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Strategic Plan

Buy and Sell Max A strategic plan for BuyAndSellMax.com In partial fulfilment of the course requirements For the course Strategic Management

Submitted by Cheesecake ALIP, Alexyss Anne CHAN, Kendrick DELA CRUZ, Monica KAUR, Simranpreet SULIT, Jhanna STRAMAN K32 December 10, 2011

Strategic Plan

Table of Contents
Executive Summary .................................................................................................................... 4 Company Profile ......................................................................................................................... 5 Vision ...................................................................................................................................... 5 Mission .................................................................................................................................... 5 Objectives ............................................................................................................................... 5 Organizational Structure .......................................................................................................... 5 Brief History of Performance ................................................................................................... 6 Internal and External Links .................................................................................................. 6 Indexed Pages..................................................................................................................... 6 Backward Links ................................................................................................................... 7 Financial .............................................................................................................................. 7 Online Traffic ....................................................................................................................... 7 Value Proposition: Products and Services ............................................................................... 8 Key Directors, Officers, and Related Interests ......................................................................... 8 Partners and Linkages ......................................................................................................... 8 Current/Recent Generic and Functional Strategies and outcomes .......................................... 8 Problem Statement ..................................................................................................................... 8 Situationer on the Business Trading Portal Industry .................................................................... 9 Assessment of Internal Environment ....................................................................................... 9 Strengths ............................................................................................................................. 9 Weaknesses ...................................................................................................................... 10 Assessment of External Environment .................................................................................... 13 Online Business Trading Portal Industry Profile ................................................................. 13 Porters 5 Forces ............................................................................................................... 14 Opportunities......................................................................................................................... 15 Increase in Group Buying Sites.......................................................................................... 15 Development of Broadband ............................................................................................... 16 Website Analytics Tools ..................................................................................................... 16 Social Networking Sites ..................................................................................................... 17 Dominance of Urban Professionals.................................................................................... 18 Threats .................................................................................................................................. 18 New Entrants ..................................................................................................................... 18

Strategic Plan

Substitute Products and Services ...................................................................................... 18 Bargaining Power of Buyers .............................................................................................. 18 Bargaining Power of Sellers............................................................................................... 19 Intensity of Competitive Rivalry .......................................................................................... 19 BuyAndSellMax.com Competitive Position......................................................................... 21 Objectives of the Company ....................................................................................................... 23 Financial and Short Term Quantitative Objectives (1 year) .................................................... 23 Short Term Quantitative Objectives ................................................................................... 23 Strategic Objectives (3-5 years) ............................................................................................ 24 Matching-Generate Alternative Strategies................................................................................. 24 SWOT Analysis ..................................................................................................................... 24 Grand Strategy Matrix (GSM) ................................................................................................ 26 First Set of Alternative Courses of Action (ACA I) .................................................................. 27 Generic Competitive Strategies ......................................................................................... 27 Key Complementary Strategies ......................................................................................... 27 Cost-Benefit Analysis......................................................................................................... 28 Second Set of Alternative Courses of Action (ACA II) ............................................................ 28 Generic Competitive Strategies ......................................................................................... 28 Key Complementary Strategies ......................................................................................... 28 Cost-Benefit Analysis......................................................................................................... 29 Decision .................................................................................................................................... 30 Action Plans.............................................................................................................................. 31 Key Complementary Strategies for Recommendation ........................................................... 31 Key Functional and Operating Strategies .............................................................................. 31 Implementation Issues .............................................................................................................. 32 Potential Problem Analysis ................................................................................................ 32 Conclusion ................................................................................................................................ 33 Bibliography .............................................................................................................................. 34

Strategic Plan

Executive Summary This strategic plan aims to set the direction to improve the competitive position of BuyAndSellMax.com in the online business trading portal industry in the Philippines. The lack of vision, mission and organizational structure of the company may also be a hindrance to the full implementation of the any strategies recommended. The proponents strongly suggest that management carefully formulate a vision and mission statement that more or less resembles the two below: To be the leader in the Philippine online business trading portal and other related services To be the leader in the Philippine online business trading portal, we must provide quality online buy and sell services in the markets we serve, use leading website development techniques to provide added value and eliminate non-value adding costs while maintaining stability and sustainability in terms of the companys human capital, financial resources and relationship with all our stakeholders The proponents used various strategic analysis tools in order to assess the current status of the website and the condition of its environment. Research revealed that the industry, due to low barriers to entry, has numerous players and a handful of strong competitors such as Sulit.com.ph and AyosDito.com.ph. Increasing access to the internet adds to the market growth in this particular industrycreating a diverse set of wants and needs from the multitude of users. In order to fully maximize the opportunities, dull the blow of threats, address weaknesses and capitalize on the strengths of the website, the group recommends that management consider a focus-differentiation strategy complimented with market penetration and service/product development strategies. This particular set of strategies will allow BuyAndSellMax.com to tap markets that are still not addressed by existing competition. In addition, the characteristics of the industry will also aid in the implementation of the strategies considering that the online business trading portal has fast-paced technological changes and the vast potential customers with diverse wants and needs. For this strategy to work there is much to be invested in the research and development of the website. Considering that the advertising revenues of the website have declined, the group recommends that the management coordinate with various advertising agencies rather than relying on adBrite.com. Also, it is recommended that the management find other means of generating revenue. Another potential problem in the strategy implementation would be the lack of structure of the company. The proponents advise that this be immediately addressed prior to any efforts in strategy implementation and ensuring that the structure proposed is aligned with the vision, mission and goals of the website.

Strategic Plan

Company Profile Vision As the group was not able to find any vision for the company, it is recommended that the management of BuyAndSellMax.com formulate a vision. The formulation of the vision will enable management and key human capital to streamline their efforts as well as other resources into making the website what they aim it to be in the future. Considering the lack of vision or the lack of evidence that there exists as such, the group proposes the vision below, which is derived from the guidelines for this strategic plan. To be the leader in the Philippine online business trading portal and other related services Mission There are no available data regarding the mission of the company, if there is one. The group strongly recommends that a mission be formulated in order to clarify the purpose of the website and to streamline all strategic, functional and financial objectives towards aforementioned purpose. In order to streamline this strategic plan, the proponents used the mission formulated from the implications of the data gathered as well as the guidelines for this strategic paper. To be the leader in the Philippine online business trading portal, we must provide quality online buy and sell services in the markets we serve, use leading website development techniques to provide added value and eliminate non-value adding costs while maintaining stability and sustainability in terms of the companys human capital, financial resources and relationship with all our stakeholders Objectives The groups research did not yield any definite current objectives of BuyAndSellMax.com As such, the group recommends that along with the vision and mission statement, management of the website formulate strategic and functional objectives in order to streamline the companys efforts and to evaluate performance. For the purpose of this paper, the objectives to be used in formulating the problem statement would be the strategic and functional objectives developed by the group to be discussed after the environmental audit. Organizational Structure There is no apparent organizational structure for the company. The group recommends management consider establishing an organizational structure in order to delineate tasks and duties that need to be done effectively and immediately to achieve the objectives of the website. In addition, the organizational structure formulated should be cohesive to the websites vision, mission and objectives.

Strategic Plan

Brief History of Performance Internal and External Links Figure 1.1 Comparison of Internal and External Links of BuyAndSellMax.com from 2009 to 2011

Source: SmartViper 2011 Internal and External links of a website influences the number of indexed pages or pages that can be recognized in search engines. The fewer the external links there are compared to internal links of the website, the more indexed pages it has. From 2009 to 2011, BuyAndSellMax.com has maintained a sizeable gap between their internal and external links. Thus ensuring that there are substantial indexed pages to increase the traffic the website has. Indexed Pages Figure 1.2 Number of indexed pages of BuyAndSellMax.com from 2009 to 2011

Source: SmartViper 2011 The websites indexed pages have fluctuated from 2009 to 2011 which also reflects the fluctuations in the number of internal links relative to the external links of the website. The increased number indexed pages proportionally increases the visibility of the website in search

Strategic Plan

engines should internet users type particular key words that can be found on the webpages of BuyAndSellMax.com. Backward Links Figure 1.3 Backwards links of BuyAndSellMax.com from 2009 to 2011

Source: SmartViper 2011 Backward links direct users from one website to another. The figure above shows that the backward links of BuyAndSellMax have significantly decreased. Financial Table 1.1 Website financial worth and annual advertisement earning 2010 Website Financial Worth Annual Advertisement Revenue Source: www.markosweb.com & www.doloop.com These figures were both derived from website analyst tools that used advertisementbased business model and the average amount of traffic of the website. The total worth of BuyAndSellMax.com has decreased by 52.79%. Online Traffic Buy and Sell Max receives around 270 unique visitors every month, each of whom comes back to the site once. In terms of traffic, it ranks 519,928 on Alexa and rank 1,883,032 on Complete, which is relatively low compared to some of its peers as shown below. Table 1.2 Comparison of traffic received by BuyAndSellMax.com compared to major players in the industry Alexa Buy and Sell Max Sulit.com.ph Ayosdito.ph Source: www.sitetrail.com 519,928 1,651 10,366 Complete 1,883,032 5995 185,382 $6,743.03 $7,932 2011 $3,559.89 $1,817.70

Strategic Plan

Value Proposition: Products and Services Buy and Sell Maxs primary revenue generating source are the advertisements fees it receives from advertising agencies for the ads spaces in the site. As for its users, they can be classified into two categories, the buyers and the sellers. For the sellers, it creates an avenue where they can post their products for sale, with the assurance that their products would have exposure or can be viewed by buyers who are looking for that specific product, or browsing through the catalogue. As for the buyers, it gives them convenience in terms of finding the lowest possible price for a good since they have access to information, all in one site which can be compared side by side. Key Directors, Officers, and Related Interests Partners and Linkages Association of Classified Site Owners (AOCSO) BuyAndSellMax.com is part of the Association of Classified Site Owners. This association provides additional traffic for its members by redirecting potential customers to the website daily. (Creative Software System, 2011 & BuyAndSellMax.com, 2011) EZclassifields.com EZclassifieds.com is for owners of websites. Members of the community in EZclassifieds.com exchange ideas and information while redirecting traffic to their websites as well. Members set up classifieds in this website in order to redirect traffic to their own websites. (EZclassifieds.com, 2011 & BuyAndSellMax.com, 2011) Advertising Agencies One of Buy and Sell Maxs primary customer would be adBrite. adBrite is the largest independent ad exchange, reaching 300 million global unique visitors every month. Another would be the internet search engine mogul, Google. Current/Recent Generic and Functional Strategies and outcomes BuyAndSellMax.coms current strategy positions itself as a low cost provider. While the content of the website is organized, it does not have any aesthetic appeal that would catch the eyes of its users. Its layout is also similar to print classified advertisements in newspapers. As such the interface of BuyAndSellMax.com is condensed in that it does not maximize the window available. This is a good layout if it were a print advertisement in a newspaper, but considering the difference in the medium used, it would have been to the advantage of the website to place pictures and be more creative with its layout and design. Despite this, the ease with which a user can navigate through the website makes up for the lack in aesthetic appeal. But this has proved detrimental as it because the user interface to per relatively unattractive which caused a lower traffic rate. Problem Statement BuyAndSellMax.com is experiencing declines in key success indicators of website performance. Advertising revenues have decreased in half, website worth in several reports has decreased and traffic received by the website is lower compared to its early years in the business.

Strategic Plan

Situationer on the Business Trading Portal Industry Assessment of Internal Environment Strengths An organized categorization of the products that are being sold is one of the main strengths of the website. It divides its products according to the following categories: General, Computers, Real Estate, Automobile and Other Vehicles, Electronics, Services, Business/Commercial, Entertainment, Travel and Events. More than that, the categories are further divided into sub-sections which makes the sorting more specific. This systematic way of classifying the products avoids confusion and helps save time on the part of the browser to get to the product they wish to purchase. In addition, these categories are instantly listed on the home page of the website, thus facilitating faster browsing. Because of this feature, it only takes a few clicks for the user to find the product. This also increases customer satisfaction since the time spent on loading new pages is minimized. The website also enables non-members to post an advertisement about the product they wish to sell. Because it is relatively easier to publish, it may have gained more users compared to when it will require a membership. The form that they are using is simple, convenient and user-friendly, especially to the older market who are not very familiar with the workings of the new technology. One of the most noticeable features of the website is that it has safety tips displayed on the side of the home page. Its three main tips are about shipping documents and payments, giving out personal data, and bogus sellers or buyers. As there is a growing trend of anomalies that lurk the online selling industry as shown in the figure below, the proponents find it appropriate that websites display box of reminders on these irregularities be classified as a great idea that may entice users to constantly use the website. In addition, it is a good way of showing how the website values the safety of its major stakeholder: the customers. Figure 2.1 Yearly comparisons of complaints received regarding internet scams

Source: 2009 Internet Crime Report

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Potential customers of BuyAndSellMax.com come across the website through its established back-links, indexed pages and established authority. One of the measures by which a websites authority is described is the Google Pagerank scale. Google Pagerank is a reputable means by which websites are given rankings based on its established authority amount of traffic received, interaction with users and internal and external linkages. Google Pagerank, as shown in Figure 2.2, has a logarithmic scale of 1-10, thus it becomes more difficult for a website to get promoted to a higher pagerank as it climbs up the scale. According to Google Pagerank, BuyAndSellMax.com has a pagerank of 3. A small business website that has a Google Pagerank of 3 has established reasonable authority and is visible to internet users who are doing niche searches. (OM4, 2011) Figure 2.2 Google Pagerank Scale

Source: www.om4.com.au Weaknesses The first weakness that is most visible is the unattractive interface of the website. While the interface looks organized and follows the F-shaped principle in web layouts as shown in the figure below, the design of the website lacks colors and textures elements needed to grab a persons interest. As suggested by psychology, it only takes a few seconds to lose someones attention. So if the appearance of the website is plain, then it is likely that the website will lose its potential customers. This is the exact reason why the website layout is one of the most important things to consider. If only the developers direct their attention in improving the design, the BuyAndSellMax.com may gain more customers and be at par with other leading websites like sulit.com.

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Figure 2.3 Heat map of BuyAndSellMax.com

Source: www.markosweb.com Another weakness in the website is that membership is required for one to purchase a product. We recognize that this is a way of the website to control and monitor the information being shared. However, there are many other ways in which the website can achieve the same goal without having the browsers sign-up for membership. We think that having to sign-up will make the customers less interested and look for other websites that no longer needs a membership. This also requires more time on the part of the client to fill out the necessary information and wait for the data to be processed. Ultimately, this might result to a decrease in customer satisfaction. According to several website analysis reports, the back-links of BuyAndSellMax.com are few. These back-links allow internet users to come across BuyAndSellMax through other websites, increasing a websites traffic. Since there are few back-links, few are able to visit the website unless they input the websites URL immediately or input it or its related key words in search engines. Lastly, the group considers the lack of recognition of BuyAndSellMax in numerous social networking sites such as FaceBook and Twitter as a priority weakness. The growing trend of increased usage of social networking sites makes such sites ideal for E-businesses to set a platform for or in the very least make a company page in. Recognition in such sites would allow BuyAndSellMax to increase their traffic. This also becomes a major concern most especially since competitors of BuyAndSellMax.com have established company pages in many of these social networking sites.

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Table 2.1 Internal Factors Evaluation Matrix Key Internal Factors 1. Organized categorization of the products being sold 2. Faster browsing or fewer clicks 3. Appearance of safety reminders on the home page 4. Non-requirement of membership to post ads 5. Google Pagerank 3 Total Weaknesses 1. Unattractive interface 2. Requirement of membership to purchase products 3. Few backward links that redirect users of other high authority websites 4. No presence in social media 5. Low Search Engine Optimization rankings Total TOTAL SCORE 0.05 0.05 0.1 2 1 1 0.1 0.05 0.1 Weight Rating Strength 0.10 0.15 0.05 0.10 0.10 3 4 3 4 3 0.3 0.6 0.15 0.4 0.3 1.75 Weighted Score

0.15 0.15 1

1 1

0.15 0.15 0.55 2.3

BuyAndSellMax.com has a weighted average score of 2.3 for its internal factors. This result is average for any website within the online business trading portal in the Philippines. The website still needs to improve their strengths to develop competitive advantage and cushion their weaknesses.

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Assessment of External Environment Online Business Trading Portal Industry Profile According to www.theonlinetradingguide.com, Online trading portal is one of essential parts of online trading. Online portal is a website system which gives both traders and brokers an access to a great variety of financial news and information which enable traders to take their decisions. While choosing an appropriate online trading portal, one should pay attention to the company who provides this particular service. All portals are different but at the same time they have common features which are typical for all of them. Online trading portals provide their visitors with articles, quotes, analyst recommendations and research. Some of such online trading portals have useful links to different relevant sites, chat rooms, discussion online forums and e-mail accounts. All types of online trading are based on thorough monitoring and analysis, that's why every trader needs reliable information in real-time, because they have to trust this data and make their decisions according to it. In the Philippines, the online business trading portal industry or commonly known as online buy and sell is booming. The number of trading sites increased dramatically when consumers shift their shopping habits from going to the mall to buying online for convenience. What buyers and sellers dig in online trading sites is that the prices are relatively cheaper. The incentive to do business online is greater than to sell goods in the mall where youll pay a monthly rental fee, your goods are subject to tax and some additional costs incurred that will make your prices relatively higher. In an online business trading site, buyers and sellers have the convenience of transacting through cyberspace. Entrepreneurs are encouraged by the buy and sell sites because some of them are creating an industry of their own, an industry that do not exist in the traditional shopping world. Currently, www.sulit.com.ph is the number one buy and sell site in the country because you can sell anything as easy as cake. What makes this site very strong is its search engine optimization (SEO) value. The SEO value Sulit.com.ph enables its pages to be indexed in various search engines such as Google thus creating more traffic for the website.

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Porters 5 Forces Figure 3.1 Porters 5 forces

Political, Governmental, and Legal Forces Social, Cultural, Demographic and Environmental Forces Competitive Forces

Economic Forces

Technological forces

Macroeconomic Analysis Economic Forces The group noted the giant strides made by economic managers in improving the fiscal situation. The government posted a fiscal surplus of P61 million in the first four months of 2011, a stark improvement from the P131.8 billion deficit in the same period in 2010. Gross international reserves rose to $68.8 billion (equivalent to 10.6 months worth of imports) as of end-May, from $48.7 billion (8.4 months of imports) in end-June 2010. The countrys balance of payments surplus expanded 174% to $3.5 billion in the first quarter of 2011 from $1.3 billion in the first quarter of 2010. Approved investments rose 76 percent to P162 billion in the first quarter of 2011 from P92 billion a year ago, and what is even more striking is that P140 billion of that amount was accounted for by Filipino investors, rising 211 percent from P45 billion in the first quarter of 2010. The improvement in net foreign portfolio investments was just as remarkable, climbing 208 percent to $2.2 billion in January to the first two weeks of June from just $699 million a year ago. The agriculture sector reported a strong 4.2 percent growth performance in the first quarter of 2011, bouncing back from a 1.8% slump in the first quarter of 2010. The average unemployment rate dropped to 7.3% in the first two quarters of 2011 from 7.6 percent in the same period in 2010, although we note that the average underemployment rate increased to 19.4 percent from 18.6 percent. Social, Cultural, Demographic and Environmental Forces With a total population of 101,833,938 (July estimates) and a median age of 22.9 years, the young urban professionals dominate the online business trading portal industry. They are the massive users of these sites because they adapt easily to the changing and fast-faced society.

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Political, Governmental and Legal Forces Year One of the Aquino administration was appropriately a year for laying the foundations for good governance and setting our fiscal house in order to ensure that future gains would be sustainable and on solid footing. The deficit management, the Luneta hostage crisis, the GOCC Governance Act of 2011, fiscal reforms and implementation among others have an effect in consumer behavior and paradigm shifts of the online business trading portal industry. The Aquino administrations fiscal reforms and implementation of policies that promote macroeconomic stability have inspired the confidence of the international investment community. The highly successful issuances of long-term peso-denominated global bonds and the bond swap whereby nearly P200 billion of the countrys old debts were exchanged for new 10- and 25-year bonds were unprecedented and indicative of foreign investors optimism in the countrys long-term economic prospects. Technological Forces In the advent of technological advances, almost everyone has access to the World Wide Web. Almost anyone can set-up an account in different online buy and sell portals and transact not only within the Philippines, but also to the other parts of the world. This is a great opportunity for online shopping sites because the convenience of publicizing is likely. Competitive Forces Over the years, internet has become a venue where individuals can exhibit their creativity and innovativeness. Because of the freedom and wider network coverage, internet won the attention of many business-minded individuals who want to reap out the advantages offered by it. This led to the emergence of different websites that offers a variety of products and services. A very good example of these websites is www.BuyAndSellMax.com which will be the focus of our analysis in this paper. Buyandsellmax.com is a website that enables individuals to buy and sell products over the internet, primarily catering the Filipino market. This is a venue where buyers are free to look for items and products they want to buy and where sellers can freely post advertisements about the products their selling. Sulit.com.ph also categorizes its products and services into: Buy and Sell, Real Estate, Cars and Automotives, Business Products, Services and Added Value To fully understand BuyAndSellMax.com, we analyze its business model using the Porters Five Forces. This analysis model will help us determine the BuyAndSellMax.com competitiveness and market attractiveness. The five forces include: (1) the threat of the entry of new competitors, (2) the threat of substitute products and services, (3) the bargaining power of buyers, (4) the bargaining power of suppliers and (5) the intensity of competitive rivalry. The following sections will thoroughly discuss each force and how it relates to our subject, BuyAndSellMax.com. Opportunities Increase in Group Buying Sites Group buying sites are websites that coordinate with various online businesses on the prices, terms and conditions of purchases on behalf of customers. Should BuyAndSellMax.com coordinate with such sites, more traffic could be directed to BuyAndSellMax.com. In addition,

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creating such external linkages would aid BuyAndSellMax.com to identify their market and further penetrate it. (Narayanasamy, S., 2011) Development of Broadband The recent development of broadband in the Philippines has increased the accessibility of the World Wide Web to most of the population. Thus, more Filipinos are able to go online every day. Those who are online are potential traffic for BuyAndSellMax.com. (Evans, P., 2011) Website Analytics Tools Since the discovery of the Internet, website making has steadily ingrained itself in the lives of many. Website making has become a hobby, a means of networking and a business. As shown in the figure below, the numbers of websites that have been developed have substantially increased over time. This increase in websites, especially in the e-commerce industry, has prompted the need for website analytics tools. Such tools evaluate the performance of the websites, usually in terms of traffic received among other criterion. Figure 3.2 Total websites from August 1995 to April 2009

Source: www.amitbhawani.com Should BuyAndSellMax.com decide to avail of the services of a website analytics tool such as Google Analytics, website performance would be appropriately evaluated in terms that are aligned with similar websites to BuyAndSellMax.com. This would aid the website in learning their position within the industry and how to improve on it.

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Social Networking Sites Figure 3.3 Social networking site use by online adults from 2005-2011

The 21st century has seen the beginning of the age of social networking sites. Every year, more people use social networking sites as shown in the figure above. Social networking sites have optimized the internets ability to cross geographical borders and reach multitudes of people. This presents an opportunity for all online businesses to make their presence known to potential customers via social networking sites such as FaceBook and Twitter.

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Dominance of Urban Professionals Reports on traffic received by social networking sites show that urban professionals outnumber other demographic classification in using social networking sites. (Management Centre International Limited, 2011). Online businesses can place this information to their advantage by developing their strategies and implementing them with the urban professionals as their focal point. Considering the large portion urban professionals make up on the entire potential market, targeting them would increase the market share of online business to a sizeable proportion. Threats New Entrants Since the internet allows free entrance of entrepreneurs, we believe that the barriers protecting this buy-and-sell industry is quite low. Competitors can freely enter the industry since the cost associated with the establishment of a sophisticated website is relatively cheaper than the cost required in other industries not using the internet. However, the loyalty of its account users may also serve as a barrier since entrepreneurs are more unwilling to establish such website if they know that buyers are not willing to switch from a website they are used to browse. Another disincentive for entering the said market would be the high cost of shipping products, bank inter-branch fees and other fees associated with money transfers. If these costs increase, entrepreneurs will be less willing to venture into this market. Having all of these said, threats of the entry of new competitors is a big of a problem for BuyAndSellMax.com since it is just paving its way to be known in the industry. Substitute Products and Services Since BuyAndSellMax.com is a virtual store, the main threat to this online buying and selling site are the retail stores which offers customers the out most satisfaction of seeing the products personally. Traditional buyers, who usually inspect the goods they are buying, still dominate the market. For instance, a person wants to buy a pair of jeans, instead of buying a pair of jeans in sulit.com.ph, hell prefer to go to SM Malls because he can fit the actual item before buying it. The service that a physical store can give to a traditional buyer, sellers in BuyAndSellMax.com cannot offer. Additional fees shouldered by the buyers can also be a major threat for the site - shipping fees, interbranch bank fees, and fees charge by money transfer companies such as Cebuana Lhuillier and LBC Kwarta Padala. A traditional buyer wouldnt want all the hassle of paying the product in a bank or money transfer company and wait (for days) for the actual item to arrive at his doorstep. Door to door sales and direct selling companies could also be a threat for BuyAndSellMax.com since direct selling companies offers a very convenient buying and selling experience for buyers. Agents of Avon, Sara Lee, Natasha, Boardwalk etc. are the ones who go to the buyers instead of the buyers going to them. Traditional buyers may also prefer direct selling products because they can see the products personally. Bargaining Power of Buyers Sellers in BuyAndSellMax.com offer some of the cheapest products in the market, in some ways. Buyers have a bargaining power since they can haggle with the sellers. If there will be a feature in BuyAndSellMax.com wherein you can easily see the lowest price for a specific product, the bargaining power of the buyers comes from the convenience of knowing in just a snap, the seller who offers the lowest price - and then buyers will buy from him. For instance, a buyer wants a new cellphone, he needs to visit every retail store in SM Cyberzone and ask for

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their prices individually. Canvassing for prices is really a waste of time hence, BuyAndSellMax.com will offer the out most convenience for buyers who are looking for a specific product. Many products are being sold in BuyAndSellMax.com. There is no limit on what you can sell in this site, therefore, sellers would want their products to be attractive thus, lowering their prices. They can easily do this because they dont have rents to pay, almost all sellers in BuyAndSellMax.com dont give receipts (which means they dont pay taxes).

Bargaining Power of Sellers You can sell anything in BuyAndSellMax.com, therefore, sellers find this as a lucrative place to do business. The bargaining power of sellers comes from the demand of the buyers for a specific product. For instance, many scalpers took advantage of the high demand for tickets in the recent Smart Ultimate All Star Weekend NBA held in Araneta Coliseum. A P1000 worth of ticket is being sold at P5000 or even at higher prices. Sellers can dictate the price for this kind of product/items because only few are selling it. Intensity of Competitive Rivalry This force talks about the major determinants of the competitiveness of the online buyand-sell industry, particularly BuyAndSellMax.com. One of the most noticeable disadvantages of our subject it that it is not yet known in the buy and sell world. Although BuyAndSellMax.com offers free advertisements and a wide selection of classified ads and these features make the website more appealing to advertisers, BuyAndSellMax.com still has a lot of catching up to do with respect to its rivals niche in the market. One advantage of this website is that it focuses on a specific market: the Filipino market. Though its features are not as sophisticated relative to that of its major competitors, like sulit.com .ph and ebay.ph locals patronize the website since there are less complications and transactions are easily carried out. Considering these points, we believe that BuyAndSellMax.com is not competitive enough in the local setting. The website needs major revamp to attract more users. Table 3.1 External Factor Evaluation Matrix Key External Factors Opportunities 1. Significant increase in group buying sites 2. Development of broadband boost Philippine online trading 3. Numerous available analytics tool that can be used for derivation of traffic information and interpretation 4. Increasing trend of social networking sites such as FaceBook and Twitter 5. Urban professionals dominating the demographics for users of online trading portals Total Threats 1. High SEO made sulit.com.ph the highest ranking 0.10 3 0.3 0.05 0.15 0.12 2 1.5 2. 0.1 0.225 0.24 Weight Rating Weighted Score

0.12 0.15 1.00

0 1

0 0.15 0.715

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in search engines

2. eBay.ph launched its Kuponan (i.e. social buying) service 3. eBay Philippines launched its Charity Fundraising Platform in the country with GMA Kapuso Foundation as its first registered charity 4. Low barriers to entry for direct and indirect competitors 5. Free-hand advertisement design and layout feature for members of Sulit.com.ph Total TOTAL SCORE

0.10 0.02

1 0

0.1 0

0.15 0.04

1 1

0.15 0.04 0.59 1.305

Overall, BuyAndSellMax.com has done very little in order to grab the opportunities and maximize them. Neither did the management of the website respond well to the threats in order to minimize the harm it could bring.

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BuyAndSellMax.com Competitive Position Table 3.2 Criteria for Website Performance Factor First Impressions y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y Description/Elements Website design and layout Simple and explicit URL Download time Readability Above the fold home page Value proposition Ability to take action Depth of site Contact details Credential validation Use of attractors Need for registration Ease of use Site Map Redirect to home page from any page Internal search engine Internal links Opens multiple windows Useful information Degree of substantiated information Level of interaction Use of valuable graphics Use of valuable animation Use of valuable sound Reviews, testimonials and certifications Content in digestible quantity Up-to-dateness Available in multiple languages Terms and conditions FAQs Availability of follow up discussion Promotions Breaking news Ease of access by external links Newsletter Intuitive URL Optimal use of SEO Advertising Partner and affiliate sites E-mails and other details visible Response time to inquiries Use of online forms Telephone contact number provided

Navigation

Content

Attractors

Findability

Making Contact

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y Telephone call back offered Internet Explorer Netscape Navigator Mac Mozilla Firefox Google Chrome Resizeability Availability of utilization statistics Adaptive Website Offers based on buying history Robustness/reliability of the site Clicks to completion Recognising pre-inclusion Supplier terms and conditions List of products bought by user Contact details of suppliers List of career opportunities Contact details for HR department Financial results Up-to-date financial news History of the company Management and geographical structure of the company Vision and Mission statement Up-to-dte press coverage

Browser Compatibility

y y y y y y y y y y y y y y y y y y y y y y y

Knowledge of Users

User Satisfaction

Other Information

Useful

Source: Management Centere International Limited According to the Management Centere International Limited (MCIL)a reputable management consulting agency for online businesses, a websites performance can be evaluated by the abovementioned factors. These factors were considered by the proponents as the critical success factors for an online business trading portal and was used in the Competitive Profile Matrix in the following page.

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Table 3.3 Competitive Profile Matrix BuyAndSellMax.com AyosDito.com.ph Rating 4 3.5 4.5 4.5 4 5 3.5 4.5 4.5 4 Score 0.6 0.28 0.45 0.45 0.48 0.4 0.175 0.675 0.675 0.2 4.385 Sulit.com Rating 4 4 4.5 4.5 4.5 5 5 4.5 4 4.5 Score 0.6 0.32 0.45 0.45 0.54 0.4 0.25 0.675 0.6 0.225 4.51

Critical Success Factors First Impressions Navigation Content Attractors Findability Making Contact Browser Compatibility Knowledge of Users User Satisfaction Other Useful Information Total

Weight 0.15 0.08 0.1 0.1 0.12 0.08 0.05 0.15 0.15 0.05 100%

Rating 2 3 3.5 2 3.5 1.5 5 1 1 1

Score 0.3 0.24 0.35 0.2 0.42 0.12 0.25 0.15 0.15 0.05 2.18

BuyAndSellMax.com in general needs to improve on most of its critical success factors. Of these factors, the website needs to place special emphasis on its first impressions, knowledge of users, making contact, user satisfaction and attractors. Maintaining focus on these three factors should also include the continued maintenance and improvement in terms of the websites findability and content. Results of the competitive profile matrix also show that the major players of the industry where BuyAndSellMax.com belongs in have considerably high ratings for all critical success factors. As such, in order to cement BuyAndSellMax.coms position in the market and to develop competitive advantage, the website must also ensure that these factors are being improved on continuously. Objectives of the Company Financial and Short Term Quantitative Objectives (1 year) Short Term Quantitative Objectives For the websites short term quantitative objectives, the group included the following as supplied by the CEO and based on the research gathered. To increase total visitor traffic by at least double by 2012 To increase revenue by 50% within a year o Bring revenues up to $2,726.55 a year (Computation: annual revenue as reported in StatShow 2011 = $1,817.70; $1,817.70 x 1.50) Upon additional research on what makes a website effective, the proponents also put forth the following as short term quantitative objectives in addition to what has been aforementioned. To increase number of registrations to 50%

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To raise the number of indexed pages equal to the existing number of webpages of the site

Strategic Objectives (3-5 years) To increase market share in the online business trading portal industry To achieve website leadership among players in the online business trading portal industry To develop healthy relationships with key stakeholders Matching-Generate Alternative Strategies SWOT Analysis Table 4.1 SWOT Matrix

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Grand Strategy Matrix (GSM) Figure 4.1 Grand Strategy Matrix for BuyAndSellMax.com

Quadrant II Rapid Market Growth Weak Competitive Position

Quadrant I Rapid Market Growth Strong Competitive Position

Quadrant III Slow Market Growth Weak Competitive Position

Quadrant IV Slow Market Growth Strong Competitive Competition

The online business trading portal in the Philippines is a competitive industry with major players such as Sulit.com.ph and AyosDito.com.ph dominating the market. However, since there are low barriers to entry, many still opt to open an online business trading portal. In addition, the market is still growing as the society is still at the height of using internet to buy and sell services. Considering these, BuyAndSellMax.com belongs in an industry with rapid market growth but with weak competitive position. Taking into account the circumstance of the website, there are several alternative strategies available to BuyAndSellMax.com. The following strategies can be adopted by the website. 1. 2. 3. 4. 5. 6. Market development Market penetration Product/Service development Horizontal integration Divestiture Liquidation

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Strategic Plan

First Set of Alternative Courses of Action (ACA I) Generic Competitive Strategies Differentiation and Product Development Considering that BuyAndSellMax.com have registered users, the website has substantial data on their users. This data can be used and analyzed in order to yield trends and identify the needs of their users, both met and unmet. With this information, the management can choose to develop value-adding features and services to increase perceived value of their users. Knowledge of users, as one of the key success factors for any online business, should be maximized in order to develop competitive advantage to current competitors and new entrants. Also, the industry type, where BuyAndSellMax.com belongs to, will aid in making this particular strategy effective since the online business trading portal industry has fast paced technological changes and buyer needs and uses are diverse. Key Complementary Strategies Research and Development Research on market trends and developing website features and services would help in differentiating BuyAndSellMax.com from other online buy and sell businesses. The following are particular areas of research and development that the website can pursue under this strategy. S1O2O3 Organized categorization of the products being sold Development of broadband boost Philippine online trading Numerous available analytics tool that can be used for derivation of traffic information and interpretation Traffic data on BuyAndSellMax.com can be optimally utilized if it were analyzed and appropriately interpreted. This analysis and interpretation can be taken from services offered by numerous website analytics tools such as Google Analytics. Information provided by such website analytics tools can provide direction as to what unique features and services should be developed. In addition, the increase in internet users provides an opportunity for the website to increase their market share as new internet users enter the playing field and internet users chance upon BuyAndSellMax.com. S3T5 Appearance of safety reminders and tips on the home page Increase in internet crimes and scams BuyAndSellMax.com features safety tips and reminders for its users against internet crimes and scams. Providing additional security for its users and increasing credentials of site content is a possible value-adding feature for BuyAndSellMax.com.

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Cost-Benefit Analysis Table 5.1 Summary of Cost-Benefit Analysis Cost y y y Time consuming Necessitates financial investments Allocate human capital in the development of services y y Benefits Better understanding of users needs and wants Provide direction for website improvement and development

Second Set of Alternative Courses of Action (ACA II) Generic Competitive Strategies Focus-Differentiation, Market Penetration and Product Development The online business trading portal industry has many different niches and segments, considering the vast and diverse users of internet. With this vast potential customers, there are numerous online buy and sell businesses that have been established, especially since there are low barriers to entry. Although there are numerous online buy and sell businesses, few have attempted to specialize in certain segments of the market and some markets have yet to be tapped as well. Considering this, the group proposes a focus-differentiation strategy for BuyAndSellMax.com. A focus-differentiation strategy is a two pronged approach where the website can produce value-adding services to a market niche whose needs and wants have yet to be met. This particular market niche requires unique services that have yet to be provided by other online buy and sell websites. Addressing such a marketing niche would avoid a direct confrontation with major players whose reputation as online buy and sell websites has already been well established. To achieve the desired results of a focus-differentiation strategy, market penetration and product development strategies should be adopted in order to complement the main generic strategy recommended. Key Complementary Strategies W2T4 Requirement of membership to purchase products Low barriers to entry BuyAndSellMax.com requires membership from those who wish to purchase anything from the website. This unique feature, as usually its the suppliers of products and services that apply for membership from online buy and sell websites, already gives the website a database of the trends of their customers. This existing database, once analyzed, could reveal information regarding the needs and wants of their customers. With that information, the website can provide unique services and features for their customers. W2T2 Requirement of membership to purchase products

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eBay.ph launched its Kuponan or its social buying service

The group recommends that BuyAndSellMax.com should outline current benefits of being a member in the registration page. In addition, developing promos and other perceived value adding activities, events and policies should also be accomplished to entice potential members and increase the current database of BuyAndSellMax.com

Cost-Benefit Analysis Table 5.2 Summary of Cost-Benefit Analysis Cost y y y Time consuming Needs financial investment Allocation of human resources y y Benefits Creates a definite direction for development and marketing efforts Existing data from members are already stored and need not be collected Avoids immediate direct competition with already well established online business trading portals

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Decision Table 6.1 Quality Strategic Planning Matrix (QSPM) Key Factors EXTERNAL FACTORS Significant increase in group buying sites Development of broadband boost Philippine online trading Numerous available analytics tool that can be used for derivation of traffic information and interpretation Increasing trend of social networking sites such as FaceBook and Twitter Urban professionals dominating the demographics for users of online trading portals High SEO made sulit.com.ph the highest ranking in search engines EBay.ph launched its KUPONAN or its "social buying" service. EBay Philippines launched its Charity Fundraising Platform in the country with GMA Kapuso Foundation as its first registered charity. Low barriers to entry for direct and indirect competitors Increasing incidents of online scams and internet crimes INTERNAL FACTORS Organized categorization of the products being sold Faster browsing or fewer clicks Appearance of safety reminders on the home page Non-requirement of membership to post ads Google Pagerank 3 Unattractive interface Requirement of membership to purchase products Few backward links that redirect users of other high authority websites No presence in social media Low Search Engine Optimization rankings Total Weight Strategic Alternatives ACA I ACA II
Rating Weighted Rating Weighted

0.05 0.07 0.08

3 4 4

0.15 0.28 0.32 0.10 0.15 0.09 0.21

4 4 4 3 4 3 3

0.20 0.28 0.32 0.15 0.2 0.09 0.21

0.05 0.05

2 3

0.03 0.07 0.01

3 3

0.09 0.01

1 3

0.09 0.03

4 3

0.36 0.03

0.04 0.05 0.05 0.08 0.05 0.07 0.05 0.05 0.05 0.05 1.00

3 2 3 2 3 1 2 -

0.12 0.10 0.15

3 2 3

0.12 0.10 0.12

0.14 0.15 0.05 0.1

2 4 3 2 2

0.14 0.20 0.15 0.10 0.10 2.9

2.23

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The Quantitative Strategic Planning Matrix shows that choosing focus-differentiation and applying both market penetration and product development addresses weaknesses and threats of the website, optimizes opportunities and capitalizes on the strengths of the company more than the other strategy. The group recommends that BuyAndSellMax.com implement the aforementioned strategy. Action Plans Key Complementary Strategies for Recommendation Structure organization to aid implementation of strategies Outsource website analysis services from website analysis tools Key Functional and Operating Strategies Human Resource Department To acquire necessary skills for research and development Public Relations Department To open lines of communication with key stakeholders o Customers o Suppliers o Government and other institutions To develop online feedback mechanism Operations Department To develop a useful and easy-to-use interface To increase meta tags To establish social media presence To enter the site in various website directories Finance Department To determine means of increasing cash inflow To increase coordination with advertising agencies

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Implementation Issues Potential Problem Analysis Table 7.1 Potential Problem Analysis for BuyAndSellMax.com

Potential Threats 1. Insufficient capital 2. Unorganized efforts in strategy implementation

Likely Causes 1.1 Concentration on one specific advertising agency, adBrite for source of advertising revenue 1.2 No existing liaisons with other advertising agencies 2.1 No existing formal structure 2.2 No delegation of tasks

Contingent Actions for Potential Threats 1.1 Develop terms and conditions that would be favoured by advertising agencies 1.2 Find other means of generating revenue 2.1 Create an ad hoc committee to streamline efforts

Preventive Actions for Likely Causes 1.1 Establish liaisons with other advertising agencies 2.1 Create an organizational structure prior to implementation of strategies 2.2 Identify functional objectives of each branch in the organizational structure

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Conclusion While there are still managers and leaders who shy away from strategic planning and implementation due to the many drawbacks such as time consumed during planning, financial burden and complacency with current success among others, history has shown that most if not all endeavours that were successful were planned. The paradigm shift of the business world from short range objectives and goals to sustainability and longevity has enabled leaders, business people and the academe to research and explore the areas of strategic management. The benefits of strategic planning greatly outweigh the costs it would incur in the long term. Strategic management and the tools available make it easier, for those who understand its importance, to assess the situation and appropriately determine the courses of actions that can be taken. Most importantly, it aids management in making informed decisions by providing multi-dimensional viewpoints.

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