Developing successful online businesses is important
for entrepreneurs, investors, and industry stakeholders. A multitude online businesses
fail to reach a sustainable level for comfort-zone and growth-oriented
companies. Research by Ashworth, et. al. (2013) helps in understanding how a
six-stage approach describes the development of e-retailers and differentiates
those that are successful from those that are not.
It should first be understood the differences
between comfort-owned businesses and growth-oriented business. Comfort businesses are developed around the
needs of the owner while growth-oriented businesses seek to maximize revenue.
The two are fundamentally different businesses based upon the personalities and
goals of the founders.
A comfort-business may never reach full maturity as it
is focused as a lifestyle or personal income generating of the owner. We may find
an example in a boutique clothing store started by a person who enjoys fashion,
a small garage that focuses on car customization, or a fish & tackle shop
oriented around the owner’s love for fishing. The owner and his or her
lifestyle take precedence in business decisions and an intensive business was never the goal.
A growth-oriented business is designed to reach
maximum growth potential through adding product lines, improving business
services, and seeking additional opportunities for revenue. Some of these businesses are run by serial-entrepreneurs
that continuously add businesses and products to reach financial milestones.
The strategy and design of the business are expansion driving.
Stages are used to describe how typical e-retailers
develop and reach a sustainable level. Online businesses should not try and
race ahead of their natural development to ensure they are fulfilling proper
platform building that creates stability. Likewise, they should not become stagnant
in their development or be confined to comfort-business models that are subject
to the lifetime of the owner.
The stages of development for e-retailing businesses
are:
Stage
1-E-retail
Launch: The launch of the business, inclusion of high demand lines, and
organizational learning to meet immediate needs.
Stage
2-Competence
and Development: The website is improved, functionality and control are matched
and search engines begin to crawl the site.
Stage
3-Market
Development and Value Integration: Customer feedback, creative adjustments,
customization, improved product reach, and market development.
Stage
4-Integration
Intensification: Intensified strategic
planning that enhances internal operations and external relationships.
Stage
5-Experience
Leveraging: Using gained experience to create add-ons, improve customer
service, and fine tune the business.
Stage
6-Sustainability:
The maintenance of multiple revenue streams, regular business adjustments, and
maximum sustainable performance.
Ashworth, C. (2012). Marketing and organizational
development in e-SMEs: understanding survival and sustainability in
growth-oriented and comfort-zone pure-play enterprises in the fashion retail
industry. International Entrepreneurship
and Management Journal, 8 (2).
