This report analyses the strategic elements related to MusicJuice.net. 1.
What are the major opportunities and challenges involved in Internet (as opposed to bricks-and-mortar) start-ups? Both formats face challenges and opportunities that are both unique to each of them but also some that are common. Major opportunities of Internet (over Bricks-and-Mortar) start-ups Internet
A business model can be created for the local market but then it is relatively easy to make it scalable to access to a global market or specific geographies in a global market. This can happen through change in URL and website languages and marketing with no restrictions on location. So greater market size and geography is available.
Physical store presence is required where success is largely location dependant. Requires greater capital investment in building and stock. Expansions require greater effort due to need to have a physical presence in strategic locations. Access to cheaper intelligent marketing techniques such as google click-ads, push advertising, custom advertising, personalised webpages that suit personal preferences, or email inbox alerts that are personal and directed at the individual. This can be local and/or global to cater for target market. Also able to use traditional marketing techniques of bricks-and-mortar companies.
Marketing can make use of all types of media including the internet but has to be targeted at a market that can access the physical store/s. Anywhere, anytime access (24-7-365) to company content, products, services. Customers can even use cellphones to access, browse or purchase products from internet companies.
Access, browsing and purchasing for customers is largely limited to store operating hours. Access to customer data, if not through forms filled in online then through purchase behaviour and preferences. This data can be “mined” and used for relationship management, advertising and upselling.
Customer data is much more difficult to obtain. Relies more on personal interaction and persuasion to gather data. Reduced warehousing, distribution and working capital costs if products that are sold are tangible. Central storage or JIT ordering are typical methods that can be used. This advantage is increased for Musicjuice since it sells essentially data which it does not have to store in the form of a physical CD.
Products for sale need to be kept in store for sale. This increases working capital especially if there are multiple stores. It also increases the risk of theft, breakage and loss and may have higher distribution costs. Internet business can more quickly, easily and cheaply change the look, feel, operation, content, processes, functionality and capability of their website to changing requirements or different strategies.
Changes to store look and feel, product mix or functionality is more complex and costly and turnaround times may not be as quick sometime requiring “downtime” for renovations, etc.
Major challenges of Internet (over Bricks-and-Mortar) start-ups Internet
Internet businesses are unable to provide the same touch-and-feel experience as traditional businesses do. It cannot rely on necessarily exciting all 5 senses to entice the customer further.
The customer is able to touch-and-feel products before he/she buys. They can also compared, hold/feel; try-on or test items while in-store to gauge individual suitability before purchasing, depending on the item. Availability may be immediate. But if there is shared warehousing or made-to-order or manufacture-to-order business models then there is a lead time that the customer needs to factor into the purchase decision.
More often, products will be available on-premise for immediate purchase preventing the customer from having to wait thus giving them instant gratification and consumption. The face-to-face personal service experience and interaction is not there. The ability to talk to...
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