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With
By
Anuran Gayali
Contents
Acknowledgement ........................................................................................................................................ 3
Executive Summary....................................................................................................................................... 6
Introduction .................................................................................................................................................. 7
Business Model ......................................................................................................................................... 8
A Real-time Marketplace (Bargain Online) ........................................................................................... 8
Volume Deals - ...................................................................................................................................... 8
Paid Ads................................................................................................................................................. 9
Flowchart of Mydeals247 operations ......................................................................................................... 11
For Buyer ................................................................................................................................................. 11
For Seller ................................................................................................................................................. 12
Industry and Competitor Analysis............................................................................................................... 12
Porters 5 forces analysis B2B commerce ............................................................................................ 13
Swot analysis of Mydeals247 ...................................................................................................................... 18
Critical Success Factors of Mydeals ............................................................................................................ 18
Marketing Mix the 4 Ps ........................................................................................................................... 19
Product .................................................................................................................................................... 19
Product Category Management.......................................................................................................... 19
Place ........................................................................................................................................................ 21
Domestic ............................................................................................................................................. 22
International ....................................................................................................................................... 24
Price ........................................................................................................................................................ 24
Promotions.............................................................................................................................................. 24
Offline Marketing (AGMARKET) .......................................................................................................... 24
Online Marketing ................................................................................................................................ 25
SEO (000webhost, 2015) ..................................................................................................................... 25
Human Resource Management .................................................................................................................. 27
Conclusion and Recommendations ............................................................................................................ 28
SWOT for Metro .................................................................................................................................. 28
Critical success factor (CSF) of Metro :- .............................................................................................. 29
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List of figures
Figure 1 : Bargain online (marketplace) model............................................................................................. 8
Figure 2 : Volume deals model of mydeals247 ............................................................................................. 9
Figure 3 : Paid Ads model of Mydeal247 .................................................................................................... 10
Figure 4 : Porter's 5 forces analysis of B2B ecommerce Business in India ................................................. 17
Figure 5: SWOT analysis on Mydeals .......................................................................................................... 18
Figure 6 : Product delivery channel of Mydeals247.................................................................................... 21
Figure 7: Deal forging steps ........................................................................................................................ 22
Figure 8 Organization Chart of Mydeals 247 .............................................................................................. 27
Figure 9 SWOT analysis for Metro cash and carry ...................................................................................... 28
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Acknowledgement
I would like to express my heartfelt gratitude to all the employees of Mydeals247 who made
me feel at home even though my training period was for only two months. My special
gratitude to Mr. Venu Somineni (CEO Mydeals247), Mr. Aneef and Ms. Anjali (HR Department),
Mr. Pavish (Product Category Manager), Mr. Hari, Mr. Panchasheel and Mr. Rafi (business
Development) and Mr. Prajwal (Marketing) for taking pains in helping me grasp the existing
work processes and at the same time making the environment cheerful to learn. I also thank
them for encouraging me constantly to come up with new ideas and guide me with their
invaluable life experiences. This internship experience would not be such enjoyable without my
fellow interns from IIM Kashipur, IIM Rohtak, IIM Trichy and IIM Ranchi whose passion for
excellence made the work more challenging and also fun at the same time.
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Executive Summary
Mydeals247 is another ecommerce company that is in the growth phase of lifetime. It is in the B2B
segment which differentiates it from the other players. The B2B segment has its own nuances and risks
but is a larger market than B2C. In the first part of this project, the various factors defining this new
industry segment is analyzed to find out whether it is worth to be in this business. This industry level
analysis is then examined in depth to firm level analysis. The various aspects of the firms Product, Place,
Price and Promotions and People are described to have a deep understanding of the organization.
Towards the end of the analysis, many alternative strategies emerged which can provide considerable
value addition. It is seen that in this traditional and hostile Indian environment, to collaborate with other
players is the best option that is available. One such collaboration can be Metro Cash and Carry, a B2B
retail giant based in Germany. The factor that matches both the organizations aspirations along with
the innovative ventures the merger can get into is exciting. This gives a new dimension to the B2B
ecommerce strategy which can be sustainable in the long term in India.
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Introduction
Deciding where to buy is not the easiest task for todays buyers - there is no buying power on other
eCommerce sites (which only offer fixed prices). Usually, many buyers jump from one site to another
just to look for the best deals and compare prices against many other sites. This can be very time
consuming. Every buyer looks for an opportunity to bargain on their purchases - unfortunately, online
there is no option for this now.
MyDeals247 is the world's first real-time marketplace (a patented solution). The business model is very
unique in the eCommerce industry - bargain online without any effort, real-time play between the
buyers & sellers, free business leads and live market trends to the sellers, dynamic discounts based on
the volume purchase, personalized Ads, and more.
MyDeals247 offers personalized experience to the buyers and sellers its tailored to buyers
preferences and interests. Everything about MyDeals247 will make you feel that its built exclusively for
you.
MyDeals247 is comprised of three dynamic business models:
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Business Model
A Real-time Marketplace (Bargain Online) - The entire process starts from the buyer's
requirement. The buyer can choose the product and post the request online - sellers are notified by the
System instantaneously without disclosing the buyer's contact. Sellers do not have to maintain any
inventory on the system - all the product catalog is being provided by the system itself. Sellers who trade
the product/item the buyer needs, make offers against the buyers request real-time. System picks only
the top 5 lowest offers from the sellers - these offers are ranked by the lowest price in the market. Every
seller is able to see the competitive offers from their immediate competitors (although the seller cannot
see the respective competitor name directly). Also every seller can update their offers to beat their
competitors real-time. It is absolutely a free subscription for both the buyers and sellers. There will be a
transaction fee charged from the seller, only when the transaction is successful (transaction fee depends
on the category).
(Mydeals247, 2015)
Sign up as a buyer
or seller by
providing the
basic information
Sellers dashboard
where he is able
to view buyer's
request real-time
Seller's lowest
offer of the best
possible price and
thus competing
against the
competitors
Volume Deals MyDeals247 introduces a unique approach to buy the products / services in volumes and share the same
among friends and colleagues electronically. The category list includes apparels, electronics, books,
training programs, tickets for the events, and more.
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Paid Ads
Pay Per Potential Lead: MyDeals247 showcases the ADs based on the user's current preferences,
location and interests. When the user clicks on any Ad (of personal interest), MyDeals247 showcases the
questionnaire asking a couple of questions related the Advertiser's product or service or business - if the
user answers all the questions correctly for the first time, MyDeals247 charges the cost per potential
lead from the Advertiser. If the user is not able to answer all the questions correctly, Advertiser will not
be charged at all. The advertiser can get in touch with all the users (whoever answered all the questions
correctly) and send the related offers
The cost for the "Pay Per Potential Lead" will be calculated by number of questions Advertiser wants to
ask the user:
Most users get annoyed with the random ADs these days. MyDeals247 offers personalized ADs to users
based on the current preferences, location and interests its all about what user wants, when, and
where. In fact, most of these personalized ADs are very useful and informative for the users to make the
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decision towards purchase. There is an amount being displayed on every AD (i.e. get paid Rs 10, Rs 15
etc). Every AD comes with the questionnaire asking a couple of questions related the Advertiser's
product or service or business - if the user answers all the questions correctly for the first time,
MyDeals247 pays the same amount being shown on the respective AD. If the user is not able to answer
all the questions correctly, there is no pay involved.
(Mydeals247 , 2015)
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YES
Buyer log in
Product
available
NO
The buyer gets 5
lowest prices from
sellers
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For Seller
Seller Contacts
Mydeals or vice versa
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Seller gets a
requirement via SMS
and Email
Few players online, major industry is unorganized (especially direct farmers selling).
There is very less direct interface between the producer (farmer) and the end user ( the
customer)
Customers in this segment is more concerned with the ease of transfer and quality of product.
Thus, the element of trust is vital among the firms.
Since this will take a sometime to build for any new firm, no firm can make huge market
capitalization immediately on entering the market unless it is a radical disrupter.
The above arguments suggest that the rivalry among firms in the industry is lesser.
Threat of new entrants
Due to less amount of knowledge between the producers about marketing their products, the
channels are almost constant. Hence, to set up new channels would take lot more efforts for a
person. This discourages new entrants
Also, the producers often find it lean to concentrate on product improvement and quality
control. Thus, they are comfortable to leave the next leg of businesses to people who can
absorb the risks of demand supply mismatch. This involves creation of many future contracts
which the producer is comfortable to make with a trusted person.
Thus, we can conclude that there is much threat of new entrants in this segment.
Bargaining power of buyers
The buyer in this segment is bound to make repeat purchases. This gives the sellers opportunity
have a constant demand. Thus for the sake of future business, the buyer will have some power
when negotiating the offer. They can also ask for customization.
Further, since there are a few buyers, they are often well networked. As mentioned earlier,
since this industry works mostly on trust between buyers and sellers, information about bad
product/service spreads faster. Further, in this networked age, one bad publicity can have
serious impact on the amount of loss in business.
The suppliers are often producers of the crop. They might be comparatively less in number, but
they are more or less affected equally by the irregularities of weather in India. Thus they are the
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price takers all the time. When the rains are good and produce is bounty, they lose on the price.
When the rains are scarce and produce is less, they lose on their capacity to supply.
Often there is problem of storage costs and efforts associated with any good (perishable or nonperishable). Thus, the supplier would want to get done with the goods. This gives the business
an upper hand over the suppliers or producers.
This business is mostly done offline in India from the Mandis. Thus, the shift in operations for
the b2b buyer in India yet to come. In a way, online selling in b2b can never be completely
online due to the degree of physical verification and concerns of quality verification of the bulk
product. This highlights the fact that the offline and unorganized marketplace is a major
substitute.
However, in new online businesses, the ease and transparency in doing it online increases the
user base. Once a person is comfortable in online transactions, it is highly unlikely that she will
do business offline again. There are several elements of online marketplace which are crucial in
developing and take time also. One of them is brand identity and the trust associated with it.
Another can be the business leads which almost does not deplete with time.
The above discussion indicates that the treat of substitute is high in this business.
Industry Scorecard B2B Ecommerce
Scoring each parameter on a scale of 1 (low attractiveness) to 5 (high attractiveness)
1A. The threat of rivalry
S.no. Factor
1
Number of competitors
2
Industry growth
3
4
Switching costs
6
7
Strategic Stakes
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Attractiveness Remarks
2
Direct competition with Brick and mortar
4
High growth characterized by smoother road
connectivity and increasing population
5
No inventory in Mydeals247 model
3
Some differentiation in terms of real-time
price discovery
3
The additional benefit of margin that the
buyer gets from bargaining is not available in
offline B2B as the sellers often collude to fix
prices
5
The terms of sale are fixed in contract
5
Only human resource is required which can be
easily mobilized
2
The online business network will grow as
customer base increases. Thus customer
acquisition is of high strategic stake
Average = 3.625
1B. The threat of rivalry barriers to exit
S.no. Factor
1
Asset Specialization
2
Fixed Cost of Exit
3
Govt. Restrictions
Average = 4.66
Attractiveness
5
5
4
Remarks
No specialized asset
Less
Less
Attractiveness Remarks
4
Better since only a few producers are there
who sell directly
2
Product differentiation
2
3
Brand Identity
3
Since similar products, customers go for the
brand they trust
4
Customer Switching Cost
3
much cost, some threat, moderate attractive
5
Access to Channels of
4
The seller platform is the distribution channel.
Distribution
Exclusive tie-ups can be forged to create an
exclusive distribution network.
6
Capital Requirement
1
Very little capital required, high threat of
entry, low attractiveness
7
Access to Technology / Know4
There are a host of eCommerce development
how
suites available but still there is a considerable
effort required to optimize web experience
8
Access to Raw Materials
1
Sellers are readily available
9
Govt. Policy / Protection
1
No government protection
Average = 2.55
3. The bargaining power of Buyers
S.no.
1
2
3
4
Factor
Attractiveness Remarks
Number of Buyers
3
Availability of Substitutes
1
Switching Costs
1
Buyers Threat of backward
4
The buyer is most often industries who rely on
integration
sellers for raw materials
5
Industrys threat of forward
4
integration
6
Contribution to Cost
2
Buyers are bulk always
7
Buyers Profitability
1
Bulk buyers expect higher margins
Average = 2.28
4. The bargaining power of Suppliers
S.no. Factor
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Attractiveness Remarks
1
2
3
4
5
2
4
5
Number of Suppliers
Availability of Substitutes
Switching Costs
Suppliers Threat of Forward
Integration
Industrys Threat of Backward
Integration
Contribution to quality
Contribution to cost
Industrys
Supplier
Average = 3.5
importance
to
Many suppliers
Sabzi mandis
5
2
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Attractiveness Remarks
4.14
2.55
2.28
3.5
2
Threat of new
entrants - High
Bargaining Power of
buyers - High
Bargaining power of
suppliers - Low
Threat of substitute
products - High
Conclusion of analysis
The above analysis confirms our initial estimate of industry being low to moderately attractive. The
threat of entry, substitutes and buyer power, i.e, 3 out of 5 of the forces are unattractive. Thus, as a rule
of thumb we may conclude that the industry is low to moderately attractive.
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Strengths
Weakness
No credit sales
Less brand awareness
Relatively less computer literacy
among wholesalers
Presence of Trade unions and
associations with strong nexus
with local goons.
Customized delivery not present
Opprtunity
Threats
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Web based
Mobile application based
Offline phone sales
The majority of sales in the current system is through offline sales. This is imperative considering the
nature of the business.
However, shift to Mobile based application module will be more beneficial. This is because:1. Use of intelligence about customers preferences. This is actually use of data analysis about
customers past purchases and even behavior based choices made online. This will help in giving
customized discounts to buyers and hence increase the conversion rate of purchases.
2. Few offline marketplaces for B2B customers are there which have dedicated store
establishments. These establishments along with this platform can create the next generation
marketplace design.
a. Even before the customer enters the place, his preferences can be known from his past
purchases. This information creates an instant segmentation of the customer.
b. In-store cameras placed shall track the eye movements and gestures which can give
additional information of the customers liking and wants.
c. The store area can be reduced and more products can be included. This can be made
possible with virtual product placement where in place of the physical product, a picture
of the product along with a bar code or QR code can be placed. The buyer equipped
with a mobile can scan the QR code to take the product information and place order for
the product.
These radical innovations can only be possible with a robust mobile interface.
Product Category Management
This is the core of the web-portal. Just as the sales of a product in a mall are dependent on where it is
placed, the placement of a product in a category determines the sales of the product.
Several best practices to achieve lean and extensive product category management are adopted as
follows:-
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1. The B2B buyer is well informed of the product he needs. This assumption considers that the
buyer will be aware of all the products in the market and a simple information about model
number is enough for him to know about the product that is to be sold.
2. The product should be tagged in one category only to avoid confusion.
3. The B2B requirement is no different from B2C. This is simply because the B2C demand is
channeled through the B2B only. Thus, the preference is similar. There is also emphasis in the
quality of display pictures and availability of obsolete products in the online market, just like any
other B2C website like Flipkart, Snapdeal, Ebay or Amazon.
4. The product category (Agriwatch) can be benchmarked with several industry leaders. This is
possible because this information is publicly available and there can be no patent on
classification and grouping on products.
5. The product is to be listed with proper keywords. This enables ease of searching for a particular
product. Some examples of keywords are given as under:-
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Place
The place of sales and the delivery of goods the core of the business operations of Mydeals247. The type
of delivery and documentation varies on the geographical location of the delivery location.
Source
Source
Mydeals247
Destination
Source
In both the processes, the customer and the supplier do not know each other. Hence, Mydeals247
becomes the buyer to the seller and seller to the buyer thereby eliminating counterparty risks.
In case the identities of both the parties are to be disclosed, they need to sign a Non-compete
Agreement which restricts any transaction between the parties for a period of time, maybe 1 year.
Most of the processes of this transaction happen offline.
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Mydeals247
Letter Of Intent
Letter Of Intent
Quotation
Quotation
Irrevocable Corporate
Purchase Oder
Full Corporate Offer
Non-Disclosure
Agreement
Irrevocable Corporate
Purchase Oder
Full Corporate Offer
Modified Invoice
Seller
Invoice
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Non-Disclosure
Agreement
Mydeals247 act as an intermediary between buyers and sellers. It first searches for buyers, then gets the
specific requirements from them and then finds the supplier meeting the requirements. Mydeals247
first searches buyer because the number of sellers in the market are more than the number of suppliers.
Once, buyer gets agree to make a deal with a supplier following processes are involved.
1. Buyer has to send Letter Of Intent to Mydeals247 which is forwarded to Supplier by
Mydeals247. A letter of intent is a document outlining an agreement between two or more
parties before the agreement is finalized. The most common purposes of an LOI are:
To clarify the key points of a complex transaction for the convenience of the parties
To declare officially that the parties are currently negotiating, as in a merger or joint venture
proposal
To provide safeguards in case a deal collapses during negotiation
To verify certain issues regarding payments done for someone else e.g. credit card
payments
of confidential and proprietary information or trade secrets. As such, an NDA protects non public business information. Non Circumvention Non Disclosure Agreement Instrument used in
early stages of a business transaction arranged by brokers (intermediaries). Its purpose is to
ensure that (1) the intermediaries (who brought the buyer and seller together) are not bypassed and (2) the information disclosed during the negotiations is not revealed to any external
or unauthorized party.
3. Supplier generates the invoice and then sends to Mydeals247. An invoice, bill or tab is a
commercial document issued by a seller to a buyer, relating to a sale transaction and indicating
the products, quantities, and agreed prices for products or services the seller had provided the
buyer.
4. Mydeals247 modifies the invoice as per its margin and sends modified invoice to buyers.
Modified Invoice means modifying the price after considering the margin of Mydeals247.
International
For international sales, Mydeals247 goes into a long term future contract with the buyer. The period of
the future contract can be quarterly, half yearly or annual. This long term contract will enable a constant
demand for a product. Since, on aggregation, the demand will give enough quantity to negotiate on the
terms of the contract with a single supplier or multiple suppliers.
The contract is often made including transportation (India) costs and several types of payment terms are
there.
The payment is often done as soon as the consignment reaches the destination.
Price
Pricing is dynamic in this system. The method of price discovery is as follows:1.
2.
3.
4.
5.
Using this system of price discovery, the company is providing value addition in terms of seller and buyer
matching.
Promotions
Offline Marketing (AGMARKET)
Any online business needs physical presence. This is more so in case of B2B segment since the buyers
are traditionally buying from Mandis. Thus, offline marketing is of paramount importance.
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2.
3.
4.
5.
Unfortunately, it can be really hard (depending on the niche) to get website listed in the top of
search engines.
Links Exchange.
External links never hurt. The more websites will link to the site, the more traffic. Swapping links
is easy enough. All we need to do find related websites and contact their webmasters asking
to exchange text links with you.
Link Directories.
There are thousands of link directories on the Internet. Some of them are free, and others are
paid. Having links on directories not only helps increasing search engine rankings, but also help
getting more visitors who come from directories to the site directly. The biggest free directory
on the Internet is dmoz.org
Forum Traffic.
There are thousands of webmaster forums around, and most of them have special sections
where members can reveal their websites for reviews and criticism. After posting a message
about your website, we will get not only a direct backlink, but also professional tips and criticism
from other community members.
Signatures.
Many message boards, blogs and other websites allow visitors using signatures. If links in
signatures are allowed (once again, read forum rules first), add one or more links (most sites
allow adding up to 3 links in signatures) in your own signature. Once you will post a message,
signature with backlinks to your site will be automatically inserted below message.
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Strengths
Weakness
Opportunities
Threats
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1.
2.
3.
4.
5.
6.
7.
Critical success factor (CSF) of Metro :Less layers in supply chain - from producers to customers or concentrated suppliers to
consumers
One stop store for many businesses
Strong brand with global presence (for 50 years) and also in Asia (for 20 years)- India, China,
Pakistan, VIetnam, Japan
Focus on professional customers
Advanced customer service
Internationally transferable concept
Standard (and hence uniform) layout of stores
Ideas
To translate these opportunities the following ideas can be implemented to empower the platform
and get the best value out of the deal.
Objectives
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Value propositions
1)
Provide analytics to Metro buyers (MB) who shall transact on Mydeals247 (MD) platform
a) Sales volume product-wise
b) Lowest price in market
2) Provide analytics to Metro
a) Know the Lost Sales figures. Customer Lifetime Value
b) Sentiment Analysis
c) Advertising content on the site could be improved and the products should be marketed
with more content on specifications (features) - Content Marketing
The leads generated and provided as part of the analytical support would be charged
only for the leads where the business was done and propositions were made, not for the irrelevant
leads. So from the number of leads provided the buyer can choose whom he wants to contact and only
those would be charged not every lead that is provided to the buyer.
Need to work on the revenue model, ROI measurement matrix to be given to the buyers.
3)
Wish list construction of every buyer. Benefit aggregated demand, can be promoted as a
wish day and sellers need get an aggregated demand
4) Separate community for MB on MD platform. By giving star status, we can give quality
assurance. This is another incentive to buy from Metro.
5)
Affiliate referral program (already happening)
6) Selling commodity Futures (too much away from business model)
7) QR code shop- for the future stores that are going to be opened. New strategy of metro can cut
storage costs at metro stores since products does not need to be put on display. Just the Qr
codes will do.
Real estate costs in india are 15% of the total cost compared to 8% globally and this can be
reduced by going with the QR codes.
8)
9)
10)
11)
12)
Marketing of services through Kirana Stores - eye examinations, eye glass prescription services,
tire installation, insurance services, upscale coffee, and vaccinations.
Refill concept Wholesaler need to schedule procurement at constant levels over an almost
fixed product range. We maintain a portfolio for every buyer and monitor their approximate
inventory position. We intimate their reorder point and tell them the lowest price of that
product in mydeals247
Customize online catalogues for customers.
Location based promotion and marketing.Use popular location-based services to list the offer
and attract the customers.
Display sellers on basis of a) Delivery b) Price
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References
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