available to an international
audience.
VOICE
Any Banglalink users can dial 1111 and listen to the latest items
on the market in Bengali. After dialing 1111, users choose from
those categories: Jobs, Mobile Phones, Agriculture, Motorcycle,
Car, Electronics, Computers, and To-Let. Every few hours, users
will hear new information through this service.
Most services like NetBazaar that work over SMS operate with
premium SMS pricing. Premium SMS refers to SMS for which users
pay a premium over standard messaging costs, with the revenue
shared between service provider and telecommunications operator.
Some development projects pay the premium themselves rather than
making users pay, but in either case, a premium is charged by
telecommunications operators. SMSs sent to NetBazaar cost a user
the same price as a standard SMS. Banglalink, NetBazaar's
partner, shares a percentage of the messaging revenue with
NetBazaar. NetBazaar also gets revenue from users that access its
WAP and voice services similarly another source of revenue that
services do not usually access. Of course, this revenue sharing
model would not be possible without a strong partnership with
Banglalink, Net Bazaar 's only core partner.
Sales & Marketing Plan:
Target marketing: We basically target all customers of Banglalink
and young generation who usually use the internet like WEB, WAP
etc.
Why people use our site: We provide some extra feature like
sellers rating, social site (Chat), job alert, career guidelines,
E-Book etc. People can find everything what they want from e-
commerce they have not to search another site. Our human nature
like is that we want everything in one place if we get and our
servicing also low. Our site also design for friendly using there
all indication will be given where they can find what we also
provide pop up message for the users which help them to find what
they want.
Human Resource Planning: We need one marketing executive and also
one marketing officer and two sales executives who will work
under the marketing executives. Sales executives and marketing
officers help the executive in promotional activity. Marketing ExecutiveMarketing OfficerSales Executives
Others Promotional Activity: We also do other promotional
activities like Direct E-mail, direct messaging, pop up
advertisement on the other site etc.
Markwting Mix: This section will describe about how we will reach
to our customer by our product. It also talk about what is our
product, how we will place it, how we will price product and our
promotional activity.
.
Product: We provide basically service and helping our customer by
providing them facility to bring them together in a place. We
help the customers to get his products appropriate price and also
fresh product by clear bargaining among seller and buyer where
seller and buyer directly bargain with each another. We also
provide social facility like chatting, blog sharing etc. We
describe our all product below. Those who want to take voice call
information or message alert they have been charged for message
or call.
PromotionPricePlaceProduct
To-Let solution: We help them by providing to let solution like
if anyone post in our site for To-Let then we send email,
message who want to rent then we charge price from them it will
be charged 200 from each party if he post in our To-Let blog
Automobiles: People can also buy or sell their product like car,
motorcycle, heavy vehicles, motor parts, bus , microbus etc by
giving advertise in our automobile blog.
Real Estate: This also work when buyer and seller post in our
real state blog then we also do sending message to both party and
we help them to contact but we charge seller.
IT solution: We also provide IT solution also like internet
provider give Ad in our blog then we charge from them for
advertising. In this blog, people can also give post for selling
computer and its parts, modem etc. IT related product. We charge
5tk for each second hand product.
Industry product: Garments product, imported product etc all
industrial products advertisement can give in this blog we charge
.5% from products total value. There seller must be note about
his/her products quantity and amount
Social site: This site is free for all register customers where
they can share their thought. They can also provide their writing
who got more like in two months then we will publish this in the
newspaper.
Job Alert: People may also get job alert from this blog but for
getting this they have to pay extra service and its amount is 10
Tk only
Servicing Zone: Its one zone where service provider can give
their Ad and can get the customer through it. Ad also be charged
50Tk
Pet: People can also get pet like dog, cat etc. because pet
seller can also give their Ad in this blog
Tutor: People can also get tutor alert through registration.
E-book: People can also get E-book facility through the specific
charge of this book.
Agricultural products: Farmers can also sell their product
through registration, other ad and post is free we give this
facility to promote to use Banglalink and Agriculture.
Electronic Product: People can sell and buy the new product and
second hand electric product by posting their but charge will be
different in case of new and old. Electric products like TV,
Fridge and AC etc.
Other Products: In this blog they can give post for other
products which is not fall above categories.
Place:
Target marketing: We basically target all customers of Banglalink
and young generation who usually use the internet like WEB, WAP
etc. We also provide fast, easy website which swiftly finish the
task.
Distribution Channel:
Price:
Product list Price listTo-Let solution 100 Tk
Pet 50 Tk
Tutor 10 Tk
Agricultural products Free (SMS charge only)
Electronic Product 0.5% (Total amount New) and
0.3% (Old) Other Products 5 Tk
Real Estate 500 Tk
IT solution 50 Tk
Industry product 100 Tk
ServicesConsumer
Social site Free
Job Alert 10 Tk
Servicing Zone 10 Tk
Automobiles 1000 Tk
Promotion:
Television Advertising: Television advertising is the main
strategy for attracting the market. We have also plan to expand
into all rural, suburban and urban area that’s why we telecast
our Ad in most popular NTV and BTV. We select BTV for rural area
people where satellite connection doesn’t exist.
Booklet: Booklet also another way to promote our product so we
decide to provide booklets in the Schools, Colleges,
Universities, Local markets and mosques etc. where all the
information and instructions have been given.
Radio Ad: Now FM radio is becoming most popular that’s why we
have to focus on this section and we will also broadcast radio ad
Sticker: We also print sticker to stitch on the vehicles glass
( Bus, Car, Microbus, CNG etc), saloon, hotel etc.
Billboard: Billboard is another attractive way for marketing
because large billboard draw attention of people. So we decide to
place the billboard in the urban area where dense people live
like Dhaka , Chittagong and Sylhet etc.
Research and Development:
HTML: HTML is a simple, universal mark-up language that allows
Web publishers to create complex pages of text and images that
can be viewed by anyone else on the Web, regardless of what kind
of computer or browser is being used. All you really need to
create Web pages is a simple text editor and a basic
understanding of HTML.
Figure 2: Basic Structure of a HTML Page
CSS: The technology behind style sheets is called CSS, which
stands for Cascading Style Sheets. CSS is a language that defines
style constructs such as fonts, colors, and positioning, which
are used to describe how information on a web page is formatted
and displayed. CSS styles can be stored directly in an HTML web
page or in a separate style sheet file. Either way, style sheets
contain style rules that apply styles to elements of a given
type. When used externally, style sheet rules are placed in an
external style sheet document with the file extension .css.
Figure 3: Layout Techniques in CSS
JavaScript: JavaScript is a client-side scripting language for
web pages. It can include JavaScript commands directly in the
HTML document, and the script will be executed when the page is
viewed in a browser.
Figure 4: JavaScript Alert PopUp Message
jQuery: jQuery is a coding language that is a branch from
JavaScript. jQuery works like JavaScript where its used to help
with interaction and effects with your development code. jQuery
hasn’t been around very long, it was release in January 2006 and
only on version 1.4.0. jQuery is a new and exciting technology
that is catching on quickly and making the internet more
interactive and enjoyable.
The best featuring for jQuery is the effects you can accomplish,
with less code than what it would take with JavaScript. Most
common jQuery effects are drop down menus, drag and drop
elements, animations and form validation. Developers have also
connected this with other coding languages like JSP, ASP, PHP and
CGI.
MySQL: Database programs have many different methods for storing
and retrieving data, as well as for organising the stored data on
the computer. One popular way for accessing data, both to store
and to retrieve it, is to use a computer language called "SQL"
(often pronounced as "sequel"). SQL was specially designed for
database access. There are many databases that support the use of
SQL to access their data, among them MySQL.
PHP: PHP is a programming language that you can use to write Web
applications. A Web application can be anything from a simple
"contact us" form through to a fully-fledged blogging system,
online store, or forum system.
It runs on the Web server. Most Web programming languages are
server-side, but some, such as JavaScript, are client-side, which
means they run on the Web browser. Server-side languages give you
more flexibility as they can do many things that are hard to do
with JavaScript — for example, working with files and databases,
or manipulating images. That said, JavaScript is coming along in
leaps and bounds these days (as these examples show).
Ajax: Ajax (sometimes called Asynchronous JavaScript and XML) is
a way of programming for the Web that gets rid of the hourglass.
Data, content, and design are merged together into a seamless
whole. When your customer clicks on something on an Ajax driven
application, there is very little lag time. The page simply
displays what they're asking for. If you don't believe me, try
out Google Maps for a few seconds. Scroll around and watch as the
map updates almost before your eyes. There is very little lag and
you don't have to wait for pages to refresh or reload.
Database Architecture: Privatevarsity.com is using relational
database. A relational database is a system in which data are
stored in tables of rows (records) and columns (fields). The
defining characteristic of a relational database is that the full
data set is broken down into multiple tables (each representing a
single subject) and that relationships can be established between
those tables through the use of key fields. Structured Query
Language (SQL, sometimes pronounced "sequel") is used to
manipulate the data.
Payment Process: For generating money Privatevarsity developing
some payment option for their user. Those will be launch in
future. In those option include Paypal Integration, Recharge
Card, Pay through SMS (from Grameen Phone & Airtel).
Overall Network Architecture: The entire network which will be
responsible for the proper execution of this current website is
shown in the following diagram:
Server Configurations: Privatevarsity is using VPS server that
using X2 Linux and other server configuration in below:
1x CPU Cores 10GB Storage384MB Guaranteed RAM 2 Dedicated IPs500GB Data Transfer Self-Installed Control
Panel
Figure 11: Web Server Control Panels
Server Security: Privatevarsity had domain security scanning, a
new feature that scan all sub-domain name and detect any malware
infection on index web file. Once the virus or malware being
detected, security team will remove those security threats.
WhoisGuard: Its protected accurate contact information from
public database called the "WHOIS" database.
SSL Certificates: SSL certificates installed on Private varsity
web server. Therefore, an end-to-end SSL installation support is
possible.
Operational Plan:
Operational plan implies that how an organization runs its
business and implement its strategic plan. For this first of all
we would like to set our business location at Gulshan, close to
our mother business organization Banglalink Headquarters. Then we
set up server which is very important to operate our e-commerce
business. Again we will purchase computer, furniture and other
necessary equipments that necessary for our e-commerce business.
We reckon that those server, website and equipment would be handy
NetBazaar.com SellerFrom All over the Bangladesh
BuyerFrom All over the Bangladesh
to run our business properly and to provide best services to our
customers.
Our e-commerce site remains open 24/7 for our customers. For this
we use high efficient technology and skilled workforce.we
introduce every time new technology to support our operation.
Because high speed server and technology is essential for proper
operation and to provide best facility to our customers.Again to
run our e-commerce site more smoothly we establish highspeed
server in the prime location of every divisional cities and
district towns.
Another important element for proper operation of our e-commerce
business is geographical location. Our e-commerce business is
customer centric business. So ,we want to run business operation
where our customers are available. Because if we operate business
such geographical location close to our customers.as a result our
e-commerce site would be quickly familiar to our customers and
they show enough interest to perform transactions by using our
site.
Our business is web related so, we need workforce who are skilled
in server operation, website design, search engine optimization
and skilled in software development. So to run our operation
properly we appoint skilled workforce.
We charge prices for our customers only when they place an ad in
our site and people who access our site need to register.
Buyer Seller
Goods
Delivery PointDelivery Point
NetworkingIMFiles Sharing
Rating Each Other
Monthly Rate for Advertisement
For Local and Foreign Clients
Location Size (width& Height in
Pixel)
Total Pixel Rate in TK Total Amount(per Month)
TKHome Banner 1
315×60 18900 5tk 94500
Home Banner 2
315×60 18900 5tk 94500
Top Banner 473×75 35475 6tk 212850Middle Banner
468×70 32760 5tk 163800
Right Panel 1
300×57 17100 5tk 85500
Right Panel 2
300×57 17100 5tk 85500
Right Panel 3
300×57 17100 5tk 85500
Right Panel 4
300×57 17100 5tk 85500
Left panel 1
280×60 25200 5tk 126000
Left panel 2
280×60 25200 5tk 126000
Left panel 3
280×60 25200 5tk 126000
Left panel 4
280×60 25200 5tk 126000
Spot Banner 1
468×70 32760 3tk 98280
Spot Banner 2
468×70 32760 3tk 98280
Management Summary:
Business Model and Structure:
The company plans to locate its headquarters in a metropolitan
area that can provide access to a large pool of high-tech labor
force, current e-commerce intelligence, and sources of financial
capital. The location should ensure the best logistics when
reaching existing and potential clientele, as well as strategic
partners. Operations in which the company cannot develop core
competencies should be outsourced. A close proximity to
outsourcing companies should be maintained. The headquarters will
initially host the entire executive team, sales force, and staff.
As company progresses through its growth stages, sales regions
will be assigned for various parts of Bangladesh and either in-
field sales representatives are placed or distributors assigned.
Presently, NetBazaar will be going to be headquartered in Gulshan
01, Dhaka.
Organizational Structure:
Those activities that are not crucial to the corporate success
(i.e. payroll) will be outsourced or subcontracted. Below are
brief summaries of major responsibilities for corporate officers.
Managing Director: oversees the overall strategic direction
and progress of the company. Specific areas include
operational soundness, financial stability, and long-term
well-being of the corporation.
Chief Executive Officer: the main responsibility is to
maintain a strategic fit between the corporate resources and
external factors. Responsibilities include running of the
overall day-to-day operations, technological and operational
soundness, and financial stability.
Director of Finance and Operations: responsibilities include
financial oversight, safeguarding of assets, and human
resources management.
Director of Information Technology: responsibilities include
overall technological efficiency, software development, and
information control.
Director of Sales and Marketing: responsibilities include
sales generation, marketing programs development, and public
relations.
Organizational Chart:
Financial
Plan:
Executive Of ITIT OfficersIT officersSales ManagerPersonnel Plan
Year 1 Year 2. Year 3
All Departments10,000,0
00
$1,960,
000
$4,105,0
00
Other 0 0 0
Total People 5 40 80
Total Payroll 10,000,
000
1,960,00
0
4,105,00
0
The statements incorporate two rounds of venture capital
investments of 9000000 total, plus access to additional 200000
for cash flow purposes. The statements do not include any funds
raised during the proposed IPO. Any revenues from advertising,
affinity, consulting, and partnership programs were omitted.
Year-end is December 31.
Projected Cash Flow
The following chart shows monthly cash balance and cash flow. The
table shows the expected cash flow for the first twelve months of
operation, with yearly estimates thereafter. Capital expenditures
include computer equipment and technology & software investment:
Computer Equipment: represents 20% of the current fixed
corporate costs. In 2013, it represents 1500000 from the
fixed corporate costs.
Technology & Software Investment: represents 60% of the
current fixed technology costs. In 2013, it represents the
5000000 of the fixed technology costs.
Pro Forma Cash Flow:Year 1 Year 2 Year 3
Cash ReceivedCash from OperationsCash Sales 5000000 8000000 12000000 Cash from Receivables 0 0 0 Subtotal Cash from Operations 5000000 8000000 12000000
Current Borrowing 300000 600000 1000000
Other Liabilities (interest-free) 0 0 0
Long-term Liabilities 1000000 1000000 1000000 Sales of Other Current Assets 0 0 0
Sales of Long-term Assets 0 0 0 New Investment Received 400000 800000 1000000 Subtotal Cash Received 6700000 10400000 15000000 Expenditures Year 1 Year 2 Year 3Expenditures from OperationsCash Spending 2000000 4000000 6000000 Bill Payments 300000 700000 1000000 Subtotal Spent on Operations 2300000 4700000 7000000
Principal Repayment of Current Borrowing 300000 600000 1000000
Other Liabilities PrincipalRepayment 100000 200000 300000
Long-term Liabilities Principal Repayment 0 0 0
Purchase Other Current Assets 100000 200000 300000
Purchase Long-term Assets 5000000 1000000 1000000
Subtotal Cash Spent 7800000 6700000 9600000 Net Cash Flow (1100000) 3700000 2400000
Break-even Analysis
The following table shows our estimated monthly break-even pointto be approximately Tk. 102000.
Break-even Analysis
Monthly Revenue Break-even 102000
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost 102000
A calculation of the sales volume (in units) required to just
cover costs. A lower sales volume would be unprofitable and a
higher volume would be profitable. Break-even analysis focuses
on the relationship between fixed cost, variable cost (or cost
per unit), and selling price (or selling price per unit).
Fixed Costs
Cost that do not change when production or sales levels do
change, such as rent, property tax, insurance, or interest
expense. The fixed costs are summarized for a specific time
period (generally one month).
Variable Cost (Per Unit Cost)
Variable costs are costs directly related to production units.
Typical variable costs include direct labor and direct
materials. The variable cost times the number of units sold
will equal the Total Variable Cost. Total Variable costs plus
Fixed costs make up the total cost of production.
Selling Price (per unit price)
The price that a unit is sold for. Sales Tax is not included
the selling price and a sales tax paid is not included as a
cost. The Selling Price times the number of units sold equals
the Total Sales.
Break Even Point
The sales volume (express as units sold) at which the company
breaks even. Profits are $0 at the breakeven point. The
breakeven point is calculated by the following formula: Break
Even Point = Fixed Costs / (selling price-variable costs).
Time Period
The fixed costs are summarized for a specific time period.
The per unit variable cost is not dependant on a specific
period of time.
The per unit selling price is not dependant on a specific
period of time.
The Break Even Point is expressed the number of units,
over a specific time period that must be sold to obtain a
Net Profit of $0. The time period the units must be sold
is always the same as the time period of the fixed costs.
Typically the time period is monthly; however it could be
Yearly or even Hourly. For example, a farmer seeking the break
even on an annual corn crop would choose a yearly time period.
The farmer would add up the fixed costs for the whole year and
the break even sales volume would be expressed as a yearly
sales volume.
The text that is written in the time period field is copied to
the title of the Break Even Graph and Break Even Report. If
you leave the field blank then nothing will be copied.
Break Even Calculation:
Assume the following:
Fixed Costs:Monthly Rent 100000Insurance (24000 per year 24000/12 months = 2000) 2000
Total Monthly Fixed Costs 102000
Variable Cost:Materials 5Labor 7Total Variable Cost 12 Selling Price: 25
Break Even Point CalculationBreak Even Point = Fixed Costs / (selling price - variable costs)
Break Even Point = 102000 / (25-12)
Break Even Point = 102000 / 13
Break Even Point = 7846
To break even the company must sell 7846 units per month.
If the Company just broke even, then its Profit and Loss Statement would look like the following:
Monthly Profit and Loss StatementSales
Gross Sales (25 per unit times 7846 units) 196150
Less Cost of Goods Sold
(12 per unit times 7846 units) 94152
Net Sales 101998 Or 102000
Expenses
Rent 100000Insurance 2000Total Expense 102000Net Profit 0
Projected Profit and Loss:
The table below shows the profit and loss statement for
NetBazaar. The itemized costs for fixed technology, corporate and
advertising are reflected in the sales and marketing row in the
table:
Fixed Technology Costs: represents a percentage of revenues
allocation for all fixed computer and Internet-related
developments and charges. In 2013, Tk. 2000,000 is allocated
for the proprietary software development, Tk. 1000,000 for
the website design, and Tk. 500,000 for systems integration.
Fixed Corporate Costs: represent a percentage of revenues
allocation for all fixed corporate cost associated with
office related charges. In 2013, Tk. 600,000 is allocated
for initial sales force hire, Tk. 500,000 is allocated for
hiring and training expenses, and another Tk. 450,000 is
allocated for the office setup and purchase and lease of
necessary computer equipment and infrastructure.
Advertising: represents a percentage of revenues allocation
for advertising in all media. In 2013, Tk. 2000,000 is
allocated for the industrial marketing campaign. In the
subsequent years, the much larger budgets include
allocations for TV, Newspaper, advertising.
Sales & Marketing: represents a percentage of revenues
allocation for marketing and selling activities, including
commissions paid on sales. In 2013, Tk. 1000,000 is
allocated for the initial sales and marketing related
activities.
Research and Development: represents a percentage of
revenues allocation for R&D activities. In 2013, Tk. 350,000
is allocated for testing and fine-tuning of the computer
systems and programs.
General & Administrative: represents a percentage of
revenues allocation for expenses associated with running a
corporation. In 2013, Tk. 200,000 is expensed against the
initial set-up, legal and accounting fees, etc.
Depreciation: represents a depreciation on all capital
investment; straight-line depreciation over 25 years.
Projected Balance Sheet
The Balance Sheet shows solid growth in both sales and net worth.
Pro Forma Balance SheetYear 1 Year 2 Year 3
AssetsCurrent AssetsCash 1000000 2000000 3000000Accounts Receivable 0 0 0 Other Current Assets 100000 1500000 2000000 Total Current Assets 1100000 3500000 5000000Long-term Assets 5000000 5000000 5000000 Accumulated Depreciation 100,000 100000 100000 Total Long-term Assets 5100,000 5100000 5100000
Pro Forma Income StatementYear 1 Year 2 Year 3
Sales 5000,000 8000,000 12000000 Direct Cost of Sales 2200,000 2300000 2700000 Other 200,000 200000 300000 Total Cost of Sales 2400,000 2500000 3000000Gross Margin 2600,000 5500000 9000000Gross Margin % 52% 69% 75% ExpensesPayroll 1000,000 1100000 1500000Sales and Marketing and Other Expenses 1000,000 1200000 1400000
Depreciation 100,000 100000 100000 Research & Development 350,000 400000 500000 Payroll Taxes 150,000 165000 225000Other 100,000 115000 125000 Total Operating Expenses 2700,000 3080000 3850000Profit Before Interest and Taxes (100,000) 2420000 5150000
Interest Expense 200,000 220000 250,000Taxes Incurred 0 330000 735000Net Profit (300,000) 1870000 4165000 Net Profit/Sales 0.00% 23.38% 34.71%
Total Assets 6200,000 8600000 10100000 Liabilities and Capital Year 1 Year 2 Year 3Current LiabilitiesAccounts Payable 500000 1000000 1500000Current Borrowing 300000 600000 1000000 Other Current Liabilities 100000 200000 300000Subtotal Current Liabilities 900000 1800000 2800000
Long-term Liabilities 1000000 1000000 1000000Total Liabilities 1900000 2800000 3800000 Paid-in Capital 4300000 6000,000 6300000 Retained Earnings 0 0 0 Total Capital 4300000 6000000 6300000 Total Liabilities and Capital 6200000 8600000 10100000
Business Ratios
The following table presents important business ratios for the
business services industry, as determined by the Standard
Industry Classification (SIC) Index code 7389, Business Services,
nec (not elsewhere classified).
Ratio Analysis
Year 1 Year 2 Year 3
Net Profit Margin (-300000/5000000) = -6% (1870000/8000000)=23.38% (4165000/12000000)=34.71%
Return on Asset (-300000/6200000) = -4.84% (1870000/8600000)=21.74% 4165000/10100000)=41.24%
Return on Equity (-300000/4300000) = -6.98% (1870000/6000000)=31.16%(4165000/6300000)=66.11%
Current Ratio (1100000/900000) =1.22 (3500000/1800000)=1.94 (5000000/2800000)=1.79
ROI (-300000/6000000) = -5% (1870000/7000000)=21.71%(4165000/9000000)=46.28%
Net Income Margin: This ratio measures net income per dollar of
sales; it is computed by dividing net income by sales. In year
one Net Bazaar had earned net income margin of (6%) after all
costs and expenses including interest, taxes had been deducted.
In year two and three it was respectively 23.38%, 34.71%.From the
above result we observe that net profit margin There was some
percentage of profit for the shareholder. From 2009 to 2011 net
profit went positive. There were some incentives for the
shareholders.
Return on Asset (ROA): The ratio of net income to total assets;
provides an idea of the overall return on investment earned by
the firm. This ratio is computed by dividing net income by total
assets. In 2009 ROA was 8.95% which shows effectiveness of
management in generating profits with its available assets. In
2010 and 2011 it was respectively 9.39%, 9.93%. As well as from
2009 to 2011 there were negative profit; firm could generate
profits with its available assets.
Return on Equity (ROE): The ratio of net income to common equity;
measures the rate of return on common stockholder’s investment.
This ratio is calculated by dividing net income by total
stockholder equity. In 2009 SAIC earned 21.69% of return on its
equity. In 2010 and 2011 it was respectively 21.69%, 24.81%. From
2009 to 2011 the figure went into positive, the return earned on
the common stockholder investment in the firm were positive. In
2011 return generate from the past years.
Current Ratio: This ratio is computed by dividing current assets
by current liabilities. It indicates the extent to which current
liabilities are covered by assets expected to be converted to
cash in near future. In 2009, 2010 and 2011 it was respectively
1.91 times, 1.87 times, 2.20 times. In 2009 company current
assets comfortably exceeded it’s the current liability but it was
below the standard. In 2010 company current ratio was decreased
it was also below the standard; and in 2011 company current ratio
was increased it was the standard it means firm’s was able to
meet its short term obligation.
Return on investment (ROI): It measures the gain or
loss generated on an investment relative to the amount of money
invested. ROI is usually expressed a percentage and is typically
used for personal financial decisions, to compare a company's
profitability, or to compare the efficiency of different
investments.
Risk Management Plan:
Risk in e-commerce: We are aware that e-commerce is not a fad; we
are here to stay. We do believe that today, it is an
organization’s ability to understand and manage the full spectrum
of risk which further bifurcates the boundary between success and
failure, more so when all government and private organizations
depend, to a large extent, on information technology.
Criticality criteria of e-commerce: we will focus on the
protection of customer interest, total up-time (obviating down-
time), security of payment gateway, credentials during log-in and
log-out, protecting the financial position from damage to
reputation, setting standards of corporate governance, keeping a
record of accountability and avoiding data degradation. Also
included are critical appliances partnership and contracts,
enhanced credibility, external evaluations and audit, 360-degree
management enhancement, business continuity, real-time decision-
making, social responsibility, customer decision-making, loop
inducting, motivation and need recovery, information search,
alternative evaluation, purchase decision and outcomes
(purchase/performance/feedback/execution), repeat purchase and
brand loyalty need to be addressed.
Risks in e-commerce projects: we are well aware of that E-
commerce projects are risk-prone mainly due to complexity and
integration challenges. Business service exchanges, sharing of
database, registry and repository have perpetuated risks. Cost
over-runs, choosing the wrong solution, implementation problems
etc, are also risk factors in e-commerce projects. However, by
using risk management procedures, companies learn to balance
their risks with desired outcomes, hence making projects
successful.
Risk management in e-commerce: Risk is a problem waiting to
happen and the goal of risk management is to make this inherently
risky process of applications development successful and
consistent. A risk management approach is crucial to success in
e-commerce; the need is for proactive risk mitigation both in
planning and in development. In the development of a new
technical system or project, there is a constant need to minimize
uncertainty and errors, which accompany an unprecedented
endeavor.
A project manager can never manage risks to the point of
eliminating them altogether. Only proven methods of risk
management and strategic plans can be used to draw up and
identify or monitor, and thus, mitigate risks.
Broad guidelines: There is a framework to assess, manage and plan
risk involves identification, analysis, envisaging consequences,
planning, tracking and control. The broad guidelines may or may
not follow a sequential pattern as given above. However, the
individual components are explained below.
Identify risk: Risk is assessed at all the stages of a
project; it can be attributed to factors such as non-
executive support or users’ resistance to change. In such a
case, the project team should be proactive and not reactive,
as the risk may reach a threshold and might be
uncontrollable.
Analyze risk: The way to go about it is to analyze,
prioritize and communicate risk so that the project team and
the user are aware, and an alternative or contingency can be
implemented.
Envisage consequences: It is easier said than done, it is
here that most project leaders or even team members forget
about this factor. Forethought and perceptual thinking will
help in evaluating the future of a particular risk factor.
Plan for risk: All the three factors mentioned above obviate
the requirement of planning, which can be classified into
immediate, urgent and essential based on the degree of risk—
high, medium and low respectively.
Track risk: We generally tend to ignore the importance of
tracking risk; documentation is also another tool that helps
in tracking.
Controlling risk: Risk management works hand-in-hand with
project management processes, controlling risk is not at all
difficult if a systematic approach is taken with sequential
preparation and plans.
The most important aspect to mention in risk management is that,
it is not done once, but requires scheduled periods along the way
to ensure that there is a constant re-evaluation of the risk.
Risk management needs to be an ongoing process to be successful.
If you don’t keep up the pressure, the risks will always win.
Hence, it is a ‘go-go’ situation and not a ‘no-no’, ‘no-go’ or a
‘slow-go’ situation.
From another perspective, we see managing risk in e-commerce and
projects under two holistic heads, ‘physical aspects’ and
‘psychological aspects
Physical aspects: The physical aspects include risk management
planning, plan verification, risk forethought, scope of risk
management organization, risk identification, qualitative and
quantitative analysis, proposal planning and monitoring and
control.
Psychological aspects: The psychological aspects are as follows:
-
Impulsive decisions: Impulse-driven decisions during the
course of the project will increase risk in e-commerce
projects.
Result psychosis: The need to attain results is influential
in the decision-making process during the course of
planning, development and implementation.
Zero error syndromes: Project managers tend to lose faith in
their subordinates or fear that the assigned task may not be
accomplished with the desired quality or time frame.
Further, the project manager may end up accumulating risk in
the course of the project.
Risk assessment:
Risk management can be simplified as risk assessment plus risk
mitigation. Risk assessment is as important as mitigation. What
we do is take the risks that are discovered in step one and give
them a designation of high, medium or low risk. Further one needs
to think and quantify about each risk’s possible overall impact.
Project management is a continuous process; hence laxity in risk
management will culminate in losses. We can coin a term Daily
Loss Expectancy (DLE) that can be evaluated on a day-to-day
basis. This helps in quantifying losses in terms of miss-
management of risks.
Daily Loss Expectancy (DLE) = Likelihood of failure (L)/failure
mitigation possibility (M)
-Both the variables are quantified in percentage.
-DLE ranges between 1 and 9.
-The ideal value of DLE is 1.
-If 3>=DLE>1, then DLE is low.
-If 6>=DLE>3, then DLE is medium.
-If 9>=DLE>6, then DLE is high.
-If DLE<1, then the evaluation is not realistic.
Selecting the right people will reduce risk manageability issues.
The ability of selecting the most suitable project manager is a
major factor that affects management of risk in e-commerce
projects, mitigating risk calls for unconventional ways of
planning and execution.
Concluding Remarks: