MANAGEMENT CHALLENGES

Management Challenges

Management Challenges

Part A

It is an irrefutable fact that the business environment of today has been seriously affected by the economic recession. As a result, businesses operating in all of the major industries are confronted with daunting challenges that they did not have to worry about previously. For example, declining market share, cut-throat competition, reduced profit margins and falling sales revenues are just some of the major problems that businesses have to face today. In such testing market conditions, converting the business approach from traditional to e-commerce can help companies gain a myriad of benefits. Increased market visibility, greater conversion rate, and reduced overheads are just some of the benefits that the company will be able to enjoy if it chooses online marketing as its business approach.

As an example, we may consider the case of Bishopston Trading Company of Bristol. Bishopston Trading Company is located at 193 Gloucester Road, Bishopston, and deals primarily in men's, women's and children's wear. The outlet located on Gloucester Road sells fashionable clothes and accessories, bedding and household items, toys and gifts, greeting cards, Christmas products and items for children and babies. In recent years, the business has suffered as a result of challenging market conditions and increased competition. The profit margins of the business have gone down, mainly due to declining sales and incoming traffic. As a solution to its problems, the business is considering the pros and cons of shifting its entire operations to an online e-commerce platform.

It is true that e-commerce provides businesses with a myriad of benefits when compared with doing business in a traditional style. One of the major advantages of doing e-commerce is that it allows businesses to enjoy a lot of cost benefits. For example, the costs of setting up an office are significant. Expenses such as office rent, salaries and utility bills can affect the profit margins of the business. E-commerce provides an effective solution to this problem as it does not require an office premises for which the business will have to pay a monthly rent. Moreover, the business also does not need to hire a lot of office staff to run the business and instead, it can simply hire a small number of staff to manage the website.

In addition to this, a traditional business setup requires additional investment and this can have an impact on the profit margins of the business. A business may need to set up billboards and neon signs, and print marketing collaterals such as brochures, pamphlets and catalogues. The dilemma that businesses face in a competitive market environment is that they simply cannot compromise on their marketing campaign as it is essential for its long-term success. As a result, businesses will have to print marketing collaterals and put up billboards and neon signs in order to increase their visibility in the market. This is extremely essential if they want to attract a larger volume of incoming traffic. The costs related to marketing and advertising can run high at times and ...