SCHOOL OF BUSINESS ASSIGNMENT COVER SHEET STUDENT DETAILS Student name: Pham Lam Ngoc Student ID number: UNIT AND TUTORIAL DETAILS Unit name: Academic English Tutorial group: Lecturer or Tutor name: 21000375 Unit number: Tutorial day and time: AEn-T321WSB-6 Mon-Tue-Thu / 8am – 11.30am Mr Gabriel Ryan ASSIGNMENT DETAILS Title: Individual Essay Length Due : 1283 words date: Home campus (where you are enrolled): 02/01/2022 Date submitted: 02/01/2022 DECLARATION I hold a copy of this assignment if the original is lost or damaged I hereby certify that no part of this assignment or product has been copied from any other student’s work or from any other source except where due acknowledgement is made in the assignment I hereby certify that no part of this assignment or product has been submitted by me in another (previous or current) assessment, except where appropriately referenced, and with prior permission from the Lecturer / Tutor / Unit Coordinator for this unit No part of the assignment/product has been written/produced for me by any other person except where collaboration has been authorised by the Lecturer / Tutor /Unit Coordinator concerned I am aware that this work will be reproduced and submitted to plagiarism detection software programs for the purpose of detecting possible plagiarism (which may retain a copy on its database for future plagiarism checking) 2 Student’s signature: Lam Ngoc Note: An examiner or lecturer / tutor has the right to not mark this assignment if the above declaration has not been signed ARO 00380 08/15 The Strategy For SMEs To Adapt To E-commerce Pham Lam Ngoc Western Sydney University AEn-T321WSB-6 Mr Gabriel Ryan February 2, 2022 3 In today’s modern world, Electronic commerce (e-commerce), which is regarded as a global strategy and has been responsible for multiple changes to many organizations and customers over the last century, has risen dramatically due to the massive expansion Because of the benefits of e-commerce, several large companies chose to investigate this potential market as a step forward However, Govindaraju et al (2015) stated that in comparison to larger enterprises, Small and Medium Enterprises (SMEs) are lagging behind in terms of ecommerce penetration It is undeniable that SMEs have to face several impediments when adapting to e-commerce regarding competition from large companies, cyber security issues, financial barriers, and customers’ poor service This essay will point out those common difficulties and analyze several strategies to improve this situation One of the obstacles that SMEs have to face is competition from large companies that have already existed on e-commerce platforms It is a fact that large companies are real barriers for SMEs since those large companies have engaged in the e-commerce domain for an extended period In other words, large companies have a thorough insight into the ecommerce market, strong brand images, and customers’ loyalty Therefore, SMEs would challenge finding market share and customers’ attention Nevertheless, there are several methods for SMEs to eliminate the competitive issues in e-commerce Firstly, SMEs are recommended a “Blue Ocean Strategy” This method would help those companies create a unique place in the e-commerce market and get over bloody competition According to Kim and Mauborgne (2015, pp 3-5), the “Blue Ocean Strategy” refers to a market for a product where there is little or even no competition By accomplishing this strategy, SMEs can reinvent their marketplace and create profit in entirely new ways For example, in the 80s, the 4 cosmetics industry focused mainly on women and left men behind Then, Romano was a pioneer who produced perfume and personal care products for contemporary men, including Eau De Toilette, hair care, and body care, officially marking the opening of formally launching and expanding the market for men's beauty products Secondly, SMEs should focus on a specific product for the e-commerce market instead of investigating numerous products that not suit the company’s strengths Mittal et al (2018) demonstrated that although the research and development of SMEs are not advanced, focusing on specialized products can differentiate SMEs from their competitors Finally, small and medium enterprises should take action fastly In other words, those companies should give discounts to keep the customers’ loyalty Besides, analyzing purchasers’ feedback and ameliorating the quality of the product in order to fulfill the demand of customers As e-commerce becomes more popular, security issues in these systems may become a challenge to handle Hille et al (2015) cited that the growing scope and frequency of online activity, as well as the growing number of consumer-specific data points, raises the risk of this information being exploited It is noticeable that business places a greater emphasis on sales performance and less focus on maintaining security Raghavan et al (2017) claimed that 50% of small businesses have suffered from cyber-attacks SMEs may indeed be more attractive to hackers because they not take the time to develop a contingency plan or a response plan against cyber-attacks and not have the resources to recover from an incident when it happens As a result, customers would not want to make purchases on SMEs’ websites because of the fear of losing personal information and financial data Furthermore, customers are not the only ones harmed by cyber assaults; the company suffers as well 5 Therefore, SMEs had better maintain their cyber security in order to protect their companies and get customers’ trust Firstly, those companies are well-advised to secure the payment gateway, which means not storing customer credit card information on the database Also, those enterprises could consider using third-party software regarding Paypal, Momo, and Stripe to process payments off-site Secondly, SMEs should deploy firewalls since efficient firewalls would protect their website against XSS (cross-site scripting), SQL (Structured Query Language) injection, and other cyber-attacks Last but not least, using SSL certificates and HTTPS is an excellent action to protect the website SSL (Secure Sockets Layer) is a security technology commonly used to secure server to browser transactions HTTPS (Hypertext Transfer Protocol Secure) is a protocol tool used to send data between a web browser and a website, which probably increases data transfer security Another difficulty that SMEs may face when entering the e-commerce markets is financial barriers To proceed with the e-commerce market, SMEs need an enormous amount of money for advertising, packaging, technological management systems, and training employees on using online operational systems Sallem et al (2017) stated that SME's not only have limited resources in technology but also in financing their resources in technology, as well as in funding of their operations, promoting their products, and having an inadequate budget for training their employees As a result, a lack of financial resources could probably limit the companies from improving their products and coping with the significant changes in the e-commerce markets Nevertheless, there are several methods for those companies to overcome these barriers Initially, SMEs can sell their product on E-commerce exchanges such as Shopee, Lazada, and Tiki instead of creating their own websites, which may cost lots 6 of money Moreover, those companies can call for investment from angel investors or capital investors In addition, if the products of those SMEs have a unique selling point, they could participate in incubators or business shows such as Shark Tank to advertise their commodities and get the financial resources Simultaneously, customers’ poor experiences with e-commerce services could also be a reason for losing customers of SMEs In terms of offline shopping, customers have a tendency to visit a nearby store, and if they have a terrible experience here, they might still visit those offline stores because of location benefits However, online shopping can be worldwide, and changes can be made easily As a result, if customers have bad experiences such as site loads slowly, they can switch to another e-shop that sells the same products immediately Therefore, SMEs had better have an attractive and effective service on ecommerce platforms to receive customer loyalty To begin with, those SMEs should make sure their websites have site loads quickly, optimize for mobile, simplify the checkout process, and offer multiple payment options Secondly, the website’s pages are recommended to have brand stories and updated information, including promotion and new products, since the websites would be an effective tool to retain existing customers and attract new ones According to Nisar and Prabhakar (2017), existing customers can visit the sites for news, specials, and other updates, while new customers can simply access the companies’ sites and learn about the brands at any time Thirdly, SMEs should provide their customers with several shipping options available in both speed and cost so they can choose the ones that work best for them Also, providing the information of the shipped package for customers to keep track of would help maintain their trust Consequently, those methods are a good way to 7 give customers a reason not only to buy products from the company over similar offerings but also to be satisfied with the products, brand, and experience that they both re-purchase and convince others to the same In conclusion, regarding practical applications in the realm of e-commerce, it seems challenging for SMEs to immediately transform and adapt because of the tough competition with big companies, the management of security issues in technological systems, the lack of financial resources, and the customers’ poor experiences Therefore, those strategies are a precondition that those SMEs must accomplish for their firm to succeed in today's ecommerce markets 8 Reference List Govindaraju, R., Wiratmadja, I I., & Rivana, R (2015) Analysis of drivers for e-commerce adoption by SMEs in Indonesia (pp 391–395) CRC Press Hille, P., Walsh, G., & Cleveland, M (2015) Consumer Fear of Online Identity Theft: Scale Development and Validation Journal of Interactive Marketing, 30, 1–19 https://doi.org/10.1016/j.intmar.2014.10.001 Mittal, S., Khan, M A., Romero, D., & Wuest, T (2018) A critical review of smart manufacturing & Industry 4.0 maturity models: Implications for small and medium-sized enterprises (SMEs) Journal of Manufacturing Systems, 49, 194–214 https://doi.org/10.1016/j.jmsy.2018.10.005 Nisar, T M., & Prabhakar, G (2017) What factors determine e-satisfaction and consumer spending in e-commerce retailing? Journal of Retailing and Consumer Services, 39, 135–144 https://doi.org/10.1016/j.jretconser.2017.07.010 Raghavan, K., Desai, M S., & Rajkumar, P V (2017) Managing Cybersecurity and e-Commerce Risks in Small Businesses Journal of Management Science and Business Intelligence, 2(1), 9–15 https://doi.org/doi: 10.5281/zenodo.581691 Sallem, N R M., Nasir, N E M., & Kassim, C K H C K (2017) Small and Medium Enterprises: Critical Problems and Possible Solutions International Business Management, 11(1), 47–52 https://doi.org/DOI: 10.3923/ibm.2017.47.52 Kim, W C & Mauborgne, R (2015) Blue ocean strategy : How to create uncontested market space and make the competition irrelevant (Revised ed., pp 3–5) Harvard Bus Review Press (Original work published 2005) 9 ... been signed ARO 00380 08/15 The Strategy For SMEs To Adapt To E-commerce Pham Lam Ngoc Western Sydney University AEn- T321WSB- 6 Mr Gabriel Ryan February 2, 2022 3 In today’s modern world, Electronic...2 Student’s signature: Lam Ngoc Note: An examiner or lecturer / tutor has the right to not mark this assignment if the above... from large companies, cyber security issues, financial barriers, and customers’ poor service This essay will point out those common difficulties and analyze several strategies to improve this situation