E-commerce Business In Saudi Arabia

E-commerce Business in Saudi Arabia 1

E-COMMERCE BUSINESS IN SAUDI ARABIA

Course

Professor’s Name

Institution

City, State

Date

E-commerce Business in Saudi Arabia 2

E-COMMERCE BUSINESS IN SAUDI ARABIA

About the Business

The name of the company to be introduced in Saudi Arabia is SaudiMat™, which shall

be an online retailer specializing in a wide range of retail products, including electronics,

apparel, footwear, furniture, sporting equipment, groceries, food, and cosmetic products among

others. The corporation shall have its main store in Riyadh with other stores located in the

different major cities of the Kingdom. Its vision statement is to touch the lives of millions of

people through offering the highest quality services and products to clients at the most

affordable prices. In addition, the mission statement of the organization is to be a regional

leader in retailing e-commerce and one-stop-shopping choice for everyone. The business

statement that shall drive the organization towards the realization of the identified vision and

mission statements is ‘good is never the best.’

E-commerce Business in Saudi Arabia 3

Description of the Processes of SaudiMat™

The organization shall operate through the business-to-consumer model of e-commerce.

This model means that the corporation shall be retailing its products directly to its clients

(Morris, Schindehutte, & Allen, 2005). Clients would have an opportunity to view products

offered for sale directly and place their orders, which would then be processed by the company

staff for delivery within the shortest time possible. The choice of this business model is the fact

that it allows the company to interact directly with its clients, which could be useful in

determining their preferences through market surveys (Morris, Schindehutte, & Allen, 2005).

The fact that the organization shall operate using the business-to-customer model suggests that it

would deliver customer-oriented services and products that place the highest significance on the

role of the customer in its overall success. Figure 1 indicates the business-to-client model that the

company shall adopt.

Figure 1: the business-to-customer model of e-commerce that SaudiMat™ shall adopt

SWOT Analysis of the Business

The SWOT analysis is a tool used in the assessment of the internal environment of an

organization according to its strengths, opportunities, weaknesses, and threats. Companies

E-commerce Business in Saudi Arabia 4

always use their strengths and opportunities as the most significant factors influencing their

operations. Specifically, the two elements are used to compensate the weaknesses and threats

that are undesirable for effective operations on any organization. Table 1 indicates a SWOT

analysis of SaudiMat™

Strengths

 The company has diversified its nature of

products, which means that it offers a wide

range of products from which clients can

choose to carter for their tastes and

preferences

 The organization’s adoption of the e-

commerce model indicates that it would

have an access to a large customer base

within a short time compared to the

benefits it would have driven from

conventional approach to business

 The company has a team of dedicated

human resources who would increase

customer satisfaction through the delivery

of high-quality services

 The mission and vision statements of the

company mean that it only provides

customer-oriented services, which is a

source of competitive advantage

 The organization has a huge capital base

that it may use to enter the market by

taking on considerable risks for higher

returns

Weaknesses

 The organization does not have a

strong brand equity for the fact

that it is a start-up business

 The organization does not have

significant experience in e-

commerce, which means that it

might compare negatively against

its competitors

 The organization does not have a

strong supplier network, which

would ensure sufficient supplies

of products for stocking

Opportunities

 The organization has the chance of

benefiting from the growing popularity of

e-commerce in the Gulf region, especially

in Saudi Arabia to grow the volume of its

ventures

 The socio-economic transformations in the

country are favorable for businesses of the

nature of SaudiMat™, which suggests that

the company would be welcomed into the

market effectively

 The relatively stable and growing economy

of the Kingdom of Saudi Arabia suggests

Threats

 The retail industry is one of the

most competitive in the world

and in Saudi Arabia, which

suggests that the business might

fail to enter the market effectively

(Moatti et al., 2015)

 Unfavorable weather conditions

suggest that the company might

have issues competing with more

established brands for limited

suppliers in its groceries line of

business

E-commerce Business in Saudi Arabia 5

that the business has an opportunity to

grow within the shortest time possible

 A supportive political environment for

entrepreneurship suggests that the

organization is likely to meet with only a

few challenges that would threaten its

success.

Table 1: SWOT analysis of SaudiMat™

The SaudiMat™ Website

The website of the company will have an interactive platform that would welcome clients

to the organization. Specifically, the corporation shall utilize its corporate website as one of the

tools that would market its products. The site shall have a section bearing information

concerning the organization. Form this menu on the firm, visitors will have an access to the

history of the organization, the transformations it has undertaken along the way and projections

of growth that it aspires. The section shall also contain the vision and mission statements of the

organization, including its corporate social responsibility statement and strategy. The second

menu on the login screen of the corporate website of the institution shall be the different

departments grouped according to the line of business that the clients might want to purchase

such as grocery, furniture, food, and the rest. Under each menu on the line of products’ list, a

visitor would find from the drop-down lists varieties of products and brands that the business

avails for sale. The drop-down lists would be useful for the organization in communicating to

clients the variety of products and services that the organization offers to them.

Since the organization delivers its services with the interests of the clients at heart, there

shall be a special section for visitors to login to the site. Login to the site is special for customers

and the organization alike since it provides them a chance to place their orders and make their

payments. The login area of the website shall be adjacent to the contact information of the

E-commerce Business in Saudi Arabia 6

organization that shall allow interest clients to make inquiries of their choice. The website’s

contact information area shall include a toll-free number that clients in Saudi Arabia can reach

the customer support team, an e-mail address, and social media pages for clients who would like

to find more about the products and services offered for sale.

There shall also be a place on the website that will allow clients to search for what they

would like to purchase from the business in the event that they do not understand the categories

into which such products fall. Since the website shall be in Arabic, it shall have a place that

allows non-Arabic visitors to translate the language into more than fifteen languages, including

English, French, Chinese, Japanese, and other popular languages. The website shall also be as

informative as possible to help clients find value for their money through running interactive

pages that indicate the best offers concerning promotions, discounts, new arrivals, the stores near

clients, and any other information that would be relevant for the improvement of customer

experience while shopping with SaudiMart™. Figure 2 indicates the website layout of

SaudiMat™.

E-commerce Business in Saudi Arabia 7

Figure 2: the website layout of SaudiMat™. This section shows a section of the website dealing with footwear that

the company shall sell under the Love the Shoes You Wear brand name.

System Design

E-commerce Business in Saudi Arabia 8

Figure 3 shows the architecture of the website that the organization shall use to provide

its products for sale to clients. According to the figure, the company shall require to

communicate with its clients through the internet even while it shall have the traditional brick

and mortar stores in Riyadh and the rest of the major cities around Saudi Arabia. For this reason,

the business-to-customer network architecture shall be the merchant model. The role of the

website in this case shall be to supplement marketing and selling strategies of the organization,

especially to reach persons who cannot access the physical stores (Laudon & Traver, 2013).

The basis architecture, as figure 3 shows, shall include software and hardware

components. The hardware components of the organization shall be located within the physical

premises of the organization and shall be installed with software for communicating with cloud-

based resources that shall be hosted by Microsoft

off the organization’s premises. Customers

will be able to communicate with the organization through the cloud, which would ensure that

the website runs at all times and that the clients can access information at their convenience

using any of their preferred devices. This idea implies that the organization shall use the

Software-as-Service model of cloud computing.

Figure 3: the network architecture of the organization

E-commerce Business in Saudi Arabia 9

The advantage of using this type of cloud computing architecture is the fact that it does

not charge clients for the installation and maintenance costs of the software. Since the software

resources on the cloud are shared between the organization and all its customers the world over,

the organization is likely to realize cost-effectiveness in operating its corporate website (Laudon

& Traver, 2013). The company will have another advantage of communicating directly with its

clients, which is a further advantage in the developing of a competitive advantage.

The Needed Software and Hardware for the Corporate Website

Table 1 indicates the types of hardware and software required to run the website and the

rationale given. The organization has an option of obtaining the different network components

from the numerous vendors in the market.

Component

Rationale

Software

Web Servers and

backup servers

 The servers would be useful for web hosting, which is useful in

ensuring that the corporate website is accessible and live to all

users at all times

 The web servers also allow the organization to deliver the

business-to-customer services as described previously

 The servers are also a part of the communication system of the

organization since it allows the organization to run services such

as e-mail and others (Content Writer, 2013).

E-commerce Business in Saudi Arabia 10

 The backup servers would be critical in ensuring that the website

remains live during downtimes through the provision of

alternative hosting options

CRM Software

This component is required in running the corporate website.

Specifically, the CRM software would be useful for the following

functions:

a) Artificial intelligence, which is useful in ensuring that illegitimate

logins are noted and dealt with accordingly

b) Sales automation, which is useful in allowing the clients to make

payments for their products without requiring significant input

from customer support officials

c) Allowing multichannel services such as telephony, live chats with

clients, and e-mail among others

d) Customization of the website so that it captures the interests of the

target market

Firewall

For the provision of security to the system, which is essential in

safeguarding critical information of the organization such as clients’

personal information as well as corporate data against attacks

Hardware

Computers

The computers would provide the means through organization staff will

access the cloud resources and enable the client support unit to

communicate with the customers concerning their queries and orders.

E-commerce Business in Saudi Arabia 11

Printers

They would be useful for the generation of material required by clients,

which might include catalogues and other material that would then be

sent through e-mail or by post

Table 1: Hardware and Software requirements for the corporate website

Security Issues and How the Company Should Avoid Them

Operating an online business demands significant considerations for security issues

related to the nature of such activities. For instance, the organization should beware of internal

and external security breaches that would affect the smoothness of its operations. Internally,

some employees of the organization might handle information inappropriately, such as leaking

high-profile information to competitors or using personal information of clients irresponsibly

(Turban et al., 2002). For this reason, it would be critical for the organization to first develop an

IT usage policy that would define what activities the workers should and those they should not

do in the dealing with IT resources. In ensuring that the authorized individuals only handle

critical information, the organization shall institute security measures such securing the hardware

devices using passwords and other security features that would guard against irresponsible use of

data.

The firm also faces possible security breaches from the external environment, which

might be perpetrated by hackers. These people might attack the cloud through which the

organization communicates with its clients. The channel provides an easy way of attacking the

network hardware on the corporate premises. Hackers might target critical information related to

customers and the company. Therefore, it would be useful to secure the network with appropriate

firewalls that would detect and prevent the possibilities of unwanted intrusions into the system.

Marketing and Advertising Strategy for the Organization

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The company shall target consumers from all the demographic groups within Saudi

Arabia and the rest of the world. The reason for this idea is the fact that the organization stocks

products from a wide base of consumer bases irrespective of age, economic, gender, and

economic status. Because of the effect of technologies and their relative preference among

individuals from different demographic groups, the organization shall adopt different marketing

strategies for different groups. For instance, online marketing strategies, such as social media,

shall be adopted to target the younger generation of clients who have been found to have higher

levels of preference for such technologies (Lenhart et al., 2010). Contrarily, the traditional

promotion methods, including print and visual advertising through newspaper and television

shall be adopted to capture the older clients. The organization shall also use targeted marketing

approaches in which it shall send special printed regalia to groups of customers in whom it has

special interests, such as the aged, those with specific medical conditions, and others.

Ethical and Legal Considerations

The company shall operate within the legal frameworks of the Kingdom of Saudi Arabia

concerning commerce. These laws also carry an ethical obligation for the organization to the

socially responsible to the community that it serves through avoiding false advertising and

misleading information concerning products. The website should also hinder the accessibility of

personal information belonging to other clients while using the website.

Conclusion

SaudiMat™, an online retailer specializing in a wide range of retail products, including

electronics, apparel, footwear, furniture, sporting equipment, groceries, food, and cosmetic

products shall be headquartered in Riyadh, Saudi Arabia. The organization shall operate a

business-to-customer network architecture that will allow it to interact directly with its customers

E-commerce Business in Saudi Arabia 13

using the Software-as-Service model that would reduce the costs of operating the website while

ensuring stability in service delivery. The organization shall install appropriate security software

to protect the hardware and software resources provisioned over the cloud to avoid possible

security breaches. It is expected that using this approach, the organization would enter the market

aggressively and build its brand reputation even in the wake of stiff competition from established

organizations. However, the institution shall consider the legal and ethical issues that tie it to

responsible advertising and use of critical data.

E-commerce Business in Saudi Arabia 14

References

Content Writer (2013). Technologies required for E-commerce. Retrieved 2 April 2018, from

http://www.contentedwriter.com/describe-the-technologies-required-for-e-commerce/

Laudon, K. C., & Traver, C. G. (2013). E-commerce. Pearson. New York: NY

Lenhart, A., Purcell, K., Smith, A., & Zickuhr, K. (2010). Social Media & Mobile Internet Use

among Teens and Young Adults. Millennials. Pew internet & American life project.

Moatti, V., Ren, C. R., Anand, J., & Dussauge, P. (2015). Disentangling the performance effects

of efficiency and bargaining power in horizontal growth strategies: An empirical

investigation in the global retail industry. Strategic Management Journal, 36(5), 745-757.

Morris, M., Schindehutte, M., & Allen, J. (2005). The entrepreneur's business model: toward a

unified perspective. Journal of Business Research, 58(6), 726-735.

Turban, E., King, D., Lee, J., & Viehland, D. (2002). Electronic commerce: A managerial

perspective 2002. Prentice Hall: ISBN 0, 13(975285), 4.

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