Channel Conflict/Subsidy

The first question may arise for most company is whether they should go for online sales and what possible channel conflict they aspect? Most of the companies go with the can do attitude-especially the popularity of the internet in today’s market. Sometimes, different people say different reason for channel conflict like vendor or partners compete for the same business. As internet is taking over every business in recent time, user has found the secure and safe way to use the business facility online. Every business has to plan their future agenda keeping in mind one more channel known as E-Commerce. Having two channels for one company may refer as channel conflict. Conflicts describe when one channel makes more sales than other channel. If sales take place from only one channel than other channel required attention or needs to cut off from market to increase the revenue and also affects the customer as well.


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Compare the difference between NZ and Australian examples

The future of e-commerce in New Zealand and Australia looks positive with considerable plans being made to increased activity and implementation in the state.

The Australian government has noted that the opportunity of e-commerce and significant growth in communication technology. Many company website including 22% respondents indicating they intend to implement website. (John D, 2006)

“According to the Ministry of Economic Development’s latest Economic Development Indicators 2005, New Zealand ranked a disappointing 14th out of 19 OECD members in terms of information and communications technology (ICT) investment as a proportion of non-residential gross fixed capital formation in 2002, much lower than neighbouring Australia, which was ranked sixth.”(Country forum, 2007)

Renaissance is a New Zealand based computer distribution company, handling technology products such as apple and Microsoft. Currently it does 30 per cent of its transactions on-line where it does about $1 million worth of business every week. Over 30 per cent of small and medium-sized businesses are ordering goods and services on-line.( Australia and New Zealand has mostly similar but for revenue, its comparatively smaller though the Australian market has exceeded A$45 billion in 2006 where New Zealand was only about NZ$1.5 billion.(Idris,2007)

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The use of this type of e-commerce in Australia

A report from Frost and Sullivan describe, A$12 Billion Australian e-commerce market is underdeveloped and lagging behind three years of US and UK market. Australian online retail sales in 2010 is expected of five per cent of retail sales but if we exclude the overseas sites than it’s dropped down to three percent while domestic online retail store of US and UK  both are over five per cent. The report also noted that the reason behind the online activity is because of the absence of large retail chain and department stores. (David B, 2010)

Senior research Manager Phil Harpur from Frost &Sullivan comments that the number of Australian shoppers uses international retail sites that clearly show that there is a big lag in Australian market and this will remain until big name retailers comes to online.

 A report from industry payment giant PayPal estimated that the Australian e-commerce market ended at high of $26.86 billion in 2010. One of the three top wishes of leading Australian eBay sellers was to improved postal services. Forty-one per cent of survey respondents said improved postal and delivery services would support the growth of online market in Australia. (Nina, 2011)

Retailers and logistics companies are working together on new program to improve delivery services for online retailers in within and outside of Australian. (Nina, 2011)

“E-business Report found that the proportion of small businesses with a website increased over the 12 months to July 2003 from 34 per cent to 36 per cent. Website penetration rates for medium-sized businesses were significantly higher and grew more strongly over the same period, from 71 per cent in 2002 to 82 per cent in 2003.”(, 2011)

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How the introduction of E-Commerce has change the supply chain management business model/s. explain one model which could be used to explain or help instigate this type of E-Commerce

Nothing has rocked the field of supply chain management like the appearance of the Internet (e-commerce). Indeed, the internet has emerged as a most cost-effective means of taking supply chain combination. e-commerce can be defined as marriage between the internet and supply chain management. As of normal, marriage brings many changes between the relationships. In this case, supply chain has transformed many changes from manufacturing to customer management and product design. (Eric, Johnson M, and Whang Seungjin, 2002)

The emergence of e-commerce has changed the relationship between customers and retailers. The consequences of e-commerce over logistics are very much understood. As e-commerce becomes more accepted and much used, it requires to change and adapt new distribution system. The larger retailing stores is being challenged by a new supply chain process of e-commerce and the new system relies on the warehouses located outside the city area from where large numbers of undersized parcels are shipped by trucks or courier services to separate online customer. Where as in the previous (traditional) system, the shopper was bearing the costs of moving goods from retail stores to home, but with the emergence of e-commerce this segment of supply chain has to be incorporated in the freight distribution process. (Dr. Rodrigue J, 2011).

Example of Taditional and E-Logistics system(The Geography of Transport System,2011)

According to European logistics Hub, e-commerce is getting more and more popular every year. They expect the worldwide e-commerce to grow by 19% in year 2011. More and more people find easy to shop on one click and receive the product at home door.

We can conclude that the e-commerce has affected logistics industry in three main ways. First: it has made the distribution system more complex, second: it has changed the B2B segment to B2C market segment and third: the customer services have become more important in e-commerce. (Patrick, 2011)

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Example of Organizations Utilizing This Type of E-Commerce

Supply chain Management (SCM) is an open administration focal points that considers the mutual influence of all the companies involved in the production of goods and services, from suppliers to manufacturers to wholesalers to retailers to final customers and further to removal or recycling. This kind of approach from logistics and production networks believe all companies involved in the process of delivering goods to consumers are part of a network or supply chain. (Helms, Marilyn M, 2011)

Most organizations use supply chain management in order to successfully increase customer’s satisfaction with least process and activities. E-Commerce has played a key role ensuring the company gets recent and appropriate information while making its decision.

For an example, we can give two major companies involved in this kind of network are:

  1. Fonterra and
  2. Foodstuff

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Blog Creation

Among the various options to choose for blog platform, I decided to choose wordpress as blog platform for this assignment topic. There are many reasons why I have chosen this blogging platform. Below are some admirable reasons that I found in this blogging platform.

  • Simple to use
  • Choice of plugin / themes
  • Existence of Statistics
  • Open source and the feature to customize the wordpress blog to website appearance.
  • Search engine optimization and Google’s Page Rank

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