TigerDirect.com in E-Commerce Essay

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This study is based on the growing dominance of TigerDirect.com in the online marketplace to cater to B2B and B2C customers. The primary issue is to analyze the e-commerce site, its business strategies and its growing presence internationally. TigerDirect.com has strengthened its online position through their business models. Virtual community and associate network have ensured mass customization. This is identified in the body of the report. The essence of engineering principles should not be underestimated that forms a greater part of success. The exploitation of various emerging technologies with the knowledge of e-commerce is very essential for maintaining and adding innovative methods to keep customers.


TigerDirect.com is an online marketplace for purchasing goods and services. The business strategies and models account for a greater portion of online customers. The company description follows with the various technologies used for doing online businesses. This section would analyze the online business and exploiting the emerging technologies for the successful implementation of business functions. The next section would handle the analysis of the model and strategic imperative used in this business. The focus is mainly on business models and describes in detail the economies of TigerDirect. The last section would depict the analysis of several findings, the implications of studying e-commerce in general and the recommendations for making the business cater to masses.

1. Company Description: TigerDirect.com was commenced for selling computer related products. It stands today for one of the industrys top computer and computer related retailers. It caters to individuals and enterprises with computer related products. It is considered the best for its outstanding PCs built with premium components, exceptional leasing options, the best technical support and customer service in the business and the best prices on everything (Source: http://www.tigerdirect. com/sectors/aboutus/index.asp). They believe that their people have contributed immensely in their success and will continue the great effort.

The alternatives such as Build-To-Order, acting as entirely customized systems would stand competitive to high priced machines sold by other retailers. 1.1 Online Business model Its online business model caters to businesses with their specific requirements. They boast of having 14 years of hands-on experience in handling the demand of the enterprises. Two most important elements that they seek to put emphasis are on service and pricing (Source: http://www.tigerdirect.com/sectors/aboutus /index.asp). They firmly believe that price is of great importance to a business customer as they buy bulk but they place service higher than anything else.

They have the concept of account managers, who are professional and efficient in handling large and complex orders and effectively manage them. They can handle special billing, pricing, shipping, a number of other corporate issues and they offer a Net 30 day open account (Source: http://www.tigerdirect.com/sectors/aboutus /index.asp). 1.2 Sales and Marketing In the United States, it has the ability to provide enterprise customers with electronic data interchange (EDI) ordering and customized billing services, customer savings reports and stocking of specialty items specifically requested by these customers.

The relationship marketers efforts are supported by frequent catalog mailings and e-mail campaigns both of which are designed to cause inbound telephone sales and interactive websites, which allow customers to purchase products directly over the Internet. 2. Technologies for doing business online The various technologies used are classified into client and server side and more specifically they denote the e-commerce and web techniques used for building up and running successfully the online business. On the web technology side, Active Server pages (ASP) has been used for the web pages to exchange information and get the job done.

At the server end there is more than one web servers to cater to the business functions namely display of products, promotions on them and their prices, managing the shopping cart, payment system, registration and delivery system, shipment, tracking back of order and many more. All these business functionalities must be interlinked so that the ultimate objective is achieved. The web server is linked with the business process server, which may be linked to a series of other servers such as payments and security servers. XML is used for a service called Really Simple Syndication (RSS). TigerDirect.com uses RSS to announce their offers and promotions to web based blogs and news.

On the e-commerce side, TigerDirect.com uses VeriSign services for protecting data and information exchanged between the sites. It uses a 128-bit SSL certificate to get the job done. The e-commerce transactions can be well protected using the SSL technology (Rayport, 2002). It also uses Electronic data Interchange (EDI) technologies to cater to business customers in United States. It is very secure for all business deals and offers greater protection for business financial information.

3. Value addition for users and customers: TigerDirect.com is a renowned online market place for computers and computer related products. The following sections depict clearly the value addition techniques implemented successfully by the business: ¢ Service excellence: TigerDirect.com places its services domain over other aspects. It profoundly believes that greater service means repeat customers and marketing by word of mouth is the greatest advantage over any other form of marketing. It employs professional account managers for rendering business customers so that they are managed effectively. They have phone, email and chat support and in person support for all customers.

It also has a dedicated Tech support for all previous customers based on some conditions. They have compartmentalized their sales and product support for customers, government and businesses. ¢ Training marks their efficient product knowledge: They provide training to their employees and sales professional regarding their vast warehouse of products. Knowledge transition from management to the employees is very essential for deep product and sales knowledge so that rendering to customers gets easy. ¢ Fine Website layout The layout of TigerDirect.com is according to the standards catering efficient page layout, correct depiction of products with their detailed information, rich information content, usability features and many more. ¢ Information is easily accessible Any sort of information is very easy to find out, whether it is for products or service. All kinds of customers are serviced and it manages the tracks them with their site very effectively.

4. Analysis of the economies of the business The worldwide growth in active internet users has made e-commerce a significant opportunity for sales growth. In 2006, they had approximately $819 million in internet-related sales, an increase of $169 million, or 26%, from 2005. E-commerce sales represented 34.9% of total revenue in 2006, compared to 30.7% in 2005 (Source: http://www.systemax.com/docs/10K-2006.pdf). The increase in internet- related sales enables them to leverage advertising spending, reduce printed catalog costs while maintaining customer contact. The following is a brief about their financial status for last three consecutive years.

Figure 1: Financial Statement (Source: See: http://www.systemax.com/docs/10K-2006.pdf) Gross profit, which consists of net sales less product cost, shipping, assembly and certain distribution center costs, was $342.9 million, or 14.6% of net sales, for the year ended December 31, 2006, compared to $307.3 million or 14.5% of net sales in 2005 (Source: http://www.systemax.com/ docs/10K-2006.pdf). In the fourth quarter of 2006, the companys gross margin was 12.9% compared to 14.7% in the fourth quarter of 2005. The decrease in gross margin was primarily attributable to price discounting for technology products.

Gross profit was $307.3 million, or 14.5% of net sales, for the year ended December 31, 2005, compared to $286.5 million or 14.9% of net sales in 2004. The gross profit ratio declined in 2005 primarily because of approximately $7 million of increased costs for warehouse staff and supplies related to increased activity levels from the prior year. These increased costs were partially offset by favorable changes in product mix. Improvement in gross profit ratio in North America was partially offset by a continued decline in gross profit ratio in Europe. 5. Strategic imperative used in the business: TigerDirect.com forms a successful online market place for computer and related accessories for US and UK customers to conduct business to consumer model (B2C) and business to business model (B2B). Its successful rendering to the business customers have enriched their professionalism and credibility.

The rebate center allows one to search and get it accordingly on the basis of purchase and services. The gift center allows one to select a card for gifting to another person; it comes with a value and is quite suitable for gift purposes. TigerDirect.com has online help, in the form of interactive tutorials so that according to the options selected one can get his/her choice of product range. It also has provisions for Gold membership cards for availing rebates and other promotions. The payment options also include Paypal which is a very suitable way for payment for individuals. Quick online payment can be initiated with that. The direct mail catalog and relationship marketing features make TigerDirect.com a stronger online business.

The strong engineering principles make the online marketplace site quality proof addressed by (Pressman, 2000) to aim at maximizing performance in usability, functionality, reliability, efficiency and maintainability. Engineering principles prevents problems with outdated or irrelevant information, slow response, crashes or security breaches to which web applications are sensitive. Legal and ethical issues are vital to online success. Building trust and user confidence is essential to our client, respecting consumer privacy and adhering to data protection legislation. Consumers are extremely concerned about security and privacy on the Internet (Trepper, 2000).

All the above strategies make it quite successful for creating a presence for selling computers in the online marketplace. 6. Evaluation of effectiveness of its business model and the technologies in use: The business models used are quite efficiently handled by TigerDirect.com in relation to product knowledge, knowledgeable sales professionals, giving service a priority more than price, ultra-quality computer systems and many other quality factors augment the business model and strategies in use. All these factors combined together have resulted in increase in sales and profit for the organization.

Other promotion factors like rebate options, gold membership cards, recycling products and other options have resulted in pulling customers and making it one of the best available. According to the report published in Internet Retailer, TigerDirects website guests spend an average of almost 12 minutes on the site. This time of 11 minutes and 53 seconds is nearly 1 1/2 minutes longer than second-ranked eBay, at 10 minutes 33 seconds (See: http://www.tigerdirect.com/sectors/ Help/pr_webpages/03-05-2004.htm). TigerDirects catalog is recognized as a technology handbook for years (See: http://www.tigerdirect.com/sectors/Help/pr_webpages/ 03-05-2004.htm). The company now broadens its capability to notify consumers via its growing charisma on the Internet.

The homepage focuses on the present products of the company and the promotion offers available for both individuals and enterprises. Conclusion The strategic goals of TigerDirect.com have led to its success. It has achieved wide recognition for selling computers and related products in the internet. However it still needs to spread its presence internationally, presently it caters to US and UK customers only. The various e-commerce techniques used for safety of its customers have facilitated the use of the website for safe buying of products and services. It increased trust and reliability of the users. The advanced web technology has been used for taking care of the consistency level of the information displayed and for the various integration of business functionalities in making it a one stop solution for computer market place.

Engineering principles were a necessity in the complexity/diversity surrounding online activity. Legal and ethical issues are vital to security conscious users. TigerDirect.com has utilized their virtualized value system for economies of scale and global reach. Their virtual community model has excelled in customer relations, aiding brand image. Associates and business model flexibility have sustained competitive advantage. Continuous capitalization of resources in the environment and identifying and exploiting the emerging technologies would make it a truly rich site for online market place for computers and other products and to achieve customer satisfaction, in future so as to envelope greater economies.

References/ Bibliography

Murugesan, S. & Ginige, A. (2005) Web Engineering: Introduction and Perspectives from http://www.idea-group.com/downloads/ excerpts/SuhChapter1.pdf. Nielsen, J. (1994) Ten Usability Heuristics from http://www. useit.com/ papers/heuristic/heuristic_list.html. Nielsen, J. (1997) How Users Read on the Web from http://www. useit.com/alertbox/9710a.html. Pressman. R. (2000) Software Engineering: A Practitioners Approach, McGrawHill, Maidenhead. Rayport (2002). E-Commerce. Systemax.com. See: http://www.systemax.com/docs/10K-2006.pdf TigerDirect.com. See: http://www.tigerdirect.com/sectors/aboutus /index.asp Timmers, P. (1998) Business Models for Electronic Markets, http://www.imse.hku.hk/imse2016/Readings/Essential/BusinessModel-Geoffrion/Timmers/98_21_n.html. Trepper, C. (2000) E-Commerce Strategies, Mapping your organisations success in todays competitive marketplace, Microsoft Press, pp.138-140, 153. Weick, K. (1995) Sensemaking in Organisations.

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