Introduction
The Internet is becoming a very important tool in the world of business because it presents a method of transacting not only in a very short time, but also a way of saving costs among other advantages. The Internet is becoming a major focus of advertising, research, promotion, selling and payment, and socializing tool, both by small and major firms. According to Wyckoff & Colecchia, worldwide adoption of the internet as a strategy by small and big firms has been as a result of reduction of the associated costs (1999). It has been reported that usage of the internet has been increasing in the recent past. Therefore, for companies to have a global focus and capture the market, they need to move fast and seize the opportunity in the market place so as to remain competitive.
The hotel, catering and hospitality industry is no exception to the usage of internet strategies. The industry is well-placed at gaining the advantages because it benefits directly from exploitation of the tourism industry. Companies are also reported to have joined the Global Distribution System to improve their market coverage and gain other associated benefits such as low costs of operations.
Description of the business
D&D London restaurant group owns and operates 30 restaurants both locally and internationally. The entity, formerly known as Conran Restaurants, was renamed after the acquisition of a 49% stake from Conran Holdings in late 2006. Business outlets include individual restaurants mostly in London, but outposts exist in Europe, Japan and the United States. The group also has 25% stake in the Individual Restaurant Company. The latter has four brands-Zinc Bar and Grill, Bank, Restaurant Bar and Grill, and Piccolinos under which it operates more than 20 restaurants in the United Kingdom. Zinc Bar and Grill was acquired from Conran in 2005. the companies restaurants in London includes Skylon, Sartoria, Plateau, Orrery, Launceston Place, Floridita, Blueprint Café, Bluebird, The Avenue and Almeida, while overseas restaurants include Noodle Worship and Iconic and Botanica all in Japan, Guastavino’s in New York, Custom House in Denmark and Alcazar in Paris.
The group has partnered with other companies or entity. These are Havana Holdings, Centerplan which is a Danish company, and Hiramatsu which is a Japanese restaurant group. The hotel industry is well placed to tap internet resources by turning to the whole world market, in addition to enhancing the local market. Hotel booking and holiday planning through the internet has been exploited by many large entities to capture the global market.
Through the use of the Global Distribution System, it is possible to have international customers coming to utilize the resources where they have already been built in contrast to establishing outlets in all countries around the world. Currently, it is possible to book a resort over the internet through the company website. Thus the company has set out the basics for the internet as a booking facility. This paper will discuss a strategy to help the company compete effectively with similar companies in the industry, through the internet.
The paper will discuss a strategy aimed at promoting the sales of the company through internet booking through offering a promotion to those who book for the holidays in any of the group’s resources, whether locally or internationally. Promotion of the internet business will make the company realize a number of advantages over the physical-contact methods between the seller or agent and the buyer. Using an agent may be more expensive than using the internet because the company might pay the agent more than he would incur from internet operations. In addition, direct networking with the customer reduces other problems such as inconsistency and untrustworthiness of the agent or dealer, inconveniences and time wastage.
Making sure that the customer is glued to the company’s website may also come along with other advantages such as becoming a channel for advertising new offers and establishment. The company through a promotion would make sure that the customers are continually using the booking facility to gain the advantages stipulated in the offer. The internet business promotion strategy will involve the following;
- 5% reduction of prices for holiday bookings made through the internet as compared to those made through agents
- Establishment of a competition where every booking made through the internet by one person makes an entry into a draw where one may win an extra paid holiday in the company’s resources at his or her own time and place of choice
- Several holiday bookings (say above 5) through the internet for a whole year will constitute a refund of 25%
Exploitation of the internet can also result in improved relations between the company and its customers through quick and easy communication. For example, in some websites, customers located anywhere in the globe can chart and consult the customer care departments of the companies. In such a promotion, the customers would be guided through their choices and their questions relating to promotion issue can be answered directly rather than using an agent.
Internet adoption and guiding principles
Adoption of the internet strategy either for marketing, advertising, researching, promotion and socializing comes with the usage of technology. Usage of the internet as a company strategy need to be studied carefully to reduce the costs that comes with adoption of the innovation technology and to maximize on the benefits presented. The internet business has been explored in the e-commerce literature.
E-commerce entails the activities aforementioned, i.e. marketing, promotion, researching e.t.c. As a strategy mostly used for companies to market and sell products through the internet, it has been indicated to occur in four major stages in the B2B e-commerce. The initial stages involved usage of simple technological solutions to simple problem. In the internet strategy, it would involve usage of computers that are networked within a department to provide sharing of files and accomplish automation of simple processes.
The company then through learning advancement achieves confidence to work on adopting more technology. The second stage may be motivated by the need to link to large customers and acquire more technological adoption after successful first stage. This stage, which may also involve usage of technological adoption throughout the whole firm which may also be centralized to ensure departmental collaborations to carry out e-commerce projects (Centralized e-commerce), is followed by the third stage (looking inward for benefits) where the need for control and management of the adopted technology becomes important for such purposes like maximization of the advantages and minimization of costs. This may happen through consideration of other technology that is better than the adopted. Organizations may then become global by focusing on the wider market (global e-commerce) to establish linkages between it and other organizations.
A medium-sized company which plans to establish internet strategies must consider the current level of technology at which it is operating. This is because it is increasingly hard today to have a medium sized company that is not using technology at all in the modern world. Such a consideration would be advantageous because it would help the company to determine what technology it can match with the internet strategy without actually replacing the current system, which can be expensive. In addition, major replacement would come with restructuring of the work force and the management too, which may take time and present further costs for example as it seeks to source for more expertise. This would be more difficult than when replacing bits or when updating or linking the present technology with another. Careful analysis is important too because linkages may introduce some delays and faults if technology being linked is slower old school machinery.
Changing an organizational culture may be implicated by the fact that some workers or the management may be difficult resist change of technology. Workers or some employees may perceive adoption of technology as threat to not only their job security but also the incentives or any of these. The employees, for example the hotel agents in our case, who have already adjusted to working or are adjusting may think that their skill will be obsolete and they may have to undergo learning of new skills, and that they may think promotion opportunities are gone. This may be understood because change in technology will mean restructuring of the work force and job reassignments, for example, which may break social relationship. Education on advantages of adoption of internet technological strategy may therefore be necessary.
This brings to us a very important aspect of general technological adoption in a firm, that expertise is necessary. In general focus, adoption of technology which includes internet usage may be more expensive in the initial stages than the final stages. In fact, literature holds that companies willing to invest in the initial faces may involve surmountable exposure to risk than those investing in the more mature stages. However, the first or earlier adopters would reap the benefits of having a competitive advantage over the late adopters because they may even prevent market entry through protecting of intellectual rights and may require that the company pays for usage of these rights, or that the investors in this type of technology may be fewer than those investors at a latter stage.
In this case, companies are at a fast growing stage of adoption of internet technology which is also competitive. That brings to us the very reason or need of an internet strategy; a special skill would be necessary for effective market entry because of competition. A reduced risk to adoption of the basic internet technology would be experienced because the internet avenue has been explored and success stories reported, but a new strategy may involve invention. In this case we explore the internet business promotion strategy that builds on the major technology already being utilized, but manipulated, and whose adoption would give the company special results.
Internet security is of paramount importance in such operations like running a promotion program because customers will be required to avail personal data. The personal data will be used in identifying and verifying the customer identity, entries and communicating with them. Handling of this data may require specialized technology that needs to be updated from time to time to ensure data breach does not harm the information provided or that hackers do not use it for their own advantages. The technology that would be applied in this case is explored in the preceding section.
A promotion program would be expected to reach maximum advantage after many people are informed about it and are actually utilizing the opportunity. At the first stages of adoption of this strategy, it would be expected that not so many people will have become aware of the opportunity and so a few are using it. Other means of publicizing the program may become important. These include holding shows across major towns where the company operates hotels, targeting the media-even the internet by using other websites to advertise the offer. Again, in order to be more effective, it is important that the promotion be based on some important information such as the customer preferences and market trends. An analysis of the market may therefore be necessary before deciding fully on this strategy. In addition, continued monitoring and analysis of the program is necessary to determine the benefits and weigh them against the costs since viability of this project is of paramount importance. Changes may also be required depending on the progress.
Technology that would be employed
Customers using the technology will require that their transactions be made quicker, cheaper, interactive, flexible, and familiar. Increased awareness of consumer products that offer better quality processes and products may make the customer to migrate. Therefore, the company will need to invest in technology that combines a wide range of characteristics that will attract the customer and at the same time meet the requirements and standards. These include internet technology that is easier to use, quality of information and technical performance, the effectiveness of making and searching online purchases, and enjoyment of the system (Dijk, Minocha, & Laing, 2006). Special technology would be necessary in addition to the networking technology so as to ensure safety of data that is provided, and compile the information provided for various booking for individual customers. A special system that monitors and computes the figures for the number of bookings by individual customers, and the subsidies made for any entry. In addition, the choice for a holiday venue after winning, and the monitoring of the competition may require special technology.
Data handling, analysis and monitoring may be made automatic to ease computation and related processes. In addition, a proper database would be needed.
Security concerns have become a focus even by customers, some who are now concerned on exchange of data through the internet. Among the 300 people interviewed in a multinational privacy study carried out by IBM for its customers in Germany, USA and Great Britain, 63% would hesitate to provide private data on internet connections whose security is assured, which may point out that a good number of customers are aware of need for internet security (Johnson, 2001). Therefore, security of data handling system may have a negative impact on this promotion if not carefully checked. In fact, even the possibility of arising of people purporting to be involved in such a promotion, and who may lure customers to reveal their identity by sending them emails, should not be underestimated since the result may be distrust and loss of company reputation in case the company fails to avoid it or stop it if at all it occurs. D&D should therefore invest in secure technology and continue to upgrade it. A company that does not understand or aware of the protocols related to the security of customer data or information may themselves induce data breaches. A company must put in place technology that enables it to fight organized crime in the modern world. Internal resources and people within the organizations are themselves at a position of leaking the customer information, for example if they access to the machinery during upgrading and repair for example. Proper technology and the related regulation can be used to eliminate internal and external data breaches. Internal fraud is where the workers and employees of the firm, who have access to customer data and information and may leak it or carry it away for their own use. Deloitte showed through their Global Security Survey in 2006 that of the 49% of the surveyed companies who experienced data breach, 28% was internal fraud. Data loss contributed to 18% of the breach. Therefore, the adopted technology must prevent the customer data from unauthorized access or usage. The company can keep this at control by knowing who has access to what kind of data and for what purposes. In addition to strict guidelines on data access and regulations and penalties, the technology itself need be able to eliminate the problem. For example, the company can adopt Data Loss Protection technology that protects data in motion from being lost either through spyware or spamming programs from a violator. Such programs like Ironport prevent loss of data in motion by using antivirus, anti-spyware and anti-spam tools to deliver unparalleled data in motion. Data in motion can be harmed in insecure internet connections by viruses and suspicious programs (Hunter, 2007). Protection of private data is achieved elsewhere through usage of technology that achieves the standards of the PCI-Payment Card Industry and regulations such as HIPAA-Health Insurance Portability and Accountability Act. Technology that ensures that data is encrypted can be used to prevent sniffing attacks which involves capturing of the TCP/IP transmissions by the malicious user so as to gain access to personal information such as passwords and user names. Access of personal data is still possible even after encryption because a malicious person may use brutal-force technique to gain access to “credential information” (say username and password) stored in a data base. The attacker through this skill would succeed and copy the system files or data base system with the credential information, through a number of or numerous trials to achieve a match between the credential information. (Sawma & Probert, n.d.). In this case, a possible combination of the credential information is encrypted by using the algorithm by which actual or true credential information was encrypted. RSA cryptosystem with 1024 bit keys, which uses a strong cryptography, may be used to protect the personal data. In addition, the company can set the maximum number of entries to password and usernames to avoid automated means of access to the system by use of possible combination of credential information with huge database. The possibility of success to such skills is high because people tend to use passwords that are easy to remember.
References and bibliography
D&D Information. 2009. Web.
Dijk Geke, Minocha Shailey, & Laing Angus. Multi-channel consumer behavior: Online and Offline travel preparations. 2006. Montreal, Canada. Web.
Hunter Bradley. (2007). Data Loss Prevention: Best Practices. Web.
Hodkinson, C. and G. Kiel, Understanding Web Information Search Behavior: An Exploratory Model. Journal of End User Computing. 2003. 15(4): p. 27-48
Saeed, K.A., Y. Hwang, and M.Y. Yi, Toward an Integrative Framework for Online Consumer Behavior Research: A Meta-Analysis Approach. Journal of End User Computing, 2003. 15(4): p. 1-26
Wyckoff Andrew & Alessandra Colecchia. The Economic and Social Impact of Electronic Commerce: Preliminary Findings and Research Agenda. 1999. Paris; OECD Publications.