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To what extent are established brands best placed to make the most of the growth opportunities of e-commerce?

E-commerce refers to commercial transactions that are conducted electronically on the Internet. There are many arguments that explain if established brands are best placed to make the most of the growth opportunities presented by e-commerce such as having the access to finance. However, some arguments suggest that it is not just established brands that can take advantage of the growth opportunities because of other e-commerce platforms such as Just Eat.

Firstly, one reason why established brands have a head start in order to make the most out of the growth opportunities presented by e-commerce is because they have the access to the finance available to involve themselves in the e-commerce world. These established brands have the capital to start up, develop or even improve their own e-commerce platforms. These firms, for example can choose to improve their distribution and logistics network by investing in more capital and high skilled workers. This shows that the business is able to increase the quality of their delivery times and returns policy. This would lead to the satisfaction of customers as expectations for delivery times as well as returns have been more demanding, for example, having free returns rather than having to pay to send it back. An improved distribution and logistics network could lead to the business being able to absorb the costs if a customer wanted to return the product. This suggests that customers are more likely to make repeat purchases because there is no cost of returning the product if it doesn’t suit them. For example, Sainsbury’s had offered £1.4bn to buy and control Argos. It argues that buying Argos would help to increase its sales growth and improve its distribution and logistics network. According to figures from Kantar Worldpanel, Sainsbury’s were able to benefit from a sales growth of 1.2% therefore they would receive...