Cost Benefits And Potential Of Online Sale Of Sports Goods From Pakistan: Case Study Of Forward Sports Essay.

Introduction to the Literature Review

Discuss about the Business Capstone Project for Case study of Forward Sports.

Like every other Asian and European countries Pakistan has excelled itself in sports. The demand of sports has been increasing over time. In addition, the country has started participating in large sports programs. Therefore, the demands of sports goods have also been increasing rapidly. This has opened up the path for the organizations that provide sports goods to build the business in Pakistan. Most of the large sports brands like Adidas, Nike, Reebok and other sports have paid attention to penetrate in the market of Pakistan. However, as the business environment has become dynamic in nature, the brands or the organizations have to look for the ways that strengthen their business and bring in the desires profits. In this context, Bryde, Broquetas and Volm (2013) commented that major challenge for the organizations is to expand the business or their reach as opening stores in new locations requires huge investment. Therefore, instead of physical expansion, selling the goods online is a significant option that offers the opportunity to the brands to accesses and meets the needs and demands of the products.

The best part of online selling is that it allows the organizations to conduct their business without making large investment on the taken initiative. As mentioned by Klaus (2013), the development of Internet has generated a new pattern of the traditional way of sopping. Likewise, the customers no longer want to spend time in searching for the products in opening location. Therefore, it can be added that the internet has become a new medium for the communication as well as the exchange of information which has been there in daily life of people. As opined by Czinkota and Ronkainen (2013), the development of IT services largely contributed to the implementation of the initiative of selling products online. It is also observed that marketers are largely focusing on the trends of e-commerce. The organizations have found the feasible solutions to sinking business sector of the Pakistan. Many large organizations have embraced e-commerce for the development of the business ad they have been progressing through this particular tool for long.

In addition, this has been conspicuous that online businesses play a significant role in the international economy. In this context, Pickernell et al. (2013) commented that internet could make it easier for businesses to have information on the products available to their potential consumers. An organization could meet their individual needs of consumer information to a lower cost per report to the delivery of products. In this context, Cullen and Parboteeah (2013) discussed the relationship between the marketing strategies and the consumer behaviour. The author has mentioned that the strategy revolves around profitability as well as the frequency of buyer behaviour.

Defining the 1st key Word

H₀- The invention of internet and development IT infrastructure have contributed to the selling of products online

H₁-The e-commerce business has opened up new ways for accessing the markets within a short time making small investment

H₂-Large sports brands have got the access to penetrate in the economically poor segments of the market leveraging small amount of capital and earn desired amount of profits through the trends of e-commerce.

E-business largely influencing the global economy

The impact of e-commerce is one that has brought in a drastic change in the conventional market. As commented by, Rahimnia and Hassanzadeh (2013) E-commerce has widely been embraced since it has clicked immensely for many businesses. It can be added that the techniques of online selling has largely helped the small and medium organizations that do not have large capital to reach the target market. Subsequently, small and large organizations are providing the services to the customers without having any physical expansion of the business in the target market (Mohapatra 2013).

• Easy reach to the customers in the targeted market
• Free from the investment of physical expansion

• Consumers have the major concern regarding the security system
• Maintenance of websites
• Website stickiness and customer loyalty
• Cost

It is evident that e-commerce has strong impact on the global economy as the e-commerce includes different business transactions namely business to business (B2B), business to consumers (B2C) and B2G (Business to government) (Eid and El-Gohary 2013). In addition, the Internet has become the fundamental choice for the electronic commerce. Thus, the invention and the development of internet could certainly influence the global economy since all organizations are considering the trends of e-commerce as the way of accessing new market within short-time.

“Trends of e-commerce provides unprecedented opportunities to both developing and developed nations”

As the trends of e-commerce have still been gaining the popularity due to the idea of e-commerce, which has just been applied in the field, the some of the small and medium size organizations are trying to deal with the potential barriers associated with the idea. As commented by Chong (2013), in the short-run, the gains are probably to be observed in the developed countries; however, in the long run developing countries have to put more effort to gain the benefits. This happens due to the fact that developing countries lack the infrastructure required to gain the full advantage of the internet (Haufler 2013). However, in the long run these developing countries like Pakistan could skip some of the stages in the development IT through which the developed countries like UK, Australia have to pass (Hill, Cronk and Wickramasekera 2013).

Providing Strengths and Weaknesses

Table 1: Growth of E-commerce in Asian countries (2015)

(Source: Eid and El-Gohary 2013)

Graph 1: Growth of E-commerce in Asian countries

• Internet is gradually providing the opportunities for B2B, B2C and B2G through the nations
• Low investment and maximum profits

• Under developing countries do not have the infrastructure to use implement internet for developing the business

While comparing the advantages and disadvantages of online selling, it has been identified that apart from few infrastructure and technical barriers, the implementation of e-commerce brings in a huge amount of return on investment. On the contrary, as the large sports brands in Pakistan do not get the full access due to some country regulations, unstable political environment, there is state of deficiency in the supply of the products despite the increasing demand (Coughlin and Novy 2013). In addition, Pakistan has increasing population; thereby, the marketers find optimal opportunities for expanding the business accessing the targeting market. However, unstable economic environment, continuous war large sports brands lack interests in expanding the business in Pakistan.

“Effects of online selling trade on global trade and employment”

The consumption of internet could make the technique initiating and conducting the trade easier and faster with less expense. As mentioned by Klaus (2013), the gathering information appears to be a costly activity. In addition, these costs may appear to be high and substantial challenge to the business. Searching the right supplier of sports goods and specifying product’s requirements as well as marketing of those products seems to be very expensive. Therefore, with the help of internet and applications of e-commerce, the entire range of these activities without forming relationship between the buyer and seller, the brands could satisfy the needs of the end users. As opined by Czinkota and Ronkainen (2013), the internet could likely promote business in the similar way as lifting other business challenge would. Therefore, it can be mentioned that volume or the range of international business is likely to increase. In addition, it has also been identified that internet when organized within the electronic markets via e-commerce applications decrease the cost of information and allows the customers and the sellers communicate electronically.

• E-commerce could continuously influence the trade services. One of the most relevant changes in the trade is e-commerce’s as well as IT’s ability to make non-tradable service into tradable

• A technical enhancement reduces the expense of transactions and generates a large amount of profits compared to the triangular efficiency opportunities from the trade liberalizations.

As online selling and trends of e-commerce provide different trade opportunities for expanding the business for developing and developed countries, as sports brands in Pakistan may not gain those opportunities (Cullen and Parboteeah 2013). For example, it is observed that the potential advantages from global e-commerce to a developing country Pakistan from a decrease in the expense of imports, which is similar to the increase in the price gained for exports. It was also studied in the literature review that e-commerce continues to strengthen its impact on the employment as well as the wages may be the result of emerged complex set of interactive forces. Therefore, it can be mentioned that electronic commerce is likely to create directly and indirectly new employment opportunities.

Analysing the Hypotheses

On the contrary, it has also been identified that indirect creation of employment could occur through increasing demand and productivity. In this context, Mohapatra (2013) argued that the employment opportunity might lack when the online selling retailers substitute for the conventional ways of conducting the business. Hence, the employment opportunity may lack. Therefore, hence, the under developing country like Pakistan needs to develop its infrastructure of information technology as certain IT skills are required to operate e-commerce in the country. Again, this may create employment opportunity in the country.

Dynamic scenario of sports industry in Pakistan

The size of the domestic sports market is comparatively small because the Pakistan society mostly focuses on the Islamic studies (Chong 2013). Thus, the sports are yet not treated as the means of livelihood. Instead, it is still now considered as the source of entertainment. This leads to less participation in the sport sector. There have also been some other challenges such as the non-availability of IT infrastructure, which could facilitate the access online trading and existing inability for the facilities as well as purchase sports. Notwithstanding, Pakistani Government has now started spending more on the sports goods (Eid and El-Gohary 2013). However, sports are yet treated as a recreational activity; therefore, the consumption rate of recreational activities is growing in Pakistan. This is one of the significant opportunities for the online retailers to get into the market.

Figure 2: Consumer expenditure of sports goods by 1993-2012

(Source: Haufler 2013)

• A significant segment of population in Pakistan has turned to fitness as well as exercise as the element of developing lifestyle. A considerable number of sports equipment sold out by the manufacturers through online shopping networks. The development of new sports also has impact on the youngsters in Pakistan.

• Less demand of sports programs in Pakistan influencing the sports brands

It was studied in the literature review that geographical location could be significant in retailing. The sports goods customers are not certain what they wish to buy to become able to make comparison among different types of shops and retailers (Haufler 2013). Hence, the significance of geographical locations referred to the domestic market power that can be high as well as the ability to find the right location for trading, which appears to be a significant barrier. Conversely, online selling techniques make it easy for the marketers to focus on the target market. With the access of internet, the sports brands could retrieve the information regarding the needs and demands of the products. On the other side, by adopting traditional ways of trading, the marketers take a lot of time to meet the needs of the customers (Coughlin and Novy 2013). At the same time, other brands following the traditional ways find the rush to access the markets. This eventually results to the increasing competition.

Conclusion

On the completion of the report, it can further be added that trends of online selling of products have large impact on both domestic as well as the global economy. Although, there have been different challenges in the form IT infrastructure, country regulation, downturn in the economy, the online retailers find the ways of accessing the market in Pakistan. In addition, as the trends of online shopping have become popular in the current days, it is expected that trends of e-commerce could quickly access the market and build the trust among the customers regarding habit of buying products online.

Reference List:

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Chong, A.Y.L., 2013. A two-staged SEM-neural network approach for understanding and predicting the determinants of m-commerce adoption.Expert Systems with Applications, 40(4), pp.1240-1247.

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