University of Southern Queensland
I submit this paper on the Toy Rus Company e-commerce business. This paper has covered on cloud computing, e-commerce business, e-commerce security, and e-commerce retailing.
I has given an in-depth analysis of the factors affecting Toy Rus business and how it can effectively implement various policies in order to succeed in e-commerce. Finally, it has made recommendations on policies that would ensure that it succeeds in its online retail business.
Table of Contents
Letter of Transmittal 2
C.1 Secure Sockets Layer (SSL) and Transport Layer Security (TLS) Protocols. 13
C.2 Virtual Private Network. 13
C.3 Protecting Networks. 14
Proxy Servers. 15
C.4 Intrusion Detection and Prevention Systems. 15
C.5 Protecting Servers and Clients. 15
Operating System Security Enhancement 15
Anti-Virus Software. 16
D.0 Online Business With an Offline Sales Channel 16
D.1 Data Management 16
D.2 Inventory Visibility and Availability. 17
D.3 Point of Sale and Payment Protection. 17
D.4 Technology and Innovations. 18
D.5 Sustaining Labor Efficiency. 18
E-commerce is currently the trend for most businesses. Simply, e-commerce refers to the act of conducting business electronically through the internet. Generally, this includes retail activities such as buying and selling, making of payments, placing an order, and marketing. This paper discusses the e-commerce business of Toy Rus business. To ensure there is a full analysis of the company’s e-commerce, the paper analyzes four different sections that discuss on e-commerce in relation to Toy Rus Company. In particular, the paper talks about cloud computing, e-commerce presence, e-commerce security, and e-commerce retailing. It also has a conclusion and a recommendation section that talks about various issues that Toy Rus Company must implement in order to be successful in its retail business.
E-commerce is an essential part of any modern business. It can simply be described as the act of carrying out all the retail and managerial activities of a business through the internet. In order to be competitive in the toy industry, Toy Rus Company has an e-commerce section that plays a pivotal role in the success of the company. Despite the many advantages presented by e-commerce, such as access to a lot of customers, this kind of selling has various challenges that affect all organizations that have incorporated this method of business. In particular, the issue of security, cost, and the attraction of customers are main challenges that most e-commerce businesses face. This paper provides a clear analysis of the aforementioned in relation to Toy Rus Company by discussing on cloud computing, e-commerce presence, e-commerce security, and e-commerce retailing.
Cloud computing is a simply a model in which individuals access computing services that are provided as a shared pool of virtualized resources over the internet on a pay-per-use basis. Generally, these computing services include computer processing, storage, and access to various software. The clouding computing is divided into three basic types; Infrastructure-as-a-Service (IaaS), Software-as-a-Service (SaaS), and Platform-as-a-Service (PaaS). In addition, a cloud can be either private, public, or hybrid.
The IaaS works by cloud service providers who have excess computing resources providing their customers with various computing services such as storage, networking, and access to various applications. A major provider of IaaS is Amazon. In SaaS, individuals use software that is hosted by a vendor in his/her own clouding infrastructure. Customers access this network through the internet after paying an annual, monthly, or purchase fee depending on the contract. Noteworthy, the data and software are kept in the SaaS vendor’s servers (Laudon & Traver, 2016). Some of the popular IaaS vendors are Google Apps and Saleforce.com. In PaaS, individuals use the computing and programming services provided by cloud computing service providers to make their own applications. An example of this system is the Bluemix service that is provided by IBM to its customers to enable them to develop and test their own applications.
A public cloud simply refers to clouding services that are made accessible to multiple customers who pay for the resources that they use. Ordinarily, public clouds are owned and maintained by the cloud service providers. Due to their access to multiple customers, a public cloud offers just enough security for ordinary business. Therefore, businesses that are in the financial or health industry, which require high levels of security do not use this type of cloud. A public cloud is also cheap to operate and use since individuals who use this cloud do not usually need to invest in computer hardware and software. A public cloud is called on-demand computing since this services are billed on a monthly or annual basis depending on the contract and customers can access these services seamlessly depending on their needs (Turban & King, 2011).
A private cloud is operated purely for the benefit of a single customer and it is mostly managed by third parties or the organization. Generally, a private cloud is operated in business that requires high levels of security or those that have stringent regulatory requirements on privacy such as health care and financial companies (Laudon & Traver, 2016). In terms of operations, a private cloud is operated by either an organization or third parties and it is hosted internally or externally.
In practice, a hybrid cloud system is simply a combination of a private cloud with a public cloud. In light of this, companies use their own private infrastructure and network for essential computing activities and adopt public clouding computing for less critical activities. On overall, the use of cloud computing will enable businesses to have a more flexible computing environment. In this regard, companies will have a flexible computing infrastructure and resources where they will be able to own some of it and rent some extra spare capacity from computer service providers.
As for Toy Rus limited, the most effective cloud model to adopt is a hybrid cloud system where it will use IaaS. In light of this, the company will have some level of privacy and security on essential information and data while still having the opportunity to freely share some none essential bulk data in public cloud system. In particular, the private infrastructure and network in the hybrid system will be used in the transmission and storage of critical information such as payments details, inventories level in the company, and private information such as customer’s identity (Adrian, 2014). The public cloud computing in the hybrid system will transmit and store non-critical information and services such as social media communication and information on public relation services that is already available to the public.
Cloud computing has the advantage of reducing the cost of building and operating websites by enabling businesses such as Toy Rus to hire various computing resources at a cheaper cost. Mostly, cloud service providers enable their users to access various software at a fraction of their purchase price. In addition, cloud computing enables the business to have reliable and easily scalable computing services (Jacobs & Chase, 2013). Businesses are able to increase the capacity of resources that they use by increasing the fees that they pay to the clouding service providers. To enable this goal, clouding service providers adopt various engagement strategies such as “pay-as-you-go” and “pay-as-you-grow” when billing website developers. Finally, a private cloud provides a fairly secure platform that can be used by companies to store data without the fear of a breach of security (Kerin & Hartley 2016).
One of the main drawbacks of cloud computing is the breach of security. Since data is stored by third party providers in clouding, the risk of security breach is significantly high. In addition, there is always the risk of lack of reliability in the system. Ordinarily, customers expect that these systems will work seamlessly and never malfunction. However, all systems malfunction once in a while (Strauss & Frost, 2013).
Due to the aforementioned risks in cloud computing, Toy Rus must ensure that it has a reliable external backup system of its sensitive data. Moreover, it must also establish is a system to have a significant level of autonomy such that they can work effectively even when the clouding services fail (Kim, 2009). This setup, which is composed of autonomy and access to essential data and information will guarantee the company can seamlessly continue with its operations even when services offered by the clouding service provider malfunction.
Forming an e-commerce business is challenging mostly due to the competitive nature of this market. In addition, it is always difficult to ensure that customers are consistently attracted to the company’s website and are confident to shop. In particular, the issue of creating trust among customers on the reliability and in the provision of honest and genuine services is always a significant challenge in this industry. In this regards, when establishing Toy Rus business, I focused on three critical issues: the target audience, the size and characteristic of the market, and the nature and characteristics of competitors in the market.
Toy Rus business aims at selling various types if toys and game equipment to kids who are from age zero to fourteen. Accordingly, the target audience for this company are the parents and guardians of the children. It is important to note that in the early development of children parents have a significant say on the type of toys that they should purchase. As the kids get older, they have a significant influence on the toys that are purchased because they are able to express their opinions (Ghencea & Gieger, 2010). Therefore, the company will aim at satisfying the needs of these two groups; the kids and the parents. More specifically, the target audience will be mostly middle-income earners. Generally, Australia, Europe, the USA, and Asia has a high population of middle-income earners families. In addition, this group has a lot of disposable income which they can use in the purchase of toys for their children
Middle-income earners are also own of their consumerism culture. Accordingly, they are an important market in enabling the business to have repeat clients. In addition, most of them have adequate exposure to education, with most of them possessing college diplomas, degrees, and post-graduate certificate. In light of this, these individuals will appreciate the company’s innovations such as toys that are safe for use by children and those that spur a child’s creativity and imagination. Due to their exposure to education, most of them are easily employed, which ensures that they can consistently purchase new toys for their kids. Finally, these individuals are always sensitive on the importance of proper health for their kids (Bodie, Kane, & Marcus, 2012). As a result, they are always willing to purchase a wide array of sporting equipment and toys that are used in active physical games.
The toys market is a robust and lucrative market. To begin with, the cost of making toys is normally cheap. Moreover, the setup cost is always cheap due to the presence and availability of fairly affordable toys the business can use to start the business. Due to the high breakage rate on toys that are normally used by children, these toys end up being consumable goods. As a result, the business is always assured of consistency in its sales. Interestingly, as the child grows bigger he/she simply demands bigger and more sophisticated toys. In effect, the business continues to make sales to the child though ought his/her childhood life.
There is always a lot of competition from new entrants into this market. To elaborate, since this market operates in a free market economy, there are no barriers to entry and exit in this market, any individual can establish his/her online toy business (Heizer, Render, & Munson, 2016). In addition, the setup cost is significantly low since a seller must not always have all the commodities in the store. Using efficient inventory management systems, they can set up systems such as just-in-time inventory management system, which can enable them to purchase supplies immediately the customer confirms their willingness to purchase a product (Ghencea & Gieger, 2010).
Finally, the toy market is wide and robust enough to enable a business to succeed. To begin with, a company can specialize on the provision of toys based on the age of the child. In addition, the company can also decide to sell toys based on their health and creative benefitting. In this case, the business would specialize in the sale of sports equipment such as bicycles, skipping ropes, interactive games, chess, scrabble, and various puzzle games. Finally, it can also specialize in the sale of toys that incorporate modern technologies such as Bluetooth, Wi-Fi, and various robotics and information technologies aspects. In fact, modern parents have become highly interested in sophisticated toys that enable kids to learn about information technology from a very small age (Schinederjans, Cao, & Triche, 2013).
Although the online toy business does not have any barriers to entry, there only a few major toy sellers in the world. Some of the notable companies are BigBadToyStore .com, Toys & Hobbies, and Amazon.com. In Australia, the most prominent ones are Toyuniverse.com.au and Onlinetoys Australia. In order to analyze the characteristics of the current competitors, this paper will conduct a SWOT analysis of the Amazon.com, which is one of the main market players.
Amazon.com is popular in the sale of various home accessories from its online website. As a result, most customers do not look at the products offered by various alternative websites, which enables it to retain most of its customers. In addition, Amazon has an elaborate supply chain system that enables people to ship products to almost all the parts of the world. In Australia, Amazon delivers its products to all the towns in the country. Finally, Amazon.com also provides complementary services such as cloud computing which complements its online business.
Amazon.com has a wide portfolio of services that limit its ability to specialize in the toy business. For example, the company spends a considerable amount of time and effort in its other business such as the sale of books, cloud computing, and logistics (Miller-Nobles, Mattison, & Matsumura, 2015). The sale of toys is not uniquely positioned in the Amazon’s website due to the wide portfolio of services that it offers.
There is an increase in the middle-class segment in the world. Accordingly, the demand for toys for children born in these families will increase. Moreover, there has been a significant reduction in the cost of producing toys due to improvement in technology. There has also been an increase in awareness among customers on the need of toys, sporting equipment, and interactive gaming equipment in the promotion of good health (Mallor, Barnes, Bowers, & Langvardt, 2012).
The online toy business has no barriers to entry. As a result, Amazon.com s exposed by new businesses that have established their own online stores. Due to the wide array of services Amazon offers, it is difficult for it to customize its toys to meet the unique needs of its customers. On the contrary, specialist online websites are able to customize their products, which enables them to provide services that meet the unique needs of their customers (Ross, Westerfield, & Jordan 2016).
The provision of a secure platform for the payment, storage, and verification of business and customer information and data is essential for the success of Toy Rus Company. In particular, a secure system will protect Toy Rus from cyber vandalism which can result in identity theft, theft of payment details, phishing, and data breach. To ensure the system is will protected, Toy Rus will ensure that its communication channels are secure.
Toy Rus will achieve this goal by using Secure Sockets Layer (SSL) and Transport Layer Security (TLS) protocols. Generally, the company will use secure negotiated sessions that will encrypt contents of the forms, the URL of the exchanged documents, and cookies that are exchanged. This system will be essential since it will encrypt credit card numbers used by customers and prevent fraud. In practice, the SSL and TLS protocols enable a series of communications between the server and browser to occur, which enable them to exchange digital certificates that are later used in the formation of shared encryption (Laudon & Laudon, 2016). The shared encryption are later communicated in an agreed session key.
Toy Rus will also use a virtual private network (VPN) to ensure there is a safe channel of communication between the company and its customers, suppliers, and employees. Generally, a VPN works by providing an authenticating and encrypting information that is communicated between unauthorized individuals and the company. The authentication process is important in preventing spoofing and use of falsified identity. In the VPN set up, a customer will connect to a remote private using his/her local internal service provider (ISP). Through tunneling, VPN protocols will then establish a link between the customer and Toy Rus network, which will have a similar behavior like a direct dial from the client to the company’s website (Bateman & Snell, 2016). In the tunneling process, an invisible and encrypted wrapper is normally placed around the information being transferred in order to conceal it from fraudsters. This method will ensure there is a safe transfer of information from Toy Rus network and the ISP.
Toy Rus network will be protected using firewalls and proxy servers in order to ensure there is safe communication of information with customers.
Firewalls protect a network by filtering the communication packets and preventing unauthorized packets from entering an existing network. In addition, every message that is sent or received will be processed by the firewall, which will play an important role in ensuring the message meets Toy Rus Company security guidelines. Generally, the firewalls will filter the messages based on their attributions such as domain name of the source, IP address type, type of service, and destination port. To validate traffic, Toy Rus firewalls will examine the packet filters and the application gateways. The packet filters will examine data packets to establish if they are from a prohibited address or port (Adrian, 2014). However, this is prone to spoofing since it lacks packet filtering methods. Application gateways filter communications depending on the application being requested. Since they provide a central filtering point, they provide great security for the system.
Basically, proxy servers are dedicated computers that handle all the communications that are sent or originate from the internet on behalf of local clients. Simply, they limit the level of interaction between the client and external internet servers. By using proxy servers, Toy Bus will ensure that any request for a web page by a user of an internal network is routed first to the proxy server (Laudon & Traver, 2016). After validation of the user and the request, the server sends the request to the internet. Similarly, if a web pages sent to Toy Rus internal server from an external server, it will first pass through the proxy server for validation. If it is approved, it is then allowed to pass into the internal network Web server until it reaches Toy Rus desktops.
Toy Rus will also use intrusion detection and prevention systems which will be used to identify if it matches certain preconfigured rules that indicate the presence of an attack. If this system detects an intrusion, it alerts the system administrator and logs of the event in the database. An intrusion prevention system (IPS) will detect and blocks suspicious activities in addition to raising an alerting the administrator and logging off the event. Specifically, an IPS will be able to terminate a session, reset connections, reconfigure firewalls and router security controls, and also block traffic from suspicious IP addresses.
To protect servers and clients, an anti-virus software and upgrading the operating systems security features will provide a direct protection for Toy Rus computers from cyber-attacks.
Toy Rus IT department will consistently install computer security upgrades that will be provided for the company’s operating systems. Ordinarily, Microsoft, Linux/Unix, and Apple operating systems provide automatic upgrades for their operating systems. These upgrades are effective in the prevention of attacks from common viruses and worms (Laudon & Traver, 2016). Moreover, the company will always ensure that it has the latest operating system so that it can ensure it consistently enjoys the automatic upgrades which are mostly done on modern operating systems.
The use of an anti-virus is an effective and affordable means that the company will use in the prevention of attacks from common viruses. In addition, anti-viruses are effective in detecting and identifying already present viruses (Laudon & Laudon, 2016). The use of these antiviruses will enable Toy Rus to eliminate viruses that may be lurking in its computers. Moreover, the anti-viruses will also prevent them from cyber-attacks.
Due to the increased level of competition in online retail business, Toy Rus has both online and offline stores. At the moment, the company has a facility in Sydney, where is sells its toys to the many middle-income earners in the town. Despite the progress and profits that the business has earned over the last two years, this process has faced a lot of challenges due to the unique differences between these two businesses. In particular, the business faces challenges on data management, inventory visibility and availability.
Toy Rus business faces a great challenge in the management of its data due to the need to merge both the online and offline businesses. Generally, the company must merge these systems so that it can have a true and clear picture of the company’s performance. For example, the daily reconciliation of the online and offline business is essential in calculating the actual profits that the business made on a specified day. The challenge in the data management normally occurs due to discounts, damaged goods, and bonus items that are issued without been directly fed into the system. As a result, there can be deficits or surpluses in the amount of cash or inventories in the business (Li, Ragu-Nathan, Ragu-Nathan, & Rao, 2004). In addition, the lack of physical track records for monitoring online gift cards makes it difficult for businesses to trace these awards, which in turn affects the accounting of inventories.
Due to the continuous and seamless shopping in both the physical and online retail business, there is always a challenge in accepting to process a customer’s order and finding that it has already being processed by another department. Although the system automatically removes items that are not in the store when they have been sold, there is a considerable amount of time taken before a product is removed from the website (Kreitner & Cassidy, 2012). For example, in the case of only one unit remaining in the store, a significant amount of time is spent when negotiating on the product. Unfortunately, by the time the customer and our sales agents settle on a price, an online buyer might have already purchased the product.
In an online payment system, the company is able to protect its cash account by ensuring that the finances are directly deposited to its bank account. In addition, most online businesses have few point of sale machines. Therefore, it is easy to control the company’s cash sales and ensure there are no cash mismanagements (Bateman & Snell, 2016). However, the combination of both the online and offline retail businesses results in the need for many point of sale (POS) machines and a higher likelihood of cash payments. As a result, the use of these two methods increases the risk of pilferage.
The current modern customers are exposed to a wide array of products due to the availability of sophisticated technology and internet connection. As a result, it is always difficult for businesses to convince customers to buy products for a specified price or a given quality. Due to the presence of high technology, customers can easily and readily access high-quality products that are priced at a low price from various online shops (Gunjan, Pooja, Kumari, Kumari, & Rao, 2012). Moreover, the ease of access to various unique products and services that are offered by competitors changes the type of products that are demanded by customers. In particular, these customers require that products should be customized to their unique tastes and preferences.
One of the greatest challenges in both online and offline retail business is ensuring labor efficient. In practice, most organizations are always faced with the challenge of determining the optimal ratio for their employees. On one side, having too many employees will make the company incur unnecessary high costs of labor. On the contrary, too few workers may compromise on the quality of services that the company offers (Bodie, Kane, & Marcus, 2012). Further, the metric used to measure the adequacy of workers differs in an online and offline business. In online business, employees are mostly measured on the rate at which they process orders placed by customers. In an offline retail, there are other considerations such as negotiation with customers and more customer care service (Adrian, 2014). As a result, determining the appropriate basis for judging if a business has adequate employees is difficult, especially where the company has combined both the online and offline retail business.
To sum up, the Toy Rus online business will consider all the factors that affect its internal and external environment. The company will use an IaaS cloud that will be a hybrid system. This method will ensure Toy Rus provides adequate protection of sensitive information by using the private system while at the same time enabling the company to share, store, and receive non-sensitive information using less costly systems. In its e-commerce business, the company will focus on understanding its target audience so that it can provide services that meet their needs. In addition, it will also evaluate the size and nature of the market in order to find if the online business is viable. It will also check the characteristics of the competitors in order to identify how it will strategically position itself in the market.
In terms of security, Toys Rus will use security sockets layer (SSL) and transport layer security (TLS) protocol, virtual private networks, firewalls, proxies, intrusion detection and prevention system, and antiviruses to protect the system. The merger of the e-commerce and offline retailing shows various challenges that the business must overcome in order to succeed in its business. To succeed in this operation, the business must understand issues on data management, use of technology and innovation in retail business, as well as inventory visibility and availability.
- The business should use an IaaS hybrid cloud system. This system will ensure that Toy Rus is able to access additional resources when it wants to add its capacity. The hybrid cloud system will enable the business to process its private information through its own private network while at the same time guarantee that it has the ability to store, transmit, and receive non-critical information using the unaffordable
- Toy Rus should also access conduct the market analysis of the toys online business before it decides to invest into the business. This method will enable Toy Rus to avoid losses that are due to wrong investment strategies or investing in a wrong industry.
- Toy Rus should also implement measures aimed at protecting its systems from cyber-attacks and malware. To ensure that the system is protected, the company should use systems such as virtual private networks, firewalls, and proxy servers.
- Toy Rus should reconcile its books of accounts for the online and offline retail business to ensure that there are no errors in its accounting process.
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|1-5th January 2017||5 days||Research on how to make a website using WordPress
Development of Toy Rus Website
|Since Joomla! Content management is made using WordPress, the understanding of how to make a website using this tool was important for my study.||https://en.support.wordpress.com/using-wordpress-to-create-a-website/|
|6-8th January 2017||17 hrs||Research on cloud computing from IBM website and journals from EBSCOhost||A research on cloud computing and its importance to businesses||https://www.ibm.com/cloud-computing/learn-more/what-is-cloud-computing/
|12th January||12hrs||Research on e-commerce using the internet and from journals and books||These research aimed at finding ways that may be used to make Toy Rus competitive, and challenges that it may face in its operations.||http://www.proquest.com/products-services/ebooks-main.html
|13th January||8 hrs||Research on e-commerce security. The research was conducted on the internet and from journals and textbooks||The research was to find the threats to Tou Rus e-commerce business and how these challenges can be overcome.||http://www.computerweekly.com/feature/Making-e-commerce-secure
|14th January 2017||12 hrs||Research on e-commerce retailing. The research was conducted on the internet and from journals, and textbooks.||The purpose of this research was to determine the challenges and opportunities present in e-commerce. Therefore, a study of businesses that already have e-commerce systems and research articles and books on this topic was important in acquiring insight of what to expect in Toy Rus online retail business.||http://www.investopedia.com/terms/e/electronic-retailing-e-tailing.asp