NEW COMMUNICATION CHANNEL FOR FMCG SECTORS

New Communication Channel for FMCG Sectors

Table of Content

Chapter One: Introduction3

Chapter Two: Literature Review5

Chapter Three: Methodology15

Chapter Four: Discussion17

Chapter Five: Conclusion19

Chapter One: Introduction

Electronic commerce (e-commerce) refers to the conducting of business transactions over electronic/computer networks, including the internet, (Barnes and Hunt, 2001) and therefore encompasses processes related to the buying, selling and trading of products, services and information, (Gunasekaran et al., 2002). There has been considerable publicity given to the use of e-commerce in business-to-consumer (B2C) markets, where transactions involving such activities as ordering goods, personal banking and share trading are becoming increasingly commonplace. However, the use of e-commerce for business-to-business (B2B) transactions has been widely identified as an area with significant potential for cost saving and future revenue generation (Barnes and Hunt, 2001). For businesses, B2B can mean electronic interaction with members of the supply base, i.e. for inbound procurement, and with customers for transactions relating to their procurement activity.

In the current business environment the adoption of e-commerce is seemingly unavoidable - “ … e-commerce is no longer an alternative, but an imperative. [However] many companies are struggling with the most basic problem: what is the best approach for establishing and doing business in the digital economy?” (Lee, 2001, p. 349). This suggests that, in moving into an e-commerce business environment - over which there is little choice - there is a need to develop an e-business strategy that will inform and direct future operations. Lee goes on to argue that in addressing this problem, there is no simple prescription or established business model for companies or industries and that developing an e-capability often entails making a paradigm shift, radically altering traditional approaches to doing business (Lee, 2001). It follows that the development of an e-business strategy is uniquely challenging and essential. Such a strategy should concern not only the appropriate technology choices of tools and solutions, but also the coherence and integration of these choices with other company processes (Cagliano et al., 2003) and with their wider strategy for supply chain management (Smart and Harrison, 2002). The empirical component of this paper - presented after theoretical background - explores the situation faced by Princes, a tier-1 supplier in the UK soft drinks industry. It considers the difficulties faced by first tier organisations in the supply chains for FMCG (also known as Consumer Packaged Goods Cox, 2003/2004), and the implications of these for the development of e-business strategy.

Chapter Two: Literature Review

Within the broad definition of e-commerce, it is clear that there are alternative technological routes by which e-commerce can be achieved - the internet being only one possibility. Moreover, both within the literature and in practice, there is confusion over the terminology used in this area, with some authors using the term “e-commerce” synonymously with that of “e-commerce mediated via the internet”, or “I-commerce” (e.g. Manecke and Schoensleben, 2004, Yen and Ng, 2003). The increasing accessibility of the internet and the wide availability of standard browsers is encouraging the expansion of e-commerce via the internet (Gunasekaran ...