IS731 Report 2

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University of Maryland, Baltimore County *

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Apr 3, 2024

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IS 731 : Electronic Commerce Name : Parthiv Gandhi Campus ID : FV59132 Report 2 Professor : A. Ant Ozok University of Maryland Baltimore County Spring 2023

Introduction: In today's highly digitized world, the role of e-commerce has become more significant than ever before. Businesses are looking to tap into the potential of the internet to reach customers, facilitate transactions, and streamline operations. In this context, Framework, a fictional electronics company that specializes in repairing lightweight laptops and consumer electronics products, is embarking on a new venture. The goal is to establish a virtual Business-to-Consumer e-commerce company that leverages the power of the internet to expand its reach, provide better service to customers, and create new growth opportunities. To achieve this objective, Framework needs to analyze the electronics industry, identify the technological challenges, understand the emerging business models, and evaluate customer needs. This will require a comprehensive analysis of various aspects of the business, including the industry's competitive landscape, the necessary infrastructure, the most effective business models, and the target customers. By conducting a thorough analysis of these factors, Framework can create a robust business strategy that aligns with its goals, strengths, and customer needs. The analysis will begin with an industry analysis, which will provide an overview of the electronics industry and identify the current business models used by companies. This analysis will also highlight the technological challenges faced by the industry, as well as emerging models that could shape its future. Next, the infrastructure analysis will evaluate the IT infrastructure required for Framework to operate a successful e-commerce business. This analysis will also identify the infrastructure used by other companies in the industry.

The model analysis will then focus on the different business models that Framework could implement to achieve its goals. This analysis will consider the constraints imposed by competition and identify potential collaborative opportunities with other firms. Finally, the product and customer analysis will provide insights into Framework's target customers, their needs, and preferences. This analysis will also evaluate the strengths and weaknesses of Framework's products and services and how they compare to those of its competitors. Through this comprehensive analysis, Framework can create a roadmap for success in the e- commerce space. By leveraging the power of the internet and implementing the right strategies, Framework can achieve its goal of providing people and planet-friendly consumer electronics products that are easy to upgrade, customize, and repair. Industry analysis: The electronics industry is a highly competitive and rapidly evolving sector that has undergone significant changes in recent years. The current business model in the industry involves manufacturing and selling a wide range of consumer electronics products, such as laptops, smartphones, and tablets, among others, to consumers through various distribution channels, including physical stores, online platforms, and e-commerce websites. The industry has witnessed a significant shift towards e-commerce platforms, with more and more consumers opting for online shopping due to the convenience it offers. However, the current business model in the electronics industry faces several technological challenges, including the development of new technologies, such as artificial intelligence, machine learning, and blockchain, among others, which are transforming the way businesses

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operate. The industry also faces challenges related to data security, privacy, and cybersecurity threats, which can have severe implications for businesses and consumers alike. Emerging models in the electronics industry include the development of smart products, such as smart homes and Internet of Things (IoT) devices, which can be controlled remotely using smartphones and other devices. The industry is also witnessing the emergence of circular economy models, which focus on sustainable production and consumption patterns, and the promotion of product reuse and recycling. The electronics industry, more specifically in our case, the laptop manufacturing industry is a highly competitive sector, with several leaders vying for market share. The current business model of the industry involves designing, manufacturing, and marketing a range of laptops to consumers through various distribution channels, such as physical stores, online marketplaces, and e-commerce platforms. Global personal electronics market by product, 2012 – 2020 (Million Units)

Some of the leading laptop manufacturers in the industry include Dell, Lenovo, HP, Acer, Asus, and Apple. These companies have achieved their leadership positions through a combination of factors, including innovation, quality, brand reputation, and market presence. Dell is a leading player in the laptop industry, with a strong focus on business and enterprise customers. The company has built a reputation for delivering high-quality laptops with robust security features and excellent customer service. Dell has also been at the forefront of innovation in the industry, with its XPS and Alienware product lines. Lenovo is another key player in the laptop industry, with a diverse range of products catering to different customer segments. The company has built a reputation for producing reliable and affordable laptops with excellent build quality. Lenovo has also invested heavily in innovation, The top 5 PC companies by sales, worldwide.

with a strong focus on developing products that cater to emerging trends, such as hybrid laptops and gaming laptops. Apple, while not traditionally considered a laptop manufacturer, has also made a significant impact in the laptop industry with its MacBook product line. Apple's focus on design, quality, and user experience has helped it establish a loyal customer base and gain a significant share of the high-end laptop market. The electronics industry faces several social, organizational, behavioral, and legal issues. Social issues include concerns around the environmental impact of electronic waste and the ethical implications of data collection and usage. Organizational issues include challenges related to supply chain management, production efficiency, and strategic partnerships. Behavioral issues include consumer behavior, such as preference for certain brands and products. Legal issues include intellectual property rights, data privacy, and consumer protection laws. In summary, the electronics industry is a highly dynamic and competitive sector that is witnessing significant changes in its business model. The industry faces several technological challenges and is witnessing the emergence of new models, including circular economy and smart products. The leaders in the industry have achieved their positions through innovation, strategic partnerships, and aggressive marketing campaigns. The industry faces several social, organizational, behavioral, and legal issues, which need to be addressed to ensure sustainable growth and development.

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Infrastructure Analysis: The success of a virtual business-to-consumer e-commerce company like Framework relies heavily on the proper implementation of information technology infrastructure. The information technology infrastructure required for Framework's business includes hardware, software, network connectivity, and data storage. To begin with, Framework requires a robust computer system that can support the operations of the company, such as managing orders, inventory, and shipping. The company also requires specialized hardware and software for repairing and upgrading consumer electronics products. Additionally, Framework requires a secure network infrastructure to protect sensitive customer data and prevent cyber threats. In terms of B2B, Framework could collaborate with major CPU/GPU manufacturers like Intel, Nvidia, and AMD to receive modular components that can be used in their laptops. By creating a modular design for their laptops, Framework can provide users with the ability to upgrade their laptops over time, which can be particularly valuable for business customers that require the latest hardware to run demanding applications. Collaborating with these companies can also provide Framework with access to the latest technology and ensure that their laptops are compatible with a wide range of software applications. For implementing mobile commerce, Framework would need to develop a mobile application that provides an optimized user experience on mobile devices. This would require additional infrastructure such as a mobile app development platform, server-side APIs, and mobile device testing tools.

To implement collaborative commerce, Framework could set up a community marketplace where users can design and sell their own USB-C modules. This collaborative commerce platform would allow users to contribute to the development of Framework's products and creates a sense of ownership and engagement among the community. By enabling users to create and sell their own modules, Framework can leverage the collective knowledge and expertise of its user base to improve its products and foster a sense of community around the brand. This can be particularly valuable for businesses that require specialized hardware for their operations and can benefit from the ability to customize their laptops to meet their specific needs. In the electronics industry, different companies use a variety of IT infrastructure solutions to support their businesses. For instance, Apple has invested heavily in proprietary hardware and software to create a seamless and integrated user experience across its products. Dell, on the other hand, has focused on building a robust supply chain and logistics network to deliver high- quality products to customers quickly and efficiently. Lenovo has invested heavily in cloud infrastructure and software-defined networking to create a flexible and scalable infrastructure that can adapt to changing business needs. HP has focused on developing secure and reliable systems to protect customer data and prevent cyber threats. Acer and Asus have both leveraged their partnerships with component suppliers to deliver affordable and high-quality laptops to customers. These companies have also invested in e- commerce platforms and digital marketing strategies to reach a wider audience of customers. In conclusion, the information technology infrastructure required for Framework's business includes hardware, software, network connectivity, and data storage. To implement B2B, mobile,

and collaborative commerce, Framework would need additional infrastructure such as software for managing orders and payments, mobile app development platforms, and collaboration tools. Different companies in the electronics industry use a variety of IT infrastructure solutions to support their businesses, with a focus on innovation, supply chain management, cloud infrastructure, security, and partnerships with component suppliers. Model Analysis: In the e-commerce industry, there are several common business models used, including B2B, B2C, C2C, and marketplaces. Framework's e-business can be considered a hybrid model, as it includes elements of both B2C and C2C models, with the added dimension of modular upgrades and customization. In terms of the B2C model, Framework would sell its laptops directly to customers through its website, with the added feature of modularity and customization. The company could also offer repair services for lightweight laptops and consumer electronics products, creating a revenue stream beyond product sales. The C2C model is also incorporated through the community marketplace where users can design and sell their own USB-C modules, allowing for peer-to- peer transactions. To achieve its pending goals of implementing B2B and collaborative commerce, Framework could adopt additional business models such as B2B2C and platform models. The B2B2C model involves Framework partnering with businesses that need modular and upgradeable laptops for their employees. This model can help Framework to expand its reach and increase its sales

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revenue, while also providing businesses with laptops that can be customized to meet their specific needs. The platform model can also be used to facilitate collaborative commerce by providing a platform for users to collaborate, design, and sell their own laptop components. Framework could also collaborate with other hardware manufacturers and component designers to offer a wider range of modular components. By expanding the platform beyond just USB-C modules, Framework can create an ecosystem of modular components that can be used to upgrade and customize a wide range of laptops. In terms of competition, Framework faces several constraints. The market for lightweight laptops is highly competitive, with major players such as Dell, Lenovo, and HP dominating the market. These companies have established brand recognition, extensive distribution channels, and economies of scale, which can make it difficult for smaller companies like Framework to compete on price and marketing efforts. To overcome these constraints, Framework can differentiate itself through its focus on modularity, customization, and repairability. By emphasizing the environmental and cost benefits of upgrading and repairing laptops rather than replacing them, Framework can attract customers who are looking for more sustainable and cost-effective options. Additionally, by providing a community marketplace for users to design and sell their own modular components, Framework can create a sense of community and engagement around its brand, which can help to differentiate it from its competitors.

Different firms can collaborate in a model through various forms of partnerships and collaborations. Framework could collaborate with hardware manufacturers to receive modular components for their laptops, as mentioned earlier. Additionally, Framework could collaborate with repair service providers to expand its repair services and offer a wider range of repair options to its customers. Collaborating with other hardware manufacturers and component designers on the platform model can also help to expand Framework's ecosystem of modular components, attracting more customers and creating more value for its users. In conclusion, Framework's hybrid model of B2C and C2C can be expanded through the adoption of additional business models such as B2B2C and platform models to achieve its pending goals of implementing B2B and collaborative commerce. Constraints posed by competition can be overcome through a focus on modularity, customization, and repairability, while collaborations with other firms can be formed to expand the range of products and services offered to customers. Selecting a Business model Selecting the right business model is crucial for the success of any virtual company, especially when expanding into mobile commerce, B2B marketplace, and collaborative commerce. After conducting a thorough analysis of the industry, infrastructure, and target customers, I have identified the platform business model as the most suitable for Framework's e-commerce company. This model offers several advantages and aligns well with Framework's goals, strengths, and customer needs.

The platform business model, also known as a multi-sided platform, revolves around creating a digital marketplace where multiple participants can interact and exchange value. In the context of Framework's e-commerce venture, this model involves establishing a platform that connects consumers, businesses, and collaborators in the electronics industry. Here's why I believe this model is the best choice for Framework: 1. Increased reach and customer base: By implementing a platform model, Framework can tap into a broader customer base and expand its reach beyond traditional brick-and- mortar boundaries. The platform will attract both individual consumers and businesses looking for lightweight laptop repairs and other consumer electronics services. This expanded customer base will enable Framework to achieve higher sales volumes and growth opportunities. 2. Enhanced customer experience: A platform model allows Framework to offer a seamless and convenient experience to its customers. Through a well-designed website or mobile Platform Business Model

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app, customers can easily browse products, compare options, and make purchases. Additionally, the platform can incorporate features such as personalized recommendations, customer reviews, and efficient customer support, enhancing the overall shopping experience. 3. Facilitated B2B marketplace: As Framework expands into the B2B space, the platform model enables the company to connect with other businesses in the electronics industry. This opens up opportunities for Framework to offer specialized services, such as bulk repairs for corporate clients or partnering with original equipment manufacturers (OEMs) for warranty repairs. By facilitating B2B transactions, Framework can establish mutually beneficial relationships with suppliers, distributors, and other industry stakeholders. 4. Collaborative opportunities: The platform model provides Framework with the potential to collaborate with other companies and individuals in the electronics industry. Framework can leverage the platform to offer value-added services, such as connecting customers with trusted repair technicians or partnering with electronics recycling companies to promote sustainability. Collaboration can enhance Framework's brand reputation, attract more customers, and create a network effect where the platform becomes increasingly valuable to all participants. 5. Data-driven insights and monetization opportunities: As a platform, Framework can gather valuable data on customer preferences, buying behavior, and market trends. By analyzing this data, the company can gain insights into emerging needs, optimize its product offerings, and tailor marketing campaigns to target specific customer segments. Furthermore, Framework can explore monetization opportunities through data-driven

advertising, partnerships, or premium services offered to customers and businesses on the platform. By adopting the platform business model, Framework can leverage the power of digital technology, expand its business into mobile commerce and B2B marketplace, and foster collaboration within the electronics industry. This model offers a scalable and sustainable approach to growth, while also providing a superior customer experience. Through the platform, Framework can position itself as a trusted and convenient destination for lightweight laptop repairs and consumer electronics services, attracting a diverse range of customers and driving business success in the e-commerce space. IT Strategy: Developing an IT strategy is crucial for Framework's successful expansion into mobile commerce, B2B marketplace, and collaborative commerce. Considering the scope of the expansion and the complexity of the required IT infrastructure, a cost estimate of approximately $1.2 million will be necessary. Here is a complete breakdown of the costs for the IT strategy: 1. Website and Mobile App Development: To establish a robust online presence and enable mobile commerce, Framework will need to invest in the development of a responsive website and a mobile application. This includes the design, front-end and back-end development, user interface and user experience (UI/UX) design, and integration with the necessary systems and databases. The estimated cost for this development is $400,000.

2. E-commerce Platform: Framework will require a reliable and scalable e-commerce platform to handle transactions, inventory management, and customer data. The platform should also support B2B marketplace functionalities, such as bulk ordering, invoicing, and customer segmentation. Licensing or subscription fees for the chosen platform, including customization and integration, are estimated to be $200,000. 3. Infrastructure and Cloud Services: Building a robust IT infrastructure is essential for the smooth operation of the e-commerce platform and related systems. This includes servers, networking equipment, security measures, and cloud services for data storage and backup. The estimated cost for infrastructure setup and cloud services is $300,000. 4. Data Analytics and Business Intelligence: To leverage data-driven insights and make informed business decisions, Framework needs to invest in data analytics and business intelligence tools. This includes the setup and customization of analytics software, data integration, and dashboard creation. The estimated cost for data analytics and business intelligence implementation is $150,000. 5. Security and Compliance: As an e-commerce company, Framework needs to prioritize cybersecurity and compliance with data protection regulations. This involves investing in secure payment gateways, SSL certificates, data encryption, and regular security audits. The estimated cost for security measures and compliance is $100,000. 6. Integration and API Development: Framework will require integrations with third-party systems and APIs to support various functionalities such as payment gateways, shipping providers, inventory management, and customer relationship management (CRM) software. The estimated cost for integration and API development is $50,000.

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7. IT Staffing and Training: To manage the IT infrastructure and ensure smooth operations, Framework will need to hire skilled IT professionals, including developers, system administrators, database administrators, and security experts. The cost for IT staffing and training, including salaries and training programs, is estimated at $200,000. Total IT Strategy Cost: $1,200,000 Considering the estimated cost of $1.2 million, the affordability of the IT strategy depends on Framework's available budget and financial resources. If Framework secured sufficient funding or investment to support the IT strategy, it may be considered affordable. Additionally, if the expansion into mobile commerce, B2B marketplace, and collaborative commerce is expected to yield significant returns and growth opportunities, investing in a robust IT infrastructure becomes crucial for long-term success. Cost Category Estimated Cost Website and Mobile App Development $400,000 E-commerce Platform $200,000 Infrastructure and Cloud Services $300,000 Data Analytics and Business Intelligence $150,000 Security and Compliance $100,000 Integration and API Development $50,000 IT Staffing and Training $200,000 Total Estimated Cost $1,200,000

The security that Framework can provide to creditors for the IT strategy implementation is the detailed financial analysis and projections, demonstrating the company's ability to generate sufficient revenue and cash flow to repay the debt. The time required to implement the IT infrastructure depends on various factors such as the complexity of the systems, the availability of resources, and the expertise of the development team. However, as a rough estimate, it may take approximately 6-12 months to fully implement the IT infrastructure and launch the virtual e-commerce platform. Implementation Strategy Framework will implement its new business plan in the areas of mobile commerce, B2B marketplace, and collaborative commerce by following a phased approach. This involves conducting market research, developing the necessary IT infrastructure, establishing partnerships, and launching targeted marketing campaigns. The implementation will be carried out by a dedicated team, ensuring smooth execution and timely delivery of the project. The new business plan introduces significant additions to the old plan. The old plan focused primarily on repairing lightweight laptops and consumer electronics products through traditional brick-and-mortar stores. In contrast, the new plan involves expanding services into mobile commerce, establishing a B2B marketplace, and fostering collaborative commerce, gaining the attraction of younger audiences. This requires the development of a robust online platform, integration with third-party systems, and building strategic partnerships with businesses and industry stakeholders.

The new model brings along several challenges and risks. These include adapting to the rapidly evolving mobile commerce landscape, ensuring seamless integration and compatibility across different devices and platforms, managing increased complexity in supply chain and logistics for the B2B marketplace, and fostering collaboration and trust among different participants in the collaborative commerce ecosystem. Additionally, cybersecurity threats, data privacy concerns, and competition in the online space pose additional risks that need to be addressed effectively. The new user interface of Framework's virtual platform will be designed with a focus on user- friendliness, intuitiveness, and seamless navigation. It will feature a responsive design to ensure compatibility across various devices, including mobile phones, tablets, and desktops. The interface will provide easy access to product catalogs, personalized recommendations, customer reviews, and streamlined checkout processes. The goal is to deliver a visually appealing, user-

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centric interface that enhances the overall shopping experience and encourages customer engagement and satisfaction. Product or Service & Customer Analysis Framework is a technology company that is focused on developing lightweight, repairable, and upgradeable laptops and consumer electronics products. The company's main goal is to create a sustainable and environmentally friendly alternative to the traditional tech industry. The company's first product, the Framework Laptop, has received a positive response from the press and customers alike. In this section, we will delve deeper into Framework's product and customer analysis, exploring the unique features of the company's products and the customers who are drawn to them. Product Analysis Framework's primary product is the Framework Laptop, a modular laptop that can be easily taken apart and upgraded with new components. The company also offers a range of consumer electronics products that are designed to be easy to repair and upgrade, reducing electronic waste and creating a more sustainable tech industry. The Framework Laptop has several unique features that set it apart from traditional laptops, including: 1. Modularity: The Framework Laptop is designed to be modular, which means that users can easily swap out components like the RAM, storage, and Wi-Fi card. This makes the laptop more versatile than traditional laptops and allows users to upgrade their device over time, instead of having to buy a new laptop every few years.

2. Repairability: The Framework Laptop is also designed to be easy to repair, with modular components that can be easily replaced if they break or become outdated. The laptop is held together with screws instead of glue, which makes it easier to take apart and repair. 3. Sustainability: By focusing on modularity and repairability, Framework is promoting a more sustainable tech industry. The company's products are designed to last longer and reduce electronic waste, which is a major problem in the tech industry. 4. Community Marketplace: Framework has also set up a community marketplace where users can design and sell their own USB-C modules. This allows for even more customization and flexibility for customers, who can choose from a wide range of modules to add new features to their laptop. Customer Analysis Most common products and the associated reasons behind an unsuccessful repair.

Framework's primary customers are tech-savvy individuals who are environmentally conscious and prefer to have control over their electronics devices. The company's target customers are those who are looking for products that can be easily upgraded and repaired. These customers are typically aware of the environmental impact of the tech industry and prefer to purchase products that are built to last and can be easily fixed. In terms of demographics, Framework's customers are likely to be younger, more educated, and have a higher income than the average consumer. These customers are also more likely to be early adopters of new technology and are interested in customizing their devices to fit their specific needs. Customer Perception Customers appreciate Framework's focus on sustainability and repairability. The ability to upgrade and repair products not only saves customers money in the long run but also reduces electronic waste. Framework's laptops are also designed to be more versatile than traditional laptops, with a range of modular components that can be swapped out to add new features or upgrade the device. However, some customers have noted that the initial cost of Framework's laptops can be higher than traditional laptops, and the community marketplace for USB-C modules may not be as robust as they would like. Additionally, some customers may be hesitant to take on the task of upgrading or repairing their laptop, preferring to have a professional handle these tasks for them. Overall, customers appreciate Framework's unique approach to electronics and value the ability to customize and repair their devices. The company's focus on sustainability and repairability is a

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major selling point for environmentally conscious customers who are looking for a more sustainable alternative to the traditional tech industry. Framework's laptops are well-designed and offer a range of unique features that set them apart from traditional laptops, making them a compelling choice for customers who are looking for a more versatile and sustainable device. Conclusion: In conclusion, after conducting a comprehensive analysis of the electronics industry, infrastructure requirements, target customers, and business models, Framework is well- positioned to establish its Business-to-Consumer e-commerce company. The selected platform business model offers a scalable and collaborative approach, connecting consumers, businesses, and industry stakeholders in the virtual ecosystem. This model aligns with Framework's goal of expanding into mobile commerce, B2B marketplace, and collaborative commerce, providing opportunities for growth, enhanced customer experiences, and strategic partnerships. To support the implementation of the business model, Framework's IT strategy focuses on developing a robust IT infrastructure, including website and mobile app development, e- commerce platform integration, data analytics capabilities, and security measures. This strategy ensures a seamless user experience, effective B2B marketplace functionalities, data-driven insights, and a secure online environment. With an estimated cost of $1.2 million, the budget for the IT strategy should be carefully evaluated based on Framework's financial position and growth projections. In conclusion, by leveraging the selected platform business model and implementing a well- defined IT strategy, Framework can successfully navigate the challenges and capitalize on the

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opportunities in the electronics industry. With a focus on sustainable and customizable products, a customer-centric approach, and the power of digital technology, Framework is poised to create a niche in the market, meet customer demands, and drive business success in the e-commerce space. References: Sabbaghi, M., Cade, W., Behdad, S., & Bisantz, A. M. (2017). The current status of the consumer electronics repair industry in the U.S.: A survey-based study. Resources, Conservation and Recycling , 116 , 137-151. https://doi.org/10.1016/j.resconrec.2016.09.013 Computerworld. (2022, January 12). PC sales fell hard in 2022. Retrieved March 29, 2023, from https://www.computerworld.com/article/3685433/pc-sales-fell-hard-in-2022.html Grand View Research. (2021). Personal Consumer Electronics Market Size, Share & Trends Analysis Report By Product (Audio/Video Devices, Personal Care Products), By Region, And Segment Forecasts, 2021 - 2028. Retrieved March 29, 2023, from https://www.grandviewresearch.com/industry-analysis/personal-consumer-electronics-market Parker, J. (2019, May 30). Can I buy a future-proof laptop to last 10 years? The Guardian. Retrieved March 29, 2023, from https://www.theguardian.com/technology/askjack/2019/may/30/can-i-buy-a-future-proof-laptop- to-last-10-years

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Retail Dogma. (n.d.). Brick-and-Mortar Retail vs. Online Retail. Retail Dogma. Retrieved from https://www.retaildogma.com/brick-and-mortar-retail-vs-online-retail/ Rahman, K. S., & Thelen, K. (2019). The rise of the platform business model and the transformation of twenty-first-century capitalism. Politics & society, 47(2), 177-204.

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