PROJECT REPORT

ON

HOMESHOP 18
Submitted in partial fulfilment of the requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
To
Guru Gobind Singh Indraprastha University, Delhi

BATCH: 2014-2016
Under the Guidance of
Dr.Susheel Chabra

Submitted by
Mohit Kumar
Aditi
Akshit sharma
Palak gupta
Sugandh Agarwal

PERIYAR MANAGEMENT AND COMPUTER COLLEGE

Periyar Centre, FC33, Plot No. 1&2, Institutional Area, Jasola, New Delhi 110025

STUDENTS UNDERTAKING

We hereby certify that this is our original work and it has never been submitted
elsewhere.

Project Guide:

Candidates signature

Dr.Susheel chabra

Place: New Delhi

Date:

TABLE OF CONTENTS

CHAPTER

PARTICULARS

PAGE
NO.

STUDENT UNDERTAKING
ACKNOWLEDGEMENT
1.

INTRODUCTION

2.

STRUCTURE OF HOMESHOP 18

E-COMMERCE MODELS

4.

66

BUSINESS MODELS

REVENUE MODELS

ELECTRONIC PAYMENT SYSTEM

67

INFRASTRUCTURE AND MECHANISM

5.

PORTER'S FIVE COMPETITIVE FORCES MODEL

68-70

ACKNOWLEDGEMENT
We would like to take an opportunity to thank all the people who helped us in
collecting necessary information and making the project. We are grateful to all
of them for their time, energy and wisdom .Getting a project ready requires the
work and effort of many people. We would like to thank all those who have
contributed in completing this project. Specially, We would like to send our
sincere thanks to Dr.Susheel Chabra for his helpful hand in the completion of
our project.

About HomeShop18:
HomeShop18 (HS18) is a new venture from the Network18. HS18 is a
nationally televised home shopping service, selling credible brands through
interactive electronic media, primarily through cable TV and internet.
It has a team of over 3500 people spread across 30 bureau locations (3 of which
are overseas). It has established 220,000 sq. ft. of fully integrated broadcast &
other infrastructure, including state-of-the-art hubs in Mumbai and Delhi.
HomeShop18 is the Groups online & on-air retail marketing and distribution
venture which has launched Indias first 24 hour Home Shopping TV channel on
April 9 08.
HomeShop18 has partnered with the best brand owners, such as Apple,
Motorola, Philips, Kaya, Godrej, Reebok and many more
A 24-hour call centre also allows customers to call in and book orders as per
their convenience. It will deliver products to over 3000 cities free of cost.
Network18 is one of India's leading full play media conglomerate with interests
in television, print, internet, filmed entertainment, mobile content and allied
businesses.
Network18 operates Indias leading business news television channels, CNBCTV18 and CNBC Awaaz.

 Network18 operates in the general news and entertainment space with leading
general news channels CNN-IBN and IBN7 and has launched IBN Lokmat, a
Marathi news channel in partnership with the Lokmat group.
It also runs one of Indias largest Internet players - Web18, as well as one of
Indias leading real time financial information and news terminals Newswire18

Overview of homeshop 18 site :

What are the top selling products at Homeshop18?

These are the broad categories that are top selling:
Consumer Electronics : Camera [Homeshop18 claims that 5% of camera
sold in India are thru HS18 channel], Mobile Phone and Microwave
Ovens.
Home Appliances
Jewelry, and
Home & Kitchen products
Jewelry:

HOME APPLIANCES:

WHY BUY FROM US ?

Convenience provided by HomeShop18:

Anytime shopping: especially convenient to working couples and the
working women who are short on time, and the ever growing number of
BPO employees.

 Armchair shopping: delivered at doorstep across 3,000 cities with an

average timeframe of 7 days from order to doorstep delivery.
Easy payment options.
Free home delivery.
15 Days Money Back Guarantee.

PRODUCT LINE :
Electronics & Computing
Cameras & Mobiles
Kids & Toys
Jewellery
Watches
Fashion & Accessories
Health & beauty
Home & Kitchen
House Hold Appliances
Books
Movies & Music

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 Flowers

key statistics regarding Homeshop18s userbase

1.3mn customers
18% are repeat customers.
New transaction every 13 seconds.
Run-rate of Rs. 1 crore a day.

STRUCTURE OF HOMESHOP 18:

The structure of home shop 18 starts from vendors dealing with channel promotion and
finally reaches to the customer.it uses it backbone to support the various activities to be
carried down

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MIS AT HOMESHOP18
There is one Centralized database warehouse. However the MIS is
implemented on a departmental basis. There are some departments which
might need MIS based on their functionality and their role.
Sourcing Team has to help themselves to analyse the historical data and
gather the micro information. Here departmental MIS come in handy as
each department has different information decision making tool.
Using the MIS Reports, rare information is generated.
Information is accessed by different employees at varying frequency.
Access Control enabled to protect the privacy of the data.
Several important information like orders to be placed, time-range, and
place etc can be generated through the MIS.
There is access level control given to the employees depending on need
basis (hourly, monthly) and nature of work so as to not overload the
system.
Reports -on- demand can be also generated and passed on as requested.
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 Special one-off Reports need to be created. The requirements and

criticality are understood and the reports are pulled-off and send to the
required team.
Managers are by-default given admin access.
There is a provision for Custom Build and Automated Reports and
Dashboards.
There are two teams who look after the maintenance of the MIS
Functional IT Team and Central IT Team.
Functional IT Team maintains the IS pertaining to their functionality and
the Central Team looks after stuffs like access-control, connectivity,
server etc.
The SLA for providing the reports is 1.7 Days.
There is a stand-alone custom build MIS tool that runs on Intranet. The
information is securely transmitted through https protocol.
MIS provides lot of useful information like Vendor Management,
procurement of the inventory, grading system and the functioning of the
different departments.

MIS MODULES :
MIS for product which are ready to air.
MIS for airing slots.
MIS for Customers to have the customer base.
MIS for Contact Center how many people contacted and information
related to calls.

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 MIS related to deliverydifferent modes used were cash, advance

payment and CC payment.
MIS for Sales and Margin.
MIS for Dashboard for leadership and forecasting.
ARCHITECTURAL DIAGRAM OF HOMESHOP18 CONSISTING
OF LAN/WAN/INTRANET/EXTRANET, EDI, VALUE CHAIN, WEB
BASED TOOLS INCLUDE IN WEB SERVER & SOFTWARE

Architectural Diagram

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VPN Diagram

AWS Architecture Center

The AWS Architecture Center is designed to provide you with the necessary guidance and
best practices to build highly scalable and reliable applications in the AWS Cloud. These
resources will help you understand the AWS platform, its services and features, and will
provide architectural guidance for design and implementation of systems that run on the AWS
infrastructure.

AWS Reference Architectures

The flexibility of AWS allows you to design your application architectures the way you like.
AWS Reference Architecture Datasheets provide you with the architectural guidance you
need in order to build an application that takes full advantage of the AWS cloud. Each
datasheet includes a visual representation of the architecture and basic description of how
each service is used.

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E-Commerce Models
1.BUSINESS MODELS:
Business-to-Business (B2B) Model
The B2B model involves electronic transactions for ordering, purchasing, as well
as other administrative tasks between houses. It includes trading goods, such as
business subscriptions, professional services, manufacturing, and wholesale
dealings. Sometimes in the B2B model, business may exist between virtual
companies, neither of which may have any physical existence. In such cases,
business is conducted only through the Internet.

The advantages of the B2B model are:

It can efficiently maintain the movement of the supply chain and the
manufacturing and procuring processes.
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 It can automate corporate processes to deliver the right products and services
quickly and cost-effectively. The B2B model is predicted to become the largest
value sector of the industry within a few years. This is said to be the fastest
growing sector of e-commerce.

Business-to-Consumer (B2C) Model

The B2C model involves transactions between business organizations and
consumers. It applies to any business organization that sells its products or
services to consumers over the Internet. These sites display product information
in an online catalog and store it in a database. The B2C model also includes
services online banking, travel services, and health information.

Storefront Model:
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Storefront model enables merchants to sell products on the Web

An e-commerce storefront should include:
Convenience and Simplified Process
Online catalog of products
Order processing
Secure payment

Shopping Cart Technology

Shopping Cart
An order-processing technology allowing customers to
accumulate lists of items they wish to buy as they continue to
shop
Shopping cart is supported by

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 Product catalog
Merchant server
Database technology
Combine a number of purchasing methods to give customers a wide
array of options

2. Revenue models :
Revenue model is a description of how the organization will earn revenue, produce profits,
and produce a superior return on invested capital.
The major revenue models are:
Sales revenue model: A company gets the revenue by selling goods, information or services.

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Subscription revenue model: A company charges a subscription fee for the users that access
to the content and services offered.

Transaction fee revenue model: A company receives a commission for enabling or

executing a transaction. It is based on the volume of transactions made.
Advertising revenue model: A company provides a forum for advertisements and receives
fees from the companies that advertise their products.

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ADVERTISEMENT REVENUE MODEL

ELECTRONIC PAYMENT SYSTEM INFRASTRUCTURE AND

MECHANISM
Electronic Payment
Electronic Payment is a financial exchange that takes place online between buyers and
sellers. The content of this exchange is usually some form of digital financial instrument
(such as encrypted credit card numbers, electronic cheques or digital cash) that is backed by a
bank or an intermediary, or by a legal tender.
The various factors that have leaded the financial institutions to make use of electronic
payments are:
Decreasing technology cost- The technology used in the networks is decreasing day by day,
which is evident from the fact that computers are now dirt-cheap and Internet is becoming
free almost everywhere in the world.
Reduced operational and processing cost- Due to reduced technology cost the processing
cost of various commerce activities becomes very less. A very simple reason to prove this is
the fact that in electronic transactions we save both paper and time.
Increasing online commerce- The above two factors have lead many institutions to go
online and many others are following them.
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1. We began E-Commerce with EDI; this was primarily for large business houses not for the
common man. Many new technologies, innovations have lead to use of E-Commerce for the
common man also. We will now briefly enumerate these innovations based on whom they

affected:
Affecting the consumers: Credit cards, Debit Cards, ATMs (Automated Teller Machines),

stored value cards, E-Banking.

Enabling online commerce: Digital Cash, E-Cash, Smart cards (or Electronic Purse) and

encrypted Credit cards.

Affecting Companies: The payment mechanisms that a bank provides to a company have
changed drastically. The Company can now directly deposit money into its employees bank
account. These transfers are done through Automated Transfer Houses.

2. There are also many problems with the traditional payment systems that are leading to its

fade out. Some of them are enumerated below:

Lack of Convenience: Traditional payment systems require the consumer to either send
paper cheques by snail-mail or require him/her to physically come over and sign papers

before performing a transaction. This may lead to annoying circumstances sometimes.

Lack of Security: This is because the consumer has to send all confidential data on a paper,

which is not encrypted, that too by post where it may be read by anyone.
Lack of Coverage: When we talk in terms of current businesses, they span many countries or
states. These business houses need faster transactions everywhere. This is not possible
without the bank having branch near all of the companies offices. This statement is self-

explanatory.
Lack of Eligibility: Not all potential buyers may have a bank account.
Lack of support for micro-transactions: Many transactions done on the Internet are of very
low cost though they involve data flow between two entities in two countries. The same if
done on paper may not be feasible at all.

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E-Payment System

Types of E-Payment System

Electronic Tokens- An electronic token is a digital analog of various forms of payment

backed by a bank or financial institution. There are two types of tokens:

Real Time: (or Pre-paid tokens)- These are exchanged between buyer and seller, their
users pre-pay for tokens that serve as currency. Transactions are settled with the exchange

of these tokens. Examples of these are DigiCash, Debit Cards, Electronic purse etc.
Post Paid Tokens are used with fund transfer instructions between the buyer and seller.

Examples Electronic cheques, Credit card data etc.

Electronic or Digital Cash- This combines computerized convenience with security and
privacy that improve upon paper cash. Cash is still the dominant form of payment as: The
consumer still mistrusts the banks. The non-cash transactions are inefficiently cleared. In
addition, due to negative real interests rates on bank deposits. Now we will enumerate

some qualities of cash:

Cash is a legal tender i.e. payee is obligatory to take it.
It is negotiable i.e. can be given or traded to someone else.
It is a bearer instrument i.e. possession is proof of ownership.
It can be held & used by anyone, even those without a bank certificate.
It places no risk on part of acceptor.
Electronic Cheques- The electronic cheques are modeled on paper checks, except that
they are initiated electronically. They use digital signatures for signing and endorsing and
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require the use of digital certificates to authenticate the payer, the payers bank and bank
account. They are delivered either by direct transmission using telephone lines or by

public networks such as the Internet.

Card- Card-based such as
Credit and charge cards- It means buy now, pay later.
Debit cards- It means buy now, pay now
Cash cards, stored-valued, e-cash- It means buy now, prepaid or pay before
E-Wallet- The E-wallet is another payment scheme that operates like a carrier of e-cash
and other information. The aim is to give shoppers a single, simple, and secure way of
carrying currency electronically. Trust is the basis of the e-wallet as a form of electronic
payment.

Secured Payment Gateway Diagram

PAYMENT OPTIONS IN HOMESHOP18:

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25

PORTER'S FIVE COMPETITIVE FORCES MODEL

According to Porter (1980, 1985) and Porter and Millar (1985), a firm develops its business
strategies in order to obtain competitive advantage (i.e., increase profits) over its competitors.
It does this by responding to five primary forces:
(1) The threat of new entrants,
(2) Rivalry among existing firms within an industry,
(3) The threat of substitute products/services,
(4) The bargaining power of suppliers, and
(5) The bargaining power of buyers.
A company assesses these five competitive forces in a given industry, then tries to develop
the market at those points where the forces are weak (Porter 1979). For example, if the
company is a low-cost producer, it may choose powerful buyers and sell them only products
not vulnerable from substitutes. The company positions itself so as to be least vulnerable to
competitive forces while exploiting its unique advantage (cost leadership). A company can
also achieve competitive advantage by altering the competitive forces. For example, firms
establish barriers to deter new entrants from coming into an industry by cultivating unique or
capital-intensive resources that new firms cannot easily duplicate. Firms also increase
bargaining power over their customers and suppliers by increasing their customers' switching

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costs and decreasing their own costs for switching suppliers. The five competitive forces
model provides a solid base for developing business strategies that generate strategic
opportunities. Since the Internet dramatically affects these competitive forces, Internet
companies should take these forces into account when formulating their strategies.
In his recent study, Porter (2001) reemphasized the importance of analyzing the five
competitive forces in developing strategies for competitive advantage: Although some have
argued that todays rapid pace of technological change makes industry analysis less valuable,
the opposite is true. Analyzing the forces illuminates an industrys fundamental
attractiveness, exposes the underlying drivers of average industry profitability, and provides
insight into how profitability will evolve in the future. The five competitive forces still
determine profitability even if suppliers, channels, substitutes, or competitors change.

Porter's Five Competitive Forces Model

IN CONTEXT TO HOMESHOP18:
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An expansion into related product lines can also be a good strategy. According to Porter
(1987), the expansion into related product lines can exploit transfer of skills or sharing of
activities such as promotion and distribution, which will lead to competitive advantage.
Sharing can lower costs by achieving economies of scale and effectively utilizing company
resources such as market information, managerial or technical expertise, and knowledge. 3
Like traditional companies, Internet companies can also expand their product line into areas
related to their existing product lines. For example homeshop18.com recently started selling
personal computers in addition to its existing line of electronic products such as disk drives
and memory (Hansell 2001).homeshop18.com holds no computer inventory and has
computers shipped directly from a computer distributor to its customers. This allows
homeshop18.com to save inventory-holding costs. However, such expansion cannot bring
increased profits to homeshop18.com without effective utilization of its existing customer
base and information, and managerial or technical knowledge of e-business.

HOMESHOP18s VALUE CHAIN

HOMESHOP 18 developed a value chain of itself to internal it can operationally best add
value and maintain a competitive advantage.
They used the value chain model from Michael Porter's book, "Competitive Advantage:
Creating and Sustaining Superior Performance."

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Homeshop18 Value Chain

Primary Activities and Support Activities

Primary activities are those needed to produce a product or services for the end customers.
These activities typically include:

Inbound Logistics: receiving goods from suppliers, and storing and moving those
good

Operations: Manufacturing or assembling the product

Outbound Logistics: Sending the goods to wholesalers, retailers or directly to the

end customer

Marketing and Sales: Marketing involves understanding customer needs,

communicating those needs, and promoting the end products.

Service: Involves after-sales support (e.g., handling, complaints, installation, training)

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Support activities help to facilitate or assist the primary activities of producing product.
Examples include:

Procurement: purchasing raw material and other items used in operations

Human Resource Management: recruiting, hiring, firing, training, developing,

compensating

Technological Development: research and development, process automation,

software, hardware, equipment, etc., to support operations

Infrastructure: May include accounting, legal, finance, planning, public affairs,

government relations, quality assurance and general management.

Advantages from a Value Chain Perspective

Some of competitive advantages from a value chain perspective include:

Strong technological infrastructure with a single platform

High investments in technology development (e.g., Kindle) to best leverage digital

products
Great product forecasting system
Print on demand
Constantly soliciting suggestions on new products
Easy and fast payment system
24 hour operations

Contributed to the Success of homeshop18

The management, organization and technology factors that have contributed to the success of
Amazon:
1. Convenience and ease of use
Large selection: publisher relations, wholesale relations, unlimited virtual shelf space
2. High Performance Service
Website is fast, reliable, and easy to use
Shipping is prompt
Customer is kept informed
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 Innovative technology
3. Brand share of mind/Networking
Short, clever name/URL/tag line
Referral program
Co-branding, cross promotion and high advertising
4. Community
Posting customer reviews with author reviews
Customer gifts: bookmarks, notepads, cups, etc
Promotion where customers collaborate with famous authors
5. Personalization/Large customer database
Extensive customer profiles
Recommendations
Other readers who bought this title also bought
Other readers who bought this author also bought
6. Trust
Guarantees
Return policy
Great customer service: superior service reps, easy search, no hassle return, email
confirmation
7. Extended Service
Extensive subject index
Search
Ability to order before publication
Out of print search
8. Cost Structure
Low price
Low overhead: less employee, less real estate, low inventory
9. Logistics
Fast, reliable, inexpensive shipping
Originally no inventory, use Ingram

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