Abstract
M.Comm.
In summary, e-commerce will absolutely change the way in which many company decisionmakers and business leaders think, as their companies compete in an online virtual world of business: a real-time, highly competitive marketplace. Companies will be required to rethink their core business processes and then create new strategies for performing e- businesses (Fellenstein & Wood, 2000:105).
Forehand (2001:22), who is managing partner and CEO of Accenture, formerly known as Andersen Consulting, has the following views on succeeding in the New Marketplace:
• "The New Economy pioneers have unearthed a few truths about how to win in the new marketplace. Speed is the new mantra. Change is the only constant. Content carries a premium. Consumers have perfect information. Brands signal trust. Value drives loyalty. And so on. These are quite important considerations, because when you take a step back and think about it, the way we conduct business really has been radically altered. Forever.
• It's not easy to keep an organisation thriving as each new technology change surfaces. (And we've barely tapped the awesome potential for mobile commerce through wireless technology.) Success requires a sense of urgency across the entire organisation. It requires deep cultural change. It requires different and new relationships with customers, employees, alliance partners and even competitors. The end result is often significant business transformation that gets to a company's core business model.
• Leading companies will put the customer at the centre of everything they do. Think about the implications of that to your business model. About a year ago we conducted research in the area of customer relationship management (CRM), which concluded that superior customer capabilities could account for 50 percent of the difference in return on sales between low and high performing companies. Those companies that can effectively put the customer at the centre of their business add tens of millions of dollars to the bottom line.
• Leading companies will put technology on the personal agenda of every senior executive. Information technology has clearly progressed beyond the early days when it was relegated to the back office. But leaders of tomorrow will look at technology as much more than an enabler of business strategy. Technology will become a creator of business strategy.
• Leading companies will apply the same rigour to human performance that they do to all areas of the business. There is an enormous challenge in getting the human element of an organisation equipped to operate in an increasingly digital world. Part of that challenge is finding and keeping talent. And the other is maximizing an individual's performance. Ensuring that people have the right skills, knowledge and behaviours is quickly becoming a company's biggest gating factor to future success. Not technology, not financial capital: human capital.
• Leading companies will operate at speed. This is about an emerging leadership style that enables companies to be responsive to a dynamically changing marketplace. Leadership used to be structured and hierarchical. But now leadership requires quick wits, quick decisions, judgement calls, guts and passion. To operate at speed, companies will create internal environments that support and promote constant innovation. Success can often breed complacency, which dampens a company's sense of urgency and its ability to capitalise quickly on good ideas. The winners of tomorrow will realise the power of innovation and bring a start-up mentality inside".
The above extract highlights various factors, which will become clearer as one progress through the dissertation. At the end, if one returns to this section, it is hoped that the new insight gained into the online world of the Internet will become apparent.
This dissertation considers research into the various business models for Internet-based start-ups, the expectations of the customer, how to satisfy these expectations by means of customer service and how to build customer loyalty. Also considered are what relationships, if any, exist between a successful business model and customer loyalty. More emphasis will be placed on business-toconsumer as opposed to business-to-business transactions and models throughout the dissertation.
The research method used in this dissertation is that of a literature study. A literature survey is conducted of the various business models used, customer expectations, customer service and the building of customer loyalty by Internet organisations. The collected information is described, interpreted and evaluated on a qualitative basis to address the purpose and the objectives of the study.
With the above as background, this study proposes a business model and identifies factors that build customer loyalty, which will make a contribution towards guiding start-up ventures in strategically directing their business into a globally competitive and customer-focused world.
The important findings that were identified in this study are:
• Design a business model based on the following components — people, innovation, focus, speed, equity, technology, size, metrics, strategic vision and leadership. (These are the prime levers that today's Internet start-ups use to compete against the incumbent world of business.)
• Carry out regular market research to establish exactly what it is that your customers expect from your web site. Constantly innovate, and by meeting or exceeding customer expectations, the customer expectation gap will be narrowed, which will lead to increased customer satisfaction, with a higher likelihood of customer retention.
• Establish relationships with your customers and provide them with a unique online experience by utilising technology in such a way that every customer interaction is kept simple and saves the customer time and money. Providing this kind of customer service will build customer loyalty and enhance the company's brand name.