Introduction
Preamble
Information technology helps organizations and management with better decision making by having better quality of information available in the form of Internet.
This research is aimed to explore and understand in-depth effects of Internet and E-commerce on small and medium enterprises in UK with a focus on hotel industry. E-commerce allowed organizations to conduct their business in a completely different way by offering online services and electronic transactions.
HISTORY OF INTERNET
The history of internet dates back to late 50's and early 60's during the American and Soviet Union cold war time, when the American government and department of defense funded
ARPA (advanced research project agencies), to develop and build a new communication network that can survive in the nuclear attack and should provide a backup communication channel to communicate during war, the result of this research is the development of internet technologies and its commercialization which took place in mid 90's which now offer countless applications and services in virtually every aspect of life as of June 2009 according to Internet World Stats. Miniwatts Marketing Group. 2009-06-30. http://www.internetworldstats.com/stats.htm. Retrieved 2009-11-06 they estimated the population of Internet users is 1.67 billion as of June 30, 2009.
Internet is a network of interconnected networks all over the world connected through fiber optic cables and through satellites it uses internet protocol suit (TCP/IP) to provide communication and services to millions of users all over the world, it is a network of networks that consist of private, public, academic, business and government networks of local to global scope.
History of E COMMERCE
One of the most popular activity on the internet is E-commerce, which is, buying or selling of products online, that can be business to business or can be business to customer where there is some form of transaction regarding buying or selling of a product or service. This activity comes under the definition of E-Commerce and/ or E-business which is same that of E-commerce.
Because of internet the whole world has become one single market where users from any part of the world can access and use internet for business regardless of their geographical location only one computer with internet connection is required to do business online.
The amount of trade and business increased enormously with the increase in the internet usage with time and during the last decade many companies and organization has changed their business models and developed online business to stay in this competitive environment,
E-Commerce is used in different ways such as on-line banking, online money transactions, supply chain management, electronic data exchange, internet marketing, online travel bookings, hotel and accommodation booking and so many more services used through world wide web.
There is a term called E-tailers? used for retailers doing business online. Almost all the big retailers and businesses has online presence now a days, to name some of them, are M&S, E bay, amazon.com, autotrader.com etc many other businesses like hotel industry also moved towards E-Commerce and most of the hotels big and small take online bookings and do business online.
History of ecommerce is a history of a new, virtual world which is evolving according to the customer advantage. It is a world which we are all building together brick by brick, laying a secure foundation for the future generations.
SMALL AND MEDIUM ENTERPRISES
The European Commission (2003) defines SME's as follows: "Micro enterprises are enterprises with a maximum number of 10 employees, a maximum turnover of 2 million Euros and a maximum balance sheet of a total of 2 million Euros. While small enterprises are enterprises with a maximum number of 50 employees, a maximum turnover of 10 million Euros and a maximum balance sheet of a total of 10 million Euro".
Many small and medium enterprises are relatively new businesses and they aim for rapid growth. These companies are not particular to any one sector; there are very few sectors in which these companies cannot thrive. But by their very nature, small and medium enterprises are less likely to have individual departments for every function of the business than the bigger ones. Because of this, employees are usually expected to work variety of tasks other than their job description and sometimes they may be asked to make decisions outside of their particular area of expertise.
RATIONALE
This research look deep into the small hotel industry to find out the extent of the use of Internet and E-commerce in their business, its benefits and drawbacks as well as to develop an understanding on how it helped these small organizations with limited resources to survive and grow in this current competitive environment. With the advent of new information and communication, small and medium-sized enterprises, are presented with a window of opportunity to optimize the use of their resources, via the Internet. The use of the Internet by Small and Medium Enterprises (SME's) could provide an opportunity for faster growth and advancement with limited resources. Advancement may be measured in terms of increasing growth rates and market share, as well as reducing costs. In order to make use of the possibilities behind the introduction of innovative technologies, SME's are expected to reassess conventional ways of doing business in order to benefit from the new technology Internet has provided an access to users from all over the world to do business online providing an excellent opportunity and medium to interact with more customers. Internet usage is growing rapidly and E-commerce is becoming more and more popular with time and many companies have moved from traditional way of doing business to the new online businesses.
The tourism industry is one of the main industries that had been drastically affected by Internet technologies. Today, at the click of a button, tourists can search thousands of potential destinations and price packages from the comfort of their own home or work place. In 1999,
52.2 million Vacationers used the Internet to plan their travel and 27 million customers actually purchased a travel product online (World Tourism Organization, no date). Electronic commerce revenues in the tourism industry amounted to 7 billion US dollars in 1999 and reached an estimated 30 billion US dollars in 2003, According to the June edition of theUNWTO World Tourism Barometerinternational tourism Destinations worldwide recorded a total of 247 million international tourist arrivals in the first four months of 2009, and all these figures improved with time and today it is only second to software, hardware, books and music when it comes to frequency of products purchased online. This implies that as the net spending of consumers grows, so will online sales of tourism products. The SME sector in UK is contributing a large amount to the country economy there are more than 12000 SME's registered in UK using electronic data interface in their business but there are problems associated with the use of technology in terms of knowledge experience skills resources etc and all these problems should be addressed to survive in this competitive environment.
E-commerce brings a lot of advantages and disadvantages to small business and this research is an attempt to understand and learn in more depth about the effects of E-commerce on small and medium sized hotels in UK. The researcher will be looking at how small and medium sized hotels are dealing to incorporate ecommerce in their business and how is this improving the customer experience.
In this research participant observation is done by the researcher at Hylands hotel Coventry (www.Hylandshotel.com) and Charde Guest House Birmingham (www.chardebnb.com) to observe and to analyze the environment to find the answers for the research, detailed interviews with the staff and management were carried out along with the questionnaires for the collection of primary data guests were also interviewed and a questionnaire was distributed among some of them, this provided an excellent opportunity to the researcher in getting more relevant and in-depth information. Following is the organizational background where the researcher performed ethnography for the collection of primary data and to find answers to the research questions
Organizational Background
The Hylands hotel in Coventry is a listed building which was built in late 1800's as a house by Sir Wills famed for cigarette maker Wills International , the building was acquired as a hotel in the late 1950's and was named Hyland's hotel run by Securico hotels famous security transit company. the hotel was renovated and a huge expansion plan was implemented in 1982 and two new floors were made and the total number of rooms became 70, Hylands hotel is a popular hotel in Coventry and it offers a range of services to its customers such as restaurant, bar, wireless WIFI, pool table and provides banquet services to companies for their seminars and conferences. It has three halls for this purpose beside these the hotel also provides services for private parties wedding or other such type of activities. The cost at Hylands hotel is comparatively low with good quality standards safety and hygiene. It is given a three star status.
The hotel was taken over by Euphoria hotels in June 2003, at the time of acquisition the overall performance of the hotel was bad and it was hardly surviving, the new management after 2003 made a lot of changes and developed new strategies many managerial changes were made cost cut downs were done by reducing the number of employees and hiring of part time employees. A huge amount is spent on renovation of rooms and hotel interior. Technology advancement also made a great impact and development of the hotels website and online bookings made a good impact on the number of guests in the hotel.
The new General Manager worked really hard and is successful in his efforts as the hotel's profit is growing with the annual turnover of 700k a year and it is again gaining popularity among its competitors. The hotel currently has 60 bedrooms and 3 conference suites, indoor sports and recreational area, 4 main bars and the main Restaurant. All modern day amenities that you would expect from an AA 3 star rated hotel (hotel sources) are present including but not limited to wifi and broadband, business copy centre and free off street car parking.
The Hylands Hotel is located within a 3 minute walk from the Main Line Coventry Train Station, served by the M42, M6 and M1 all within a 20 minute drive. Its proximity to the motorway connections, coupled with its geographical location being Warwickshire, in the heart of the Midlands, puts it in an ideal logistic position. The Hotel is served by 2 airports both within a 20 minute drive, Coventry Airport and Birmingham international. The Hylands has also been part of the Best Western Chain of Hotels (www.bestwestern.co.UK ). It is an American outfit which has now expanded on a truly international scale and is currently the World's biggest chain of independent Hotels. The hotel currently employees 25 staff, all local, some who have been with the hotel for over 20 years. The Hylands is a name well received and known by Coventry Local's as a pioneer and trend setter of fashionable Victorian dinning in Coventry.
The hotel mainly serves the business class, many of which are SME owner operators, Sales and support staff. International visitors are seasonal who are visiting and exhibiting at the NEC and NIA national auditoriums. Coventry Cathedral is also a main Tourist attraction along with Kenilworth and Warwick Castles and Royal Leamington Spa.
Charde Guest House
Charde guest house is a small family owned business located near national exhibition centre Birmingham. The guest house offer bed and breakfast and has 12 rooms with three employees, the business recently made their website http://chardebnb.com/ in July 2009.charde guest house has guests from National exhibition center and from Birmingham airport,charde is a good organization for the research because unlike Hylands it has adopted internet and ecommerce in their business very recently so it will be more appropriate to see the effects that internet has bought on the organization
Aims and Objectives
The aim of this research is to explore the importance and influence of e-commerce on growth and profitability of small and medium enterprises specifically the small hotel industry. The current age is the age of information and technology and Internet has become a vital part of our everyday life it has influenced our way of life and it also changed the traditional approaches of conducting business and almost everyone uses Internet for to get different services such as selling buying and other online transactions and the researcher aim is to study all these factors to evaluate the effects Internet has on SME.
This research will investigate to which extent the small and medium sized hotels in UK are using E-commerce in their business and to identify the barriers to the adoption of ecommerce along with the identification of advantages and disadvantages of e-commerce to their business. The objectives of the research are as following:
- To critically evaluate the relevant literature on small firms and the importance and the usage of Internet.
- To understand the problems faced by small hotels and the barriers to the use of Internet and ecommerce in their business through articles, newspapers interviews surveys and through participant observation.
- To gain specific knowledge of Internet usage for small hotels in business through participant observation interviews publications and company information.
- To provide recommendations for improvement the usage of Internet as a competitive tool.
- To identify, advantages and disadvantages of e-commerce to SME hotels in the UK.
Dissertation Summary
In chapter 1 we have discussed E-Commerce and SME's briefly in the context of dissertation research topic, as this research is about the effects of E-Commerce on SME's, further in this research researcher is going to discuss all these topics i.e. E-Commerce, SME's role in UK with the context of the research and to sketch a background and to lay foundation for research methodology and for data collection all the topics covered in chapter two will help in gathering research data and also help to answer research questions.
Literature Review
E-commerce
E-commerce is the buying and selling of goods and services on the Internet, especially the World Wide Web. In practice, this term and a newer term, e-business, are often used interchangeably.
The current age is the age of science, technology and the Internet, electronic commerce have made the world market a smaller place to trade in it has created a universal platform for buying and selling which has resulted in reduced transaction cost and faster transaction time the Internet has opened many possibilities of organizing and running online businesses e-commerce has its benefits and short comings according Fuatai and Janet (2004) "despite all the hype surrounding the electronic commerce and recent failure of many dot com companies it does present real opportunities to small interprenures in small countries".
Classification of e-commerce
Ecommerce can be classified in the following categories:
Electronic market:
It refers to buying and selling goods and services where the business center is not a physical building but rather a network based location at an electronic market base. All the transactions such as information request transfer of money between banks, payment acknowledgement, service delivery, purchase delivery, purchase acknowledgement etc.
Inter organizational systems
The objective of inter organizational system is efficient information and transaction processes a typical IOS includes a company and its suppliers or customers, buyer and sellers exchange information and business transaction over communication network such as EDI, extranet, electronic form, channel databases and electronic funds transfer.
Customer services
E-commerce plays a dual role in customer service it provide customer services to processes that are done off line as well as it provide help to on line transactions. It is a series of activities to help customers to resolve problems encountered at any stage of purchasing process and also to enhance the level of customer satisfaction the customer service include the following
- To provide technical information to customer
- To provide search and comparison capabilities
- To answer customer enquiries
- To allow customer to track order status
- To allow customer to place an online order
E-Commerce Applications
Inter organizational e-commerce
E-commerce can be applied in the following INTER organizational business
Supplier management:
Electronic applications can help the companies by facilitating business partnership by reducing purchase orders, processing cost and cycle times it also reduces the number of suppliers by increasing the number of purchase orders handled with fewer people.
Inventory management
Through electronic applications business can improve auditing capabilities and also helps in reduction of inventory levels improved inventory and elimination of out of stock occurrences businesses can also track their documents and information transmitted electronically, can make sure that they are received.
Distribution management:
Electronic applications can enable better resource management by ensuring the accuracy of data it facilitates the transmission of documents such as purchase orders shipping documents, bills, claims, etc
Channel management:
By linking of production related information electronically with reseller networks and distributors around the world can save hundreds of labor hour and can ensure accurate information sharing.
Payment management:
Electronic payments reduces errors and increases the speed of transaction and lowers transaction fees and cost by linking companies with suppliers and distributors electronically enables payments to be sent and received electronically.
Intra organizational commerce
It helps the company to maintain critical relationships to delivering customer value it can be applied as followings
Work group communication:
It helps the manager to communicate with the employees more efficiently and effectively through emails video conferencing resulting in well informed work environment.
Electronic publishing:
It is used by the companies to publish and organize their information regarding product specification, meeting minutes, office memos etc it helps the company by faster delivery of information and elimination of printing cost and other overheads.
TYPES OF TRANSACTION:
- Business to business: Most of E-commerce today is of this type. It includes the IOS transactions and electronic market transactions between organisations
- Business to customer: These are retailing transactions with individual shoppers.
- Customer to customer: , consumers sell directly to consumers
- Customer to business: consumers sell directly to organisations
CHALLENGES TO E COMERCE:
The growth of Internet and its users offer great deal of advantages to ecommerce and businesses but there are some challenges which are discussed below
Security and privacy:
The most important issue with online businesses is security and privacy of data. Important information such as credit card details, personal information, business information, business plans can easily be accessed and tracked by hackers. This is the major threat to the growth of businesses online.
Legal issues:
As Internet is used by individuals from different countries and every country has its own legal system. In case of legal conflict it becomes very complicated to address the conflict legally.
UN successful business models:
As the innovation in technology is very rapid because of this it becomes too expensive for the companies to keep up with these rapid changes and to stay up to date.
Channel conflicts:
Companies most of the time use multiple channels online as well as traditional channels to sell their products and services. It becomes extremely important to maintain a balance between these different channels because imbalance between these channels can lead to very big problems.
SME
The definition of an SME (small and medium enterprise) used by the South West Ventures Fund is a Business or company that:
Have fewer than 250 employees and has either
- annual turnover not exceeding 50 million (approximately ?24 million)
- An Annual balance sheet total not exceeding 27 million (approximately ?16 million); and 25% or more of the capital or the voting rights are not owned by one enterprise, or jointly by several enterprises falling outside this definition of an SME.
While most people know that SME stands for Small Medium and Enterprise, there was no clear cut definition of SME or how a company, entrepreneur or a business organization can be classified into SME category. This posed confusion especially when an entrepreneur is looking to get assistance from the SME related bodies and financial institutions.
Different agencies and bodies used various different parameters in deciding if a business entity falls under the SME group e.g. sales turnover, number of full time employees, paid up capital and so on.
That however changed in 2005, when the National SME Development Council announced the official and a standardized definition of SME. This definition is too used across various sectors, and adopted by the government ministries, agencies and financial institutions which are involved in the development program of the Small Medium and Enterprises (SMEs).
The definition of SME is based on two criteria, namely:
- The number of people the business is employing, or
- Annual sales turnover or revenue
The European Commission (2003) defines SME's as follows: "micro enterprises are enterprises with a maximum number of 10 employees, a maximum turnover of 2 million Euros and a maximum balance sheet of a total of 2 million Euros. While small enterprises are enterprises with a maximum number of 50 employees, a maximum turnover of 10 million Euros and a maximum balance sheet of a total of 10 million Euro.
SME AND E COMERCE:
The growth of Internet users have made the Internet a potential market for businesses Internet has become an effective medium for marketing and business it is the most effective media all over the world which makes it a compulsory channel to use for new market entrants.
According to website(http://www.ecommercejournal.com/tags/SME) A survey conducted among Net registry domain name customers and non-Net registry SMEs shows that online business will be experiencing a substantial growth throughout 2009. They already are more confident about their business prospects (46% versus 13%), are more likely to be planning expansion (57% versus 39%), are more likely to export (28% versus 15%), and are more likely to be earning more profit in 2009.
The major problem for small firms is to prove their identity in the market in competition with strong companies and existing small firms, Internet is an efficient way to do this and to let customers know that they are in the market the cost which comes with e-commerce is very reasonable for the market entry as small firms try to cut their cost and increase the investment in their businesses and that's what the e-commerce (Internet) does for them by providing great opportunities to small firms for their activities in the market no matter how big the market is e-commerce is the most efficient way to success for small firms in existing highly competitive market. Detailed benefits of e-commerce to SME's are summarized as follows:
- Innovative products, better services and exploring new market opportunities;
- Shift in value added and content components of what is made and sold;
- Changes to economies of scale and the traditional barriers and advantages of large enterprises;
- Untying work functions from specific locations and time constraints;
- Flattening and disaggregating of organizational structures;
- Scope for customization at low cost;
- Commercialization of in-house content and know-how.
SME's IN UK
From the above literature it could be rightly said that E-Commerce adoption is an essential business strategy for SME's to obtain competitive advantage.
New figures published today by the DTI's Small Business Service (SBS), show there was a net increase of around 200,000 firms operating in the UK in 2007 compared to the previous year equivalent to over 500 new businesses starting up every day.
The figures are the highest year on year increase in business numbers since the statistics were first collected in 1995.
The proportion of national turnover and employment generated by SMEs also increased from last year to its highest level in five years. They now account for 99.8 per cent of the business population, with an annual turnover of ?2.2 billion, and employ over 12.6 million people.
The overwhelming majority of SMEs are businesses with up to 49 employees, accounting for 99.2 per cent of last year's total. Some 26,000 medium-size companies - up to 249 employees - represented 0.6 per cent of the population and 6,000 enterprises with more than 250 workers made up the balance.
The smallest firms provided work for 46 per cent of the 21.7m-strong labour force and represented 52 per cent of the ?2,200 billion turnover generated by the 4m businesses.
Almost 3 million businesses were effectively one man bands, highlighting the growing trend towards self employment for everyone from IT professionals to plumbers as well as the increasing ease of working from home. But these 'micro businesses' still contributed ?178 billion to the UK economy.
Opportunities
"There are major opportunities for new entrepreneurs and small- to medium-sized businesses to flourish in the maturing of e-commerce" (Drew, 2003). The use of e-commerce has provided a variety of benefits for SME's as well as a number of potential opportunities. "The Internet is usually presented as an opportunity for smaller firms because it helps reduce transaction costs and level the playing field" (Evans and Wurster, 1997). The opportunities for SME's include expanding scope of marketing, wider and richer communication, reaching new market and reducing cost of operations and partnering with suppliers (Drew, 2003). According to a report conducted by Prerost (1998), there are variety of opportunities added to SME's, including efficiency and productivity for business process, the development of new market opportunity (B2C and B2B) as well s access to global market. Also, the e-commerce give SME's opportunity to exploit competitive and know how benefits as suggested by Tagliavini et al. (2001). Nevertheless, how to use e-commerce as an opportunity to SME's will depend on the industry and firm factor implied by Drew (2003). These influenced factors include: The smaller firm's technical and Internet knowledge; The rate at which the market is growing; The pace of innovation and change in the industry; The technical and Internet strengths of the larger competitors; The sources of competitive advantage for the smaller business; The strategic intent of the larger competitors; and The structure of the industry in which the firm competes.
Generally, the market, industry structure, and macro-environment will be the major influenced factors that decide e-commerce as an opportunity or threat for SME's. Therefore, although it is not doubt that e-commerce has provided a huge opportunity for SME's in the range of business activities, the external and internal factors must be considered strategically while adopting e-commerce. However, Tagliavini et al (2001) argued, "the real opportunity of E-Commerce adoption for SME's is still unclear"(p.211). The significant opportunity for SME's is to extend existing market to international market addressed by a number of authors (OECD, 1998; Webb and Sayer, 1998; Walczuch et al., 2000 and Tiessen et al., 2001). Tiessen (2001) remarks "the twin phenomena of globalization and e-commerce pose new challenges and provide competitive opportunities for large and small firms alike". It is an imperative opportunity for SME's to access the global market, as the one of the important feature of e-commerce is global reach as stated by Laudon (2001). Therefore, SME's are expecting the opportunity to extend existing market into globalization by using e-commerce. Undoubtedly, Internet has provided a chance for SME's to diminish the entry barrier and costs into global trading market as "electronic commerce offers companies the possibility to sell internationally, effectively removing constraints of time and location and substantially enhancing their competitiveness", and it is the most imperative opportunity for SME's to increase productivity and the capability to entry markets and discover business partners globally (OECD, 1998). Indeed, the reach of global market is an exciting opportunity for SME's to grow in terms of the size of company and competitive advantage. However, Jutla et al. (2002) proclaims that "globalization pressures arising from e-commerce operations often mean hat SME's have to acquire international trade knowledge". Publishing company's website in the Internet is simple but trading in the global market is not so simple task for any of the SME's. As Tetteh and Burn (2001) points out that "the challenge for SME's are complicated by the general lack of clearly defined frameworks for analysis of the entire processes of strategy building, implementation and management with aspect to the emergent global information economy". However, e-commerce truly provides the great opportunity for SME's to increase competence with lager firms in variety of business opportunities as well as an opportunity to extend trading geography. The various opportunities offered by e-commerce are the significant riving factors that encourage a firm to adopt e-commerce as its business operation.
Threats
Although the use of e-commerce has provided a huge opportunity for SME's in range of business activities, e-commerce might become a threat for SME's while trying to explore a variety of opportunity by using e-commerce. As Drew (2003) indicates there are a number of threats of e-commerce for SME's. These threats include increasing competition from larger firms as "the new medium allows larger firms to mimic the traditional strengths of SME's in serving niche markets, developing customer intimacy and exploiting local knowledge", and " for a regional firm, which previously may have had little local competition, may be faced with new threats from across the country or the globe" (Drew, 2003). In fact, small firms have less competitive advantage than larger firm as Davies and Garcia-Sierra (1999) points out SME's had fewer resources compared to larger firms. Meanwhile, a survey conducted by OECD (1998) found that "it is more difficult for SME's to reach the Benefits of e-commerce than for larger firms". This could be because SME's are having less resource than larger firms. Therefore, the opportunity provided by e-commerce might present in different result between SME's and larger firms. For SME's, e-commerce might present as a threat because of a lack of resource and a lack of essential knowledge of how to do business on line. E-Commerce provides opportunities and benefits for SME's but the new threats also come from using it.
SUMMARY:
In this chapter the researcher have discussed all the relevant literature about e commerce SME internet their importance and benefits along with the threats in more detail than it is in introduction, after explaining the literature the researcher will now start the data collection in order to answer the research question, research methodology is discussed before gathering data in chapter three and after explaining research methodology data collected through interviews and questionnaires is presented with analysis.
RESEARCH METHODOLOGY
In this chapter research methodology is discused along with data collection methods such as. Interviews questionnaires ethnography etc all the data gathered from different methods will be presented analyzed and demonstrated with the help of diagram and figures in this chapter, this data will help the researcher in making conclusion and recommendation.
Research Methodology
According to black and maylor "You need to identify and select your approach before you go any further in you're the process of research" (Black & Maylor, 2005, p.153)
A good research methodology is a general plan of how the researcher will go about answering the research questions considering the sources to collect data and the constraints that one might have (access to data, time, location and money, ethical issues etc). It should reflect the fact that the researcher has thought carefully about why a particular strategy has been employed. A collection of methodologies was used to carry out this research. Both primary and secondary research was carried out for this purpose. Primary research is research that is being carried out specifically to answer a particular research question. Primary research is carried out by the researcher himself/herself and is not based on others work. It is often termed as first hand research and observation. Few approaches to primary research are: focus groups, surveys, experiments, interviews etc. Primary research is much more expensive than secondary research. Secondary research is based on information gathered from studies previously performed by other researchers or other organizations. Secondary sources may vary from libraries, Web, books, publications, magazines and newspapers. Secondary research is cheaper than primary research; it's not as accurate, or as useful, as specific as primary research.
The first stage of the research comprised of collecting secondary data from the literature review. According to Sharp and Howard (1996), two major reasons exist for reviewing the literature. First, the preliminary search helps to generate and refine the research ideas. And secondly, a critical review is a part of the research process. Like most research projects, literature review was an early activity in this research. After the initial literature search, the researcher was able to redefine the parameters more precisely and undertake further searches, keeping in mind the research objective and goal. The literature review helped in developing a good understanding and insight into the previous research done on this topic and the trends that have emerged. The next stage of the research comprised of short listing of the Small firms where the survey had to be carried out. Companies which have an online presence as well as those which run business offline i.e. which operate on 'bricks and mortar' model were selected. The central idea of the research was to find out the overall e-business transition process of the Small firms who have already achieved it and others who are undergoing the change. Also the barriers to the adoption of e-commerce in small firms were identified.
In this research I have collected primary data through Participant Observation, Guest & Staff Survey interviews and Hotel Industry Publications.(According to Saunders) "Participant observation is where the researcher attempts to participate fully in the lives and activities of subjects and thus become a member of the group, organisation or community. This enables the researcher to share their experience by not merely observing what is happening but also feeling it (gill and Johnson, 1977:113)"
Saunders et al (2007) also explains that the researcher can implement different strategy for conducting the research,he also said that the researcher must emphasis the suitability and efficiency of research before adopting the research strategy instead of focusing on previous performance of particular research.
Saunders also provides the list of approaches of pursuing the research strategies which are as following:
- Experiment
- Surveys
- Grounded Theory
- Ethnography
- Action research
- Exploratory, descriptive and explanatory studies
- Cross-sectional and longitudinal studies
During the course of my observational research, I spent 3 nights at the Hylands Hotel as a guest, thereby experiencing every aspect of a customer's experience, Value for Money. At the same time I also spent my time attached with the Key Management figures, specially the General Manager and the Front House manager to evaluate and assess their dealings with the day to day issues that arise in this fast moving Industry.
A survey was carried out and a set of questionnaire was also prepared to collect primary data. Bell (1993) says that surveys can provide answers to questions like What, Where, When, And How. It tries to elaborate the problems of 'representativeness' from other approaches like case studies or most of the qualitative approaches. This approach can be termed as fact finding mission and may contribute little towards the development of a hypotheses or shaping theory. The results from the survey can definitely be used to test a hypotheses or theory. The data here is primarily quantitative but may also be qualitative in nature as it represents peoples view about an issue. Questionnaires are generally used for the purpose of data collection. The different distribution techniques as described by Hussey and Hussey (1997) were followed. The questionnaires were circulated to the employees and consumers through Post, Telephone, face-to-face, Group distribution, email distribution and individual distribution. Hussey and Hussey (1997) identify some important factors to be considered while using questionnaire.
The Questionnaires (see appendix) filled out by staff members and some very loyal and honest customers have been a key insight into how the hotel, its operations and management are portrayed to the other side. Some key comments are now being used as the inspiration and initiative required improving or introducing new procedures and services as a result.
The next stage of data collection will consist of in-depth interviews with the representatives as well as employees and customers they will be Structured interviews structured interviews can be used for a wide range of purposes, depending on the questions used and the manner in which participants are selected. They can provide valuable insight into students' understanding (or misunderstanding) of the course content, document students' course-related knowledge and skills either at specific points in time (e.g., before and after instruction) or longitudinally, or provide information on students' perceptions of the pedagogical or technological methods used. (http://www.sociology.org.UK/methfi.pdf)
Semi structured interviews this technique is used to collect qualitative data by setting up a situation (the interview) that allows the Respondent the time and scope to talk about their opinions on a particular subject. The focus of the interview is decided by the researcher and there may be areas the researcher is interested in exploring. (http://www.sociology.org.UK/methfi.pdf)
Unstructured interviews Interview without any set format but in which the interviewer may have some key questions formulated in advance. Unstructured interviews allow questions based on the interviewee's responses and proceeds like a friendly, non-threatening conversation. However, because each interviewee is asked a different series of questions, this style lacks the reliability and precision of a structured interview. Also called non-directive interview (http://www.sociology.org.UK/methfi.pdf).
Organizational survey Analysis
INTRODUCTION:
This chapter explores the analysis of findings of this research and their link with literature review in order to achieve the particular aim and objectives. As the purpose of this research is to find out the effects of internet on small and medium enterprises specially the small and medium size hotels in uk so the researcher conducted interviews and filled self administered questionnaire to collect the relevant data to find out the research questions.
THE HYLANDS HOTEL
After having detailed discussions and semi structured interviews and participant observation following data is obtained which is analyzed in order to answer the research questions.
Mr. Omer bin Malik the general manager of the Hylands hotel was kind enough to give time to the researcher and to answer different questions from the researcher in order to complete this research.
His views and experience helped the researcher a lot in completing the research.
Following data is obtained from the General Manager of the Hylands hotel which is presented below.
Q1: what is the size of the organization?
In response to this question the hotel has total of twenty staff with seven full time and 13 part time employees beside other outsourced staff like housekeeping and IT.
Q2 how many computers does the organization have?
The organization has 10 fully networked computers with full internet connectivity.
Q3What is the annual turnover of the business?
The annual turnover of the business is around 700 thousand pounds per year.
Q4 How long have you been using internet and e commerce in your business?
The Hylands hotel is using internet more than five years they have their own website.
Q5 what services do you offer online?
The website offers important information about the hotel the room charges email correspondence directions and picture gallery of different views of the hotel.
Q6 do you use any other online facility/service for your business/
The hotel uses third party websites for taking bookings on line such as booking.com, laterooms.com and pay 8 to 15 % commission on booking that come through these websites.
Q7does your business has an IT department?
The answer for this question is no the hotel has hired the services of IT consultant for updating and running of the website and other online and IT issues the management is dependent on the knowledge and services of these consultants to stay up to date with the technological advancement and changes.
Q8 what is the use of IT and computers in your organization?
The use of IT is very essential and important for the business as all the record keeping bookings correspondence with the gussets and suppliers hotel management software accounting software all are used by the business and are essential for the growth of the business.
Q9 with the adoption of internet and It to your business have you trained your staff?
Yes, training is given to all the staff and those who were not able to get train with these advancement eventually lost their jobs and now it literacy is must for the candidates to join the organization.
Q10 what is the cost of IT and web presence to the business.
The cost for online business is 30,000 pounds per year.
Q11 what percentage of the total sales is achieved online?
About 70 % of the total sales come from bookings online.
Q12 what are the factors that influenced the business to adopt internet and e commerce in the business?
In response to this question the general manager replied "we were forced to adopt internet in our business , it was not by choice it was must" as after the advent of internet most of the business went online and in order to stay in the market and to achieve the competitive edge the business had to adopt internet strategy in their business to attract more customers and to expand business to virtually all over the world thus maximizing the value of the firm as well as stay competitive and to increase profits.
Q13 what benefits did internet bought to your business?
The biggest benefit that internet has bought to the business is that it has made our business international we are dealing with customers from all over the world secondly our sales and marketing department are no longer there they are replaced by our website and the company no more have these two departments which save a prominent amount of expenses.
Q14 As the customers are sometime concerned about providing their data and information on line? What steps have you taken to ensure their secrecy?
For this purpose there is an act passed by the government of UK known as data protection act and at Hylands we fully comply and follow the act to ensure the secrecy and confidentiality of the information of our guests.
Q15what challenges do face after the adoption of internet?
Internet has empowered our customers and most of the customers before booking accommodation check our reviews online left by our previous customers and if they find anything bad about the hotel services or any other thing we lose business so in order to have our share in the market and sustain our position we need to fully satisfy our customers now because even one customer can cause our business a lot of trouble due the internet.
Q16 Do you think of doing business without internet?
The answer to this question is a very straight forward no as internet has become a common medium used for communication between the customers and hotel as well as between the suppliers and inter organizational communications so without internet the business will seize.
DATA COLECTED FROM STAFF
From informal and self administered questionnaire from the staff of the Hylands hotel it is found that the staff is happy and satisfied with the adoption of internet technology as they see it as a modern tool of buissiness and it enhance their skills and experience of work the only challenge that the staff faced is the awareness and power of customer which increased enourmously with the adoption of internet and now the staff work even harder to provide better services to their customers to enhance their customer experience as an unsatisfied customer can bring a lot of trouble to the buissiens ny writing bad reviews and comments about the hotel or staff which in return will effect the business as well as the good will of the staff.
ORGANIZATIONAL ANALYSIS OF CHARDE GUEST HOUSE:
On 25th of November 2009 the researcher met the manager of Charde guest house (B&B) Ms Nosheen Qadir and conducted an un structured interview to find answers to the research questions and to record her views and comments about the effects of the internet on her business
Charde is a small family owned and run business recently taken over by the current management, before the take over charde had no website no contracts with 3rd party online bookers and hence no online presence.
After the take over the first step the new management took was to develop a website for the guest house and made contracts with online booking websites such as booking.com and laterooms.com, the guest house website www.chardebnb.com offers online booking email correspondence directions etc.
In the interview and informal discussion with the management of charde guest house all questions related to the research were asked and investigated as charde is a good source and study to evaluate the effects of internet on small businesses like charde and as it has recently adopted the ecommerce and internet in their business so it is easy to observe and analyze its effects.
From the interviews and detailed discussion with the management showed that e commerce has benefited their organization to a very large extent as before with no on line presence no website all the customers were attracted by word of mouth or walk in customers and the average occupancy of the guest was not more the 60 % but with the introduction of e commerce and online booking through their own website and through third party booking websites the average occupancy is raised to 90 % with almost full house on weekends where the management usually decline bookings and incoming walk in customers. This is a very positive sign of internet on this business but again it has made the management more quality conscious and customer experience has become a vital element of the business, the cost of adopting internet in the business is much lower than the profits it has made for the business, although the use of internet and e commerce is not fully implemented and utilized by charde guest house but the management is fully6 committed and interested in implementation of the new technologies in the business.
Following data is the summary of the data received from the management of Charde guest house the organization is a small organization with three permanent employees offering 12 rooms family and single rooms with rent starting from 29 pound per person per night has a turnover of around 60,000 pounds per year, the average occupancy before the online presence website and third party contracts was less than 60 % but it is now increased to 90 % ,the company pays 5 to 15 % of commission to different websites from where the booking came. The guest house still take cash and has no online transaction facility yet but the management is planning to get these services as well.
The management is very much satisfied and dependent on internet for the growth and progress of their buissiness. According to the management of Charde guest house more than 70 % of their business is because of internet and ecommerce.
DATA COLLECTED FROM STAFF SURVEY OF CHARDE GUEST HOUISE
Staff of the charde guest house were questioned and were allowed to express there experience with internet and the data received showed that they are excited about these changes and they work with more devotion than before because the guest house becomes more busy after the introduction of online bookings which enhances the staff experience and their interpersonal growth,small business like charde guest house is even more dependent on internet as they have limited resources in terms of marketing and sales specially in attracting customers and internet provides them an excellent medium where the management of charde can address and access customers from all over the world which will help the organization to grow and excel in today's competitive environment.
Customer questionnaire analysis
The questionnaire designed for this research was sent to about 70 people in UK with the description on how to answer the questions, a follow up email was sent after ten days to the non responsive individuals,50 responses were received, the questionnaire was distributed among the people from different ways of life including students tourists business professionals etc, the questionnaire was sent through emails as well as self administered out of these 50 respondent 20 were females and 30 were males all of them between the age of 25 and 40.
The questions were aimed at answering research questions in order to analyze the effects of internet on hotel sector, from the data gathered through questionnaires and surveys following analysis are done
Q1 How long have you been using internet
Q2 How often do you use internet
Q3 How secure and confident do you feel when using internet for e commerce
These questions were aimed to find out the extent of the use of internet and to evaluate the feeling of the users using internet, in response to the above questions data shows that there is a significant increase in the number of internet users as shown in the figure below 60% of the responders use internet for more than five years 30% use internet for three years and 10% used internet for less than three years 90% of users use internet once a day for different purposes and 70 % of users feel confident and secure while using internet
ANALYSIS:
Based on the data collected through different methods following analysis is done which is as following
From the customer questionnaire the data collected showed that the internet usage has increased tremendously during last ten years and electronic buissines and online transactions have become a popular way of doing business now adays as data received from first three question in the customer questionnaire shows that majority of the respondents are using internet for more than five years and 90 % of them use internet for buying/selling every week.
Question number 4 revealled that majority of the respondents use internert for booking travel and accommodation services which clearly shows the importance of the internet and ecommerce to the hotel industry
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