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Chapter 1: assessing the financial and competitive opportunity

Authored by: Gregory Antrobus, J.C. Williams Group

Introduction

When a company embarks on a new initiative or program, a “due diligence” process is undertaken to assess the opportunity associated with that initiative. In this chapter, our intent is to provide you, the retailer, with a set of inputs to assist with that process.

To provide direction in building your business case for the online initiative, we will delve into the following topics:

Sub-topics:

  • Sizing the market

  • The competitive assessment

  • Developing a forecast

Sizing the Market

As a retailer, two important questions you will need to address as you undertake the “due diligence” process are as follows:

  • 1.

    What is the financial opportunity?; and

  • 2.

    What does the competitive environment look like?

To assess the financial opportunity, a first step will be to determine the size of the online market and the potential dollars that are available to you. One approach that can be used to ascertain the size of the Canadian e-commerce market is outlined in Table 1.1.

Table 1.1: Estimating the E-commerce Market in Canada

Canadian population Percent of Canadian Population online Canadian population online Percent of Canadians who shop online Estimated online buyer population

1,000 55% 550 40% 220

The example provides a quick and simple way of determining the number of Canadians who shop online. Please note that the inputs for this calculation will be dependent on when you decide to launch your cross-border e-commerce program.

Visa e-commerce cross-border handbook for U.S. retailers

Copyright 2010 Visa. All rights reserved.

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