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Name Christina Lobb
NetID clob579
Group Number: 419
Website Link:
Tutorial Details
Tutor: Day: Time:
Kit-Wah Huang Friday 12pm
Time Spent on
20 hours Word Count: 1643


Having an online store is becoming more important for retailers as a means to generate
revenue and expand their market share. Unfortunately, many of the smaller retail brands
cannot afford the extreme costs of owning a well functioning website. ‘The Market’, as a
centralised site for all New Zealand retailers to sell their goods, aims to reduce the costs that
come with website ownership and maintenance, thus making a website possible for all
retailers despite size.
3.1 Vision
To provide all New Zealand retailers with an affordable means of having an online retail
presence on a seamlessly functional, centralised space; ensuring increased market share for
all small retail stores.
3.2 Industry Analysis: Online Retail Industry in New Zealand
Force: High/Low: Justification:
Buyer power: Low There are lots of buyers in the online retail
industry, especially in comparison to the number
of NZ retail websites. According to Statistics NZ,
55% of New Zealanders shopped online in the 12
months prior to the survey (Statistics NZ, 2013, pg
2). This shows that there is quite a high amount
of dependency, on the online retail industry, and
each buyer has little power.
Supplier power: Low The suppliers to the online industry are very
numerous, and as such there is a lot of choice for


the firms in the industry as to which suppliers
they use. For example there are many website
designers in Auckland who offer a similar service.
The lack of differentiation results in the firms in
the online retail industry being almost indifferent
towards suppliers.
Threat of new entrants: Low The high start up costs in owning and maintaining
a website are a significant barrier to entry.
Websites can cost up to $20,000 to setup, as well
as $2400 hosting fee, maintenance, data
collection and advertising (Edwards, 2012). For
most businesses the costs and the effort required
are too much to warrant. The high cost barrier to
entry is enough to deter many new entrants.
Threat of substitutes: High There are many substitutes to the online retail
industry, the main one being physical stores. “NZ
online retail sales are thought to have reached
around 4% of the total market last year” (Adams,
2012). As a percentage of the total sales, the
online sector actually takes up a relatively small
amount. The substitute of physical stores is very
Rivalry among existing
High The online e-commerce industry is competitive,
partially due to the continual developments to
technology. Websites often try to out-compete
each other by offering such benefits as free
shipping and offering premium service. “The


internet forces managers to change their ideas,
experiment, invent and plan constantly… also to
face the reality that competitive advantage can
appear and disappear overnight” (Yoffie &
Cusumano, 1999).
Overall attractiveness of the industry: Overall the e-commerce industry can be quite
profitable. It is a growing market in New Zealand, with many potential buyers in every
demographic. The low supplier power and low threat of new entrants increases potential
profits being made. However there is still a high threat of substitutes to the industry, mainly
being physical retail. The fierce competition in the e-commerce industry means that it’s
difficult for the retailers to remain ahead of the competition.
3.3 Customers and Thei r Needs
The main customer of ‘The Market’ are small New Zealand retailers who would benefit from
having a website on which to sell their goods, but cannot afford or don’t have the time or
expertise to do so. The needs of our customers stem from the fact that owning a website,
while an increasingly vital part of business in the modern world, is not possible for many
New Zealand businesses. According to a recent NZ survey, 97% of New Zealanders search
the internet for goods and services but only 38% of retailers have a website (Brunton, 2014,
p. 3). Those who don’t have a website are missing out on potential revenue from those who
primarily search for goods online.
3.4 The Product and Service
‘The Market’ will solve the needs of its customers by creating a very affordable way for
them to sell their goods online, without the ordinarily expensive costs. ‘The Market’ would
essentially be their own website, without the customers having to pay the costs of
ownership. It would be designed and maintained by experts without any cost to the
customer, resulting in a smooth-running website that would otherwise cost thousands of


‘The Market’ would draw its revenue from the customers paying a small fee to sell their
goods on the website, which would be minimal in comparison to what the service would
otherwise cost.
3.5 Suppliers and Partners
The suppliers that ‘The Market’ would need would be a website designer to create the
functionalities of the website, for example ‘Little Giant’ a designer who has designed
websites for Mont Blanc and Yellow Pages. A second supplier would be needed to provide
maintenance, such as Webtrix who charges for by-the-minute services. They would benefit
our product by creating a flawless, easy-to-use and attractive website ensuring visitors are
impressed and find the website usable, as well as making sure that it remains competitive
by providing updates.
We could partner with Google’s Premier SME Partner program, which would increase our
scope. They help to provide “local knowledge, expertise and access to Google technology to
create high-performing local campaigns” (Google, 2014). We would also need to partner
with the New Zealand banks in order to make online payments possible. Westpac’s online
payment solutions provide the ability to “accept credit card transactions from your website”
(Westpac, 2014), as well as integration of the payment page and sensitive data
3.6 Strategy
‘The Market’ aims towards a large segment of the market; retail businesses in New Zealand,
particularly (but not exclusively) to small businesses. It could be used by any business that
would benefit from having an online website, which is is not a small percentage of
‘The Market’ aims to gain market share by being competitively priced. In comparison to
other methods of owning a website this product is severely the price-conscious one, as the
cost minimal in comparison to those required in setting up your own website.
The overall strategy is therefore Cost Leadership.


3.7 Value Chain Activity
The most important value chain activity for this business is Product and Technology
Development. In order for ‘The Market’ to remain a viable product for New Zealand
businesses, and fulfil its vision, it must have the best technological features and be running
seamlessly, which requires constant updates. Otherwise other websites would soon out-
compete ‘The Market’ and it wouldn’t appeal to as large a percentage of the market, which
it aims to do as part of its strategy.
3.8 Business Processes
3.8.1. MARKET RESEARCH PROCESS –Our aim is to provide a seamless website, for our
customers, which entails that market research must be done. This will allow us to know the
needs of the customers, with respect to the product, and where changes should be made.
This is related to our value chain activity because in order for essential developments to be
made to ‘The Market’ we must be aware of which changes are the most important to our


Define the problem that needs
to be solved, allowing for the
research to be focused
Plan the Research Design, allowing
for structure to the Process.
Market Research
Determine the Research
Conduct Market Research
Analyze the Results
Re-form the data
into meaningful
Marketing Department
Management Information Systems-
Used to make Market Research Meaningful.
Process of Observing and Conversing


Brainstorm of Products and Ideas, to collect all
potential improvements.
Evaluate the Ideas to find the best
Receive Feedback on ideas from the
Market Research Process
Analyze the Results of the
Create a Prototype of the
new product or design.
Test Marketing- Try out the Product or design on
several customers, to receive feedback from their
point of view (so the product is tailored to them)
Is the Feedback
Make any necessary Changes/
Launch the new Product
Product Design Department
Quality Management System

3.8.2. PRODUCT DEVELOPMENT PROCESS – The research conducted is crucial before
developing new products. This process is important in creating new features for the
product, which will ensure that it remains competitive, while taking the customers needs
into account. The best ides are developed, so as to create improvements for the customers.


3.9 Functionalities
 Identify where improvements are necessary
 Determine customers’ perceptions on potential solutions
 Receive feedback on product improvements
 Develop an improved product
3.10 Systems

3.10. 1. MARKET ANALYSI S SYSTEM – The main purpose of this system is to determine where
changes need to be made, in relation to the market. This involves the marketing team
finding information on the market and customer needs, and making them available to
managers. In order for the product to remain competitive the market analysis system must
continuously identify potential improvements, so as to make the product usable for the
3.10. 2. CUSTOMER FEEDBACK ANALYSI S SYSTEM – This system is crucial for better
understanding the customers’ views on the potential solutions to the customers’ needs (in
relation to market analysis) and to the capabilities of the product improvements in solving
these problems. Without taking into account customer feedback we would not be
accurately tailoring the product to the customers’ needs and so would not be fulfilling our
vision to provide a seamless product.
3.10. 3. PRODUCT DEVELOPMENT SYSTEM – This System is involved in changing the product,
taking the customers’ views and market analysis into account. Without any changes to the
product being made then it would not be tailored to the customers’ needs. In the retail
industry there is strong competition, mainly due to the fact that there are always
technology improvements relevant to the industry, in order to keep up and remain
competitive the product must be developed constantly.


3.11. Summary Table: Value Chain to Systems
Value Chain
Processes Functionalities Specific Information System(s) Broad Information System(s)

Product and
1. Market
1. Identify where improvements are necessary

2. Determine customers’ feedback on potential
Market Analysis System

Customer Feedback Analysis
Decision Support System

Decision Support System
2. Product
1. Receive feedback on product improvements

2. Develop an improved product
Customer Feedback Analysis

Product Development System
Decision Support System

Decision Support System


‘The Market’ is an online retail collaboration project, which helps to provide an easy and
affordable solution for retail businesses and to the currently inefficient online model, by
enabling small retailers to exploit the e-commerce revenue. Using Information Technology
decisions can be better made to develop and improve the product, in order to provide
retailers access to the limitless online demographic.


1. Adams, C. (2012, April 30). Web-based retail sales tipped to peak. NZ Herald.
Retrieved from
2. Brunton, C. (2014). .NZ domain name research 2014. Retrieved from .nz Registry
Services website:
3. Edwards, A. (2012, November 9). Setting up an online store [Totali Limited].
Retrieved from
4. Google (2014). Find a Premier SME Partner to help grow your business – Google
AdWords Premier SME Partner program. Retrieved from
5. Saha, A. (2011, March 15). Mapping of Porter’s value chain activities into business
functional units. Retrieved from


6. Statistics NZ (2013). The online retail market in New Zealand. Retrieved from The NZ
Retailers Association website:
7. Westpac New Zealand Limited (2014). Payment solutions | Online & eCommerce -
Westpac NZ. Retrieved from
8. Yoffie, D. B., & Cusumano, M. A. (1999, February). Judo Strategy. Harvard Business
Review, pp. 70-81.