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Porters Five Force Model on E-tailing and E-SCM

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I have shown a brief porters five force model taking from various research papers and from findings in which the credit all goes to them. I have just compiled and compressed it.

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Porters Five Force Model on E-tailing and E-SCM

  1. 1. PORTERS FIVE FORCE MODEL ON INDIAN E-SUPPLY CHAIN MANAGEMENT Presented By, Aman Sati Aiyesha.A Lakshay Shivani Moumita Bhattacharjee and Shubham Raj 2nd sem – IB
  2. 2. INTRODUCTION ->The Indian online retail market, major e-tailing firms like Flipkart, Snapdeal and Amazon have adopted asset light model and hence moved away inventory based model to marketplace model. Private equity players and venture capital firms have shown their faith in the growth of online retail in India and it is evident with Flipkart receiving eight rounds of funding over the last seven years. ->But with immense growth opportunities, the online retail market faces the challenges in terms of logistics services as the key to online retail is to deliver products on time. Logistics and infrastructure, huge maintenance cost of warehouses, costly middlemen, and error in online payments are a few of the bottlenecks in the growth of the industry
  3. 3. OBJECTIVES • To understand the basic functions of Supply chain Management. • To know about the potential of E-tailing in India. • To know about the threats and competition that affects India’s E-tailing. • To understand from the porters five force model and to analyze the E-tailing and E- SCM in India.
  4. 4. DEFINITIONS What is E-SCM? Electronic Supply Chain Management (e-SCM) is an optimization of business processes and business value in every corner of the extended enterprise - right from your supplier's supplier to your customer's customer. What is E-tailing? E-tailing or e-retailing refers to the selling of retail goods electronically over the Internet. The term is a short form for "electronic retailing", and surfaced in the 1990s for being frequently used over the Internet. The term is an inevitable addition to other similar terms such as e-business, e-mail, and e- commerce. E-tailing usually refers to the business-to-consumer (B2C) transactions.
  5. 5. THREE TYPES OF E-TAILING Click – The businesses that operate only through the online channel fall into this category. Prominent examples in this category include: Dell, Amazon.com and e-Bay Click and Brick– The businesses that use both the online as well as the offline channel fall into this category. Brick and Mortar – This is the conventional mode of retailing. The businesses that do not use the latest retailing channels and still rely upon the conventional mode belong to this category
  6. 6. Rivalry among existing competitors Threat of new Entrants Bargaining power of Buyers Threat of Substitute Bargaining power of suppliers
  7. 7. PORTERS FIVE FORCE MODEL ON E- TAILING
  8. 8. BARGAINING POWER OF THE SUPPLIERS The power of the suppliers gets higher when the e-tailers (electronic retailers) have less alternatives for the preparation of them. However, many E-SCM have numerous options of suppliers. E-SCM, on the one hand, can give E-tailers (electronic retailers) the access to different suppliers and on the other hand, E-SCM tends to provide equal access to e-tailers (electronic retailers) for all suppliers, and creates a different channel for suppliers to achieve etailers (electronic retailers) -> Dependency - low
  9. 9. THREAT OF SUBSTITUTES The threat of alternative products or services in the electronic market is high, because there are a large number of alternatives suppliers and E-tailers(electronic retailers). The larger number and alternative of closer products increase the etailers trends (electronic retailers) to switch between suppliers. -> Reduces cost of switch over
  10. 10. THREATS OF NEW ENTRANTS E-SCM reduces the entry barriers and makes market entry easier. Increase in suppliers makes the transmission of power to e -tailers (electronic retailers). There is no obstacle for entrance of providers to supply chain e-tailing. So, because of the convenience of the increasing number of e-tailers suppliers (electronic retailers), the level of competition between them increases at any time. E-SCM lowers the costs of suppliers' switching. E-SCM lowers difference among competitors. Keeping dedicated E-SCM applications for the newcomers is difficult. ->Threat of new entrants - High
  11. 11. BARGAINING POWER OF E-TAILERS The power of E-tailers (electronic retailers) is more than suppliers once that the e- tailers (electronic retailers) have more choices than the suppliers. In addition, E-tailers (electronic retailers) may lower themselves to work easily with suppliers. -> Bargaining power - High
  12. 12. COMPETITION FROM RIVALRY The intensity of competition's intensity is one of the major factors for the competitiveness of the E-Tailing industry. There are many electronic stores about the same size and with a small distinction between products and services. Due to the lack of any obstacle to market entry and the presence of a large number of suppliers and E-tailers (electronic retailers), there is a higher level of competition among them as well as with each other. E-SCM generally makes the industry more efficient. -> Competition from rivalry - High
  13. 13. FUTURE OF INDIAN SUPPLY CHAIN MANAGEMENT
  14. 14. SIX BIG TRENDS THAT CHANGE THE SCM INDUSTRY  More Mega Cities  Proliferation of segments  Improved Supply chain Infrastructure  Better Regulatory Climate  Stronger Global Connect Affordable and Accessible Technology
  15. 15. MEGA CITIES
  16. 16. MULTI-TIER NETWORK DESIGN
  17. 17. PROLIFERATION OF SEGMENTS
  18. 18. CUSTOMIZATION ACROSS THE VALUE CHAIN
  19. 19. IMPROVED SUPPLY CHAIN INFRASTRUCTURE
  20. 20. BETTER REGULATORY CLIMATE GST Fiscal Incentives Sustainability /Activism Changing regulations
  21. 21. STRONGER GLOBAL CONNECT
  22. 22. CHALLENGES THAT WILL CONTINUE IN 2025
  23. 23. REFERENCES • Supply chain 2025 – trends and implications in India By A.T.Kearney • Analysis of the effect of e-supply chain management (e-scm) on retail industry By Zeinab Zarat ,Dakhely Parast, Saeed Vanaki and Farsad Abdar
  24. 24. Thank you

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