Sunil has derived many benefits from the use of I. T in establishing his business. He was able to design the clothing on computer (computer aided design) and see what the clothes would look like on his family and friends without having to spend money actually making the clothes for his family and friends to try on which would have been wasted if the clothes didn’t look good on. The factory in Calcutta, India can download the computer files with the designs on in a matter of seconds. Whereas without the use of I. T the designs would have to be sent by post which could take days or weeks to get there.
If Sunil wanted to make an alteration or remove one of the designs he would be able to do it before work was started most probably because of the speed of Internet connections/email; yet if it had to be done by post then money would be lost because production would have probably started due to the length of time taken for the information to get there or due to it being lost in the post. Sunil is keeping costs down by using cheap labour in India and cutting them further by communicating to them via computer where images can also be seen instead of just a voice or writing instead of expensive call rates etc.
By creating the website Sunil has benefited because consumers from all around the world can log onto the site and make a purchase giving Sunil a global target market. The website also creates customer satisfaction because consumers can choose the design and colours they want by simply clicking on them, plus there can be very little complaints made about size and fitting with customers entering precise measurements so the clothes are made to fit perfectly.
When Sunil needed extra staff it was possible for the two extra designers to work from home yet have direct EDI links with Sunil to contact him when necessary. Overall I. T has helped Sunil a lot, he hasn’t had to spend capital on buying premises in the UK, and he can save money by using C. A. D. and by having a low cost communication service with producers, customers and designers. 2a.
If the pattern of business being able to start up with only a small investment becomes more widespread then the competitiveness of markets may increase quite dramatically due to more and more people deciding to start up their own business and entering a particular market because little capital is needed compared to traditional businesses. With money not being needed to buy buildings and machinery to start the business up people like Sunil can afford to sell their products at much lower competitive prices boosting their market share and generating them more profit.
With the use of Internet and computer skills a very successful business could be run from a simple garden shed. The extra profit or capital not needed for the purchase of building or machinery means that the money can be invested back into the business whether it be for product development or new product development. By developing existing products businesses can increase their market share by giving their product/s something so that consumers will want their product; and by creating new products they can create new markets, which other businesses have not yet discovered.
However with more and more people like Sunil starting their own businesses Internet shopping will start to put new competitive pressures on high streets and shopping centres. If a t-shirt can be ordered in a matter of minutes on the internet and arrive in a couple of days time it wouldn’t make sense to go into a town centre and search for the t-shirt in the required size as it may not be in stock. Retailers will have to think hard about whether they are offering the level of personal service to make a worthwhile visit.
As more people decide to start their own business the idea will look good to more others, yet eventually there will be so many competitors in the market consumers would simply have to many choices and all the businesses would become more and more competitive until eventually it would only be the consumers benefiting and not the businesses. Plus competitors would copy any new products/markets developed with the extra money more or less straight away and you have spent the money on research etc.
2b. It will effect the role of banks in business too because people like Sunil starting their own business will not be needing to go to banks for large long-term loans to buy buildings and machinery and only need smaller loans if necessary. This will effect the banks because their profit is the interest paid back in the loans they give therefore banks will start to become more competitive offering lower interest rates sending that market into interest rates wars.
Also the use of applications of I. T has already caused rapid changes in banks. Jobs in banking have been transformed by automatic ‘hole in the wall’ cash dispensers; these have wiped out thousands of jobs for bank clerks and have led to the closure of hundreds of bank branches. 3. With Sunil’s business almost conforming to Charles Handy’s description of ‘ the empty raincoat’ with an outer coat but little inside.
Sunil’s business is a company, which has an outer coat but nothing visible inside, many of the activities are contracted out, and most of the workforce is at home, working for the company. This is an extreme view, but as city centres become harder to get to during the rush hour, radical solutions may be needed. Already there are many management consultancies in London where staff have no office. If they want to come into work, they phone in to book a desk for the day.
This ‘hot desking’ cuts down on office overhead costs and discourages people from building their work lives around a comfortable private office. However if the business expands even further communication problems will arise, with more and more staff being employed and working from home information will become distorted as it gets passed around, face to face conversations and discussions will no longer take place and employees may have different ideas for the business compared to Sunil’s.
4. With increased competition due to other copying Sunil’s Internet retailing of Indian clothing he could take several actions to strengthen the market position of his own website. Sunil could invest in advertising so that more people visit his website when looking for Indian clothing, perhaps he could put his website address in particular magazines which his target market would read, or posters where his target market would see them.
Another form of advertising would be to use pop ups, when internet users (particularly of his target market) logged onto a web address a pop up would come up advertising Sunil’s website, he could contact websites that are to do with Indian religions etc. Sunil could create a slogan that incorporates the fact that he was the one who came up with the idea and his business was the first about so consumers will know that he has established himself in the market already and choose his business believing it to be more reliable and good value etc.
Sunil could perhaps use offers to entice consumers into choosing him because it is better value for money he could build up his market share buy using offers such as ‘buy now and receive 10% of next purchase’ or free deliveries to particular areas, he could also keep a record of what particular customers buy so that when a new design is create he can send an email showing samples of new designs that they may like, therefore personalising the emails and making the customers feel more appreciated and know that the business has there interests at heart.
As Sunil’s website becomes more popular and recognised consumers will pass it on further by word of mouth and as long as Sunil’s business gives customer satisfaction will mean more people turning to it for their purchases. 5. In setting up a small successful business such as Sunil’s aims and objectives will be very important as every business needs them whether they end up successful or not.
Aims and objectives are needed to ensure that all of the business is working towards the same goals, aims may not need to be written down on a piece of paper such as Sunil’s which was that he wanted to be rich, he turned that to an objective which was that he wanted to make his first half million by the age of 25. Once a simple objective like that has been decided a business if it is determined to reach the target set will then develop a strategy to make it happen.
A successful business will set itself many smaller targets to reach so that it eventually reaches that first main objective, otherwise a business will not have a key reason to keep profits up etc and employees will not have any motivation to reach any objectives set, if the objective was for Sunil to make his first half million by the age of 25 he could motivate employees by telling them how they will benefit if this happens and continually showing them proof so they no they are getting closer to reaching their objective.
Aims and objectives give a business itself motivation and an idea of where it is heading once each objective is achieved then another can be set or started to be achieved, no doubt once Sunil has made his first half million he will aim to make his first million by another age, when he does make his forst million the business will clearly be expanding further so that once costs are recovered Sunil will be on his way to making one million plus.