Electronic commerce, abbreviated e-commerce , is the utilization and implementation of information and communication technologies (ICT) and related technologies in management and control of business processes and activities. Business type is the strategic organization of business components for the benefit of all stakeholders; e-business type is defined as the approach an organization acquires to attain profitability on the Internet, Currie, (56). There have been several types adopted by companies, these includes e-shops, e-marketing and collaboration platform, however, E-business types adopted have varied, as the classification of the types show a discrepancy, other researchers such as Sweeney,(51) have suggested types such as electronic order taking, electronic payment only, online catalogue and electronic payment, and a fully integrated e-business however the strategies and types have varied where some types have resulted to opportunities of success and profitability, while other types have resulted to challenges, where the adopting organizations have had to close shop or changed to a different type due to threats as Chaudhury,(231) argues.
Types of e-commerce
Collaboration platform e-commerce
Collaboration platform types and marketing and e-auctions portal shall be considered in the research.Collaboration platforms have been adopted by some companies as a type of e-commerce Bidgoli, (54-56), these involve offering communication platform to clients; companies that have adopted such types have gained relative achievements. Exemplars are intralinks.com, twitter.com and facebook.com, collaboration platform type has therefore been successful.
Marketing e-commerce and E-auctions portal
Some companies have adopted marketing and e-auctions portal, which in some cases has resulted to failure and collapse of the firms; this can be highlighted by the closure of Priceline.coms WebHouse Club Greenwich, Conan-based WebHouse Group licensee and Perfect YardSale which offered customers pre-owned products.
Opportunities
In e-business business, collaborative environment types are virtual workplaces which involve several components for information exchange, communication and working by different members or teams of an organization. The environment utilises and coalesce technological advances in videoconferencing, internet based conferencing and collaboration, online chats, archived and real time streaming, and instant messaging to a user friendly workspace.
Several successful components are incorporated in collaboration type, these includes social computing. Social computing has been successful since it has impacted on business decision making, risks, opportunities and projections in order to gain strategic advantage. Among the impacts is the augmentation of shadow Information Communication Technology and grassroots social tools, where employees, have access to Software-as-a-Service (SaaS) via the Web opt to work without being physically present in their offices as argued by Currie, (34), furthermore cloud computing has impacted on the altering the field of Information technology, this has assisted organizations attain strategic competitive advantages via functional agility, cost reduction and innovation utilization. Social computing has also impacted on enterprise software vendors integrating social functionalities in their applications. More so, social computing has impacted on mobile devices being utilised by organizations for business purposes, by additional application advances such as instant messaging, e-mail and short message service, Schneider, (45).
The objectives and opportunities of collaboration framework type are to generate profits for organizations by offering payable services such as adverts and links to other websites, while the users utilise the collaboration platform provided, they also access the links provided hence providing revenue to the site owners. Collaboration platform type has been utilized by organizations to gain competitive advantage, in terms of increased potential client reach. Social computing such as Enterprise 2.0 has assisted in achieving organizational objectives by fostering communication with all stakeholders. They have also impacted on improving the work environment, advanced customer satisfaction, personalised communication and enhanced collaboration hence improving profitability of the companies.
Threats
E-commerce has had some threats; the adoption of e-shop portal type has been growing speedily as attested by the number of portal products offered. However, the marketplace has been saturated, especially when the client base is limited and the portal company fails to be dynamic to the changing business environment, hence resulting to failures of the companies. Whereas e-shop type has at times failed, there have been successful components and least successful components. Successful components include the presentation services, user services, publishing services and subscription and notification services. However security services, content management services and dynamic components have been less successful. The presentation components have been successful as a link between the user and the portal itself, the user components have also been successful in provision of user interface, customized customer personalization services. Publishing services have been successful in offering clients with required information with the assistance of Subscription and notification components, Ritendra, (345).
The security components have however, been a threat where client information such as personal information and financial data have at times been compromised, content management components have at times failed to be successful where clients have been offered content, not relevant with their needs, such as bombarding customers too much adverts as presented by Effy, (65).
Conclusion
Collaboration platform type has played a role in enabling business achieve strategic objectives, it can furthermore be integrated with service orientation to propel the organization to be strategically ahead of the competition, by meeting client needs, while reducing costs hence gaining competitive advantage. E-shop type also play a crucial role in meeting client needs, however when saturation level is reached, the businesses can fail, therefore the type should be dynamic to meet changing needs of the business environment.
Sweeney, Susan. The e-business formula for success: how to select the right e-business type, Web site design, and online promotion strategy for your business. New York: Maximum Press, 2001.
The process of launching a product sale over the Internet is complex. The system, although not new, is constantly improving and adapting to the realities of todays market. It is needed to be aware that the trends that were popular when creating the page in an online service may change, and it is needed to be mindful that this may discourage the customer. An analysis of the market for creating sales web pages is only a tiny part of what should be considered when transitioning to online sales (Valacich & George, 2020). There are essential nuances when considering the entire transition process. This can be as much about filling the site itself and ordering a designer as it can be about constructing logistics pathways and establishing a timely delivery. This research paper will analyze how to create the content to work with the site, what features there should be, and how to properly set up the functionality to make it much easier for the customer to shop online.
Detailed Requirements List
The first issue that needs to be settled is to start by filling the site with various buttons and features. It is essential to understand that this is cannot be a quick process and requires considerable fine-tuning as the project builds, referring to the feedback from testers and customers who will be the first to use the services. The first thing to do is create an initial screen that will greet the customer. It should contain basic information about the product, its characteristics, description, price, customer feedback, and the purchase button. These elements are the most important when the company makes a web page for selling a product, as they allow the client to orientate himself with the product and study it before buying it.
Once the customer has familiarised themselves with the sites features and is ready to proceed with the purchase, they need to be redirected to a new screen. It will show which product has been added to the shopping cart and offer additional accessories. This will make it possible to assemble sets of additional items, which may be helpful when the client buys one thing or another (Levin & Yehudai, 2019). After confirming that an item has been added to the cart, the client should be offered a choice to continue shopping or place an order. If the customer chooses the first option, they will be redirected to the previous page where the item was added to the cart. If the customer chooses the second option, a new screen opens where the customer is offered to place the order.
During checkout, it is possible to request the possibility of authorization to provide some bonuses or subscribe to the newsletters with discounts. In this way, the customer will be aware of new offers from the retailer and will not lose contact with the place where he made the order (Software Maintenance Overview Tutorialspoint, n.d.). Creating a detailed list of requirements involves some other essential steps. The first one is identifying relevant stakeholders to indicate how the requirements will be met. In this case, it includes the management of the company, customers, staff, and the state as a source of the legal framework. Further, one needs to conduct interviews with selected stakeholder groups, namely staff, and customers. It can be performed with questionnaires, both online and offline. The next requirement is to define a focus group that contributes to the development of the target market representation. In this regard, it is formed by a group from the analytical and marketing departments.
The next step will be to find out how customers accepted the product or service. The most effective way is to create questionnaires, which include several essential factors. Firstly, the questions should be short and precise, in addition, the client should have easy access to the questionnaire. Further, the questionnaire should not be too long and not take a lot of the clients time. It will formulate honest and thoughtful responses and remove the possibility that the client will ignore the questionnaire. Finally, one might offer clients some bonuses after completing the survey to increase their motivation.
Feasibility Analysis
Creating this type of sales and shopping method screens requires mainly first-class staff, namely UX/UI designers, programmers, front-end developers, and testers. Graphic designers are needed. These professions are best suited for the task at hand and help design the required number of web pages, making them as attractive, user-friendly, and famous as possible (Levin & Yehudai, 2019). In addition to human resources, financial resources are needed to buy the necessary equipment. The comfortable work of the staff directly determines the result of the job done and has an impact on the final product (Leach, 2018). In addition to the already mentioned equipment and workforce, suitable premises for collective work are needed.
To effectively calculate the profitability of a particular system, it is necessary to calculate the ROI and the breakeven point of this system. Calculations should be carried out, taking into account the monetary benefits of customer ordering at $185,000 per year, and one-time costs of $275,000. Besides, recurring costs of $85,000 per year, a discount rate of 12 percent, and a five-year time horizon should also be considered. Thereby, a net profit for a year considering a discount rate would be $88,000 per year and $440,000 for five years. Thereby, taking into account all these indicators, the ROI for the particular period, namely five years, would be, on average, 45 %. The breakeven point, in this case, would be $700,000.
Such things are affordable as the number of people in the field is growing every year due to the popularity of the profession and the development of IT technology. The same is true for the equipment and the space needed for work. At the moment, there is no shortage of both items in the world, and one can rely on rapid development. Thus, it can be stated that the feasibility of the goal is high enough if the requirements for hiring employees, sound equipment, and good working space are met.
Development Methodology
All of the above factors should be considered when estimating how soon a company will break even, as the cost of renting premises, labor, and other components vary from region to region and from specialization to specialization. Considering the data given in a hypothetical situation, the payback period of such an investment is approximately one year. This figure is close to ideal, as many businesses cannot afford to pay for themselves for several years due to high costs and failed ideas.
In this case, if one takes into consideration specific figures, this system is quite flexible, which makes it possible to count on payback shortly. It has some factors that can change throughout the business and is stable over time (Tarwani & Chug, 2016). As early as the second year of this type of sales, the company can expect to make a profit, and in the long term, after about five years, it is possible to make a profit of around ten percent on the investment in this company. Therefore, this development strategy, namely, setting up sales through the Internet without having an actual location, is very comfortable. It carries fewer risks than opening a physical shop and relies only on competent management and good conditions for future development. As for the development, the methodology should be flexible and depend on the circumstances faced by this branch of business development (Tarwani & Chug, 2016). It is impossible to calculate all the risks, so it is required to build on what will happen while creating the layout of the development site, the sales process, and the first customer feedback.
Implementation Plan
Speaking about the plans for implementing this system should consider that it takes quite a long time and is not done with an emphasis on the earliest possible launch. It is necessary to have a thorough basis and knowledge of the principles of all these mechanisms and their launch in the operating mode from the first time, without finalizing the departures and emphasizing multi-functionality. Observing this method of preparation, it should be borne in mind that the key here is the time in which the project will be ready to launch. For example, creating a template page will take a relatively short time compared to finding the necessary materials and specialists to work on. It should be understood that the early launch can lead to angry feedback from customers, who will disagree with some of the problems that may haunt them at the first opening of the site. This can lead to reputational losses and, consequently, worsened sales at launch.
Strategically correct steps must be followed to properly launch the product and implement it into the public Internet network. According to this, the first one should be to gather a team, provide the necessary equipment in one room and start development. Once this stage is complete, it is possible to proceed to the second, namely the creation of the design of its pages. For this, it is needed to contact the designers, who, together with experienced programmers, can implement the functionality and make it user-friendly (Lingaraju & Jagannatha, 2019). After these preparations must conduct many tests and release their product to the public. However, this is not the end of the development cycle because it must continue all the time and keep the product in a functional state.
Testing and Training Plan
Despite the already past stage of planning the launch of the product, it is necessary to consider that the product support cycle does not stop and needs to be constantly improved and tested. Therefore, after all the necessary preparations, which may take several months, it is required to conduct in-depth testing of the product (Mendes-Moreira & Davies, 2018). It should be fulfilled at different stages, first within the company, to identify the presence of bugs and glitches. After many problems are solved, a page can be released in the public domain with the note that the product is still under development and many things in it will be finished in connection with buyers requests. This will let the company know that the product is ready to be developed and will not cause an adverse reaction from users, even despite the website crashing and malfunctioning.
After customers can interact with the site and use its services, they can write a review, which will describe in detail the problems in the operation or functionality of the product. This data should be collected and analyzed by a specialist and sent directly to the firm that deals with development. After a thorough analysis of what happened, the development cycle begins anew because starting from the design stage, some changes must be brought that seem inappropriate to the user (Mendes-Moreira & Davies, 2018). After all the work has been done repeatedly, testing for new bugs and bugs and still asking for user feedback for further improvements.
Conclusion
To summarise this paper, the process of moving to e-commerce is incredibly complex, both in its organization and its further development. Although current technology makes the transition more accessible than before the pandemic, when it was much slower due to its unpopularity, there are still problem areas that need to be addressed. For example, it is necessary to have a clear understanding of how the Internet sales system works, find experienced people in the field of web page creation, make grammatical use of the available resources, and interpret the data obtained.
Although this type of selling is much easier for buyers, it is harder for salespeople to master. It requires a significant investment of time, effort, and working resources to develop. The main problem can be the lack of physical contact with the customer when it is possible to offer a selection of products, conduct consultations and select the right product. There is no such opportunity via the Internet, and there will always be problems choosing the right product.
The lifecycle of such projects needs to be maintained and developed. As this industry is relatively new and not fully mature, system failures, bugs, and logistical errors will occur. In this market, it is needed to be flexible in decision-making and be able to draw the correct conclusions from what is available. This can be seen as the key to success in the future, as this area covers a global market and allows interaction with customers across vast distances.
Ethical consideration in business dealings is of great significance; especially in the current technologically oriented society. Being an integral of culture, ethics remains the only key value in the society that can bring harmony and coherence for co-existence in the currently integrated society in terms of culture. As a result of global interaction in various business activities; e-commerce has become inevitable to enhance consistent and continuous communication among businesses and their clients. In this respect, therefore, corporations and businesses need to be covered by common law in their operations to ensure ethical dealings in business are enhanced. Vividly, this has been triggered by the advancement of technological levels leading to the easing of communication across the world leading to e-commerce. This paper discusses the theory of utilitarianism in global e-commerce business dealings (Mallor et al., 2010).
Perhaps, the theory of utilitarianism in businesses is based on the technological perspective of the business dealings whose main concern is the satisfaction of the business clients. It is of great importance to note that, business dealings in contemporary society ought to be based on ethics; to avoid any alienation among the businesses and their clients. Considering the current technologically oriented society fraudulence has thrived to great depths; in which international business dealings have been done online through the use of the internet. In reaction to this, the International Business Corporation has developed laws and strategies to govern businesses so as instill ethical values among businesses and their clients globally (William & Freeman, 1995).
Certainly, the moral part of business dealings in the current world remains inevitable; in which all the parties in any business activity ought to accept and respect each other in all aspects of the dealings. As it is in utilitarianism theory, businesses must provide their clients with commodities and services capable of meeting their expected satisfaction levels. More specifically, businesses ought to consider the level of standards and quality of their services to ensure that they meet their customers expectations and preferences. Generally, all stakeholders in businesses are required to maintain a high level of dignity and show moral consideration in all business activities; to ensure consistency and coherence in business operations (William & Freeman, 1995).
More so, various codes of behavior ought to be adopted to instill social values like integrity and sincerity among business partners to enhance ethical dealings in international business dealings. Further, e-commerce dealings need to be closely monitored to curb any false and fraudulent dealings among business dealings across the globe. In this regard, businesses operating online ought to adhere to all codes of ethics governing their operations; to ensure that utility is enhanced in their dealings with their clients. As it has been revealed, many business operations online end up disappointing their clients; in which they deceitfully make unbecoming business dealings with their customers (Mallor et al., 2010).
As it has been revealed, many e-commerce dealings in the current technologically oriented society have thrived to a great extent. In this regard, therefore, various businesses operations ought to be governed by a code of ethics to enhance instilling of moral values in their business dealings with their clients. Generally, it is of importance that businesses and corporations in e-commerce ensure ideal and sincere dealings to meet the expected level of satisfaction by their clients.
Reference list
Mallor, J. et al. (2010). Business Law: The Ethical, Global, And Ecommerce Environment (14th ed.). New York: Irwin/McGraw Hill Publishers.
William, M. & Freeman, E. (1995). The Normative Theories of Business Ethics. New York: Prentice Hall Publishers.
Turner Broadcasting System embraced e-commerce due to the perceived threat of broadband video to its TV industry. Tuners interactive services have managed to combine TV services and the Web enabling viewers to have new experience. Its websites allows for advertising and viewing on both TV and the Internet. Moreover, customization on the Web services enables viewers to access specific information of their liking and choice. Tuners linking of their Web to the internet allows it to have universal viewers. The Web also has a socialization section for viewers.
Web Value and its development of the TV business
Web creation has enabled Tuner Broadcasting System to remain in business. The combination of both TV and Web services has allowed the companies to increase viewers since its possible to access it globally. Tuners ability to create and run Websites successfully has allowed it to sell more advertisements that generate money for both companies. Companies like NBA, PGATour and PGA pay Tuner millions to run their websites (Laudon 409). Through the integration of many features on the Web, viewers can access a wide range of information through the Internet or TV. With the advertising caption on the Web, viewers can gain knowledge of specific products in the market enhancing the companies visibility.
NASCAR Trackpass: Tuner Sports New Medias value to sports sites
NASCAR.com was the first company to be managed by Turner Sports New Media Company. Turners ability to manage Web companies is exemplified by the success it has with NASCAR.com which ranks among the top three Internet sports sites (Laudon, p. 409). NASCARs TrackPass is the most enhanced e-commerce feature on the NASCAR.com. NASCAR TrackPass interactive presentations, a key feature in e-commerce include; TrackPass Scanner, TrackPass Pit Command and TrackPass RaceView (Laudon, p. 409). Customization of the applications is enhanced with the viewers enabled to access cars and drivers racing, pausing, replaying and rewinding ongoing races. Social networking section is also provided (Laudon, p. 409).
Tuner Sports New Media and its growth prediction
Due to the innovativeness of Turner Company and the success gained from the existing successfully managed Web services, it is possible for Turner Sports New Media to continue growing steadily. Its increasing Web clients from one in 2003 to five in 2008 indicate a sturdy growth (Laudon, p. 409). The companys experience in the field of Web management and extensive viewer base can also enhance its development. Turners interactive strategy that is employed in their Web running is more likely to attract more clients and viewers, placing it among the best Web managing companies. Since it is not the only Web Company in the market, Tuner might find it difficult to maintain its current growth due to new and less expensive entries.
Websites E-Commerce Features, Purposes, Value and Promotion of TV Viewing
The sites display interactive features in the form of the many applications. The sites are highly customized; for example, the PGATour website allows access to various golf courses, players and holes (Laudon, p. 409). The sites also allow members to interact on a social platform by creating their own accounts. The sites are accessed globally increasing the number of viewers. The sites have an ads application that generates income for them. TV viewing is promoted through their interactive capability. This application also increases their visibility and enhances growth in the number of viewers.
Works Cited
Laudon, Ken & Laudon, Jane. Management Information System: Managing the Digital Firm. London, UK: Prentice Hall, 2009.
Is the traditional retail industry dying? Thats one of the first questions that comes to mind as you see many retailers performing poorly, closing stores, and even going bankrupt. However, after digging deeper into the elements that contributed to the fall of retail, one of the main reasons was the changing nature of consumer behavior as e-commerce started to rise. Retailers are taking initiatives in order to adapt to the changes by having smaller store footprints, invest in technology innovation and going digital, and creating an experience for the consumers.
Context
Retail is one of the largest and most diverse industries of commercial real estate. They are basically used to market and sell consumer goods and services and range from shopping centers, individual stores, and pop-up shops to big box stores like Walmart, Home Depot, and Ikea. This sector is consumer-driven and is sensitive to the state of the economy. It will suffer if the economy was bad or if the consumer changed his/her behavior as a result of a rise in another industry like e-commerce, which is the case nowadays.
E-commerce is marketing and selling goods and services using the internet as a platform for the consumers to interact with instead of actual brick and mortar stores. The rise of this industry is attributed to five forces that include price, selection, convenience, distribution, and cost structure. The model of this industry of providing the goods to the consumers using an online platform is more convenient to some customers and can fulfill the changing consumer need.
Methods
In order to dig further into the outlook of retail and how it is changing, I spoke to a couple of experts to gain insight into the retail sector, what strategies are retailers using to adapt to the changes caused by e-commerce, and a potential relationship between the rise of e-commerce and increasing demand in data centers. Afterward, I used their insights as guidance to research the retail sector, its relation to e-commerce, and the potential outlook of where it is headed.
Findings
The old model of brick-and-mortar stores does not fulfill the current consumers need anymore in most sectors of retail, and there is a need for a newer model that includes providing an experience to the customers. In this paper, we will be looking at the effects of e-commerce on retail by looking at the performance of malls and centers lately and will dig further into tenants and the next steps needed to adapt to the change of consumer behavior.
Malls and Centers
A shopping mall is a building, typically large in size, with many stores inside that, are usually leased to retailers, and is considered a shopping destination for customers. Shopping centers, on the other hand, are typically just destinations with many shops just like a mall but not constrained by a building. It could be an open-air shopping area where people can walk outside from one store to the other.
Decrease in Asset Values
There is a significant decrease in nearly all retail real estate asset values these past few years, as shown in the graph, with the exception of Gateway Grocery-Anchored Centers. This decrease is a result of the deteriorating outlook of the retail sector that is caused by the changing consumer behavior where they prefer the freedom of shopping using their computers or phones to avoid trips to a store.
There are three segments in retail that are affected differently by e-commerce, High-End segment, Middle segment, and Lower segment. The High-End part is focused on selling luxury goods and high-end products that are not considered necessities, but wants and it is not as affected by e-commerce since
The decline varied by property type, with low productivity malls (B-Malls) declining the most by around 30% since the beginning of 2017.
On the other hand, Gateway Grocery-Anchored Centers, which are community centers in gateway markets that have a grocery store as their anchor tenant, are showing no decrease in value at all because of the impact of e-commerce on the grocery business has been minimal. The physical store is still the centerpiece of the grocery business model, but big grocers like Wal-Mart and Kroger are still investing heavily in e-grocery innovation for both pick-up and delivery to adapt to the potential change.
Recent Performance
Revenue per Available Foot RevPAR is a performance metric that is used in real estate. In retail real estate, it is calculated by dividing the assets total revenue by the entire available space, or by multiplying the percentage occupancy of tenants by the average rent throughout the year. As more tenants go close stores, pursue resizing initiatives, or go bankrupt, the occupancy will decrease, which would decrease RevPAF in return. Also, as new tenants come in, higher rents can be charged to them, which would increase average rent and RevPAF eventually.
Looking at the performance of the sectors within real estate, malls, and strips are the weakest expected performance in terms of Market RevPAF for the next couple of years. The store closures weakened the landlords negotiating power resulting in a declining average rent and occupancy. It also led to an oversupply of retail space in the market with no demand matching the supply resulting in a declining average rent
Overview
In the context of globalization of business, retail trade-in large cities are developing mainly as a result of the opening of stores of network companies, shopping centers. In the current decade, special attention has been paid to the construction of a shopping mall and shopping centers. Investors are private companies and individual entrepreneurs. In shopping centers, there is a concentration of shopping facilities of various specializations and catering facilities (Oh and Polidan 39). A shopping center is a group of architecturally united trading enterprises built on a specially planned, developed, and owned site, which is managed as a whole. At the same time, the size and type of stores exactly correspond to the served shopping area and are provided with parking lots on the adjacent site in strict accordance with the kind of shopping center. The idea of a new type of commercial building a spacious, light-flooded space in which the buyer can enjoy the spectacle of a variety of goods collected under one roof came about after the 1851 World Exhibition in London, when the Crystal Palace Pavilion appeared to the amazed visitors (Ives et al. 3). The construction was striking in its size: the total area of the pavilion in three levels 2 was 92,000 m2, and at that time the Crystal Palace was the largest building. With a length of 564 m and a height of 33 m, it accommodated up to 14,000 visitors (Nickson et al. 701). Now, this pavilion is rightfully considered the prototype of a store.
In many European countries, there is a tendency toward the enlargement of shopping centers. Not only shopping and entertainment centers are being built, but also trade and exhibition centers, as well as business centers. According to the British Council of Shopping Centers, 40% of shopping centers in Europe have a leisure and entertainment part (Oh and Polidan 41). In France, where the process of creating large shopping centers was going very fast, the authorities were forced to adopt a law prohibiting their construction. In Germany, where entertainment and fitness centers are well developed, the mall format has not become popular (Nickson et al. 704). German shopping centers focus on trade, domestic services, and food courts, while the entertainment part is allocated only 2.4% of the rented area (Kushwaha et al. 281).
In addition, a separate category of specialized shopping centers stands out. Depending on the specialization in various areas, shopping centers have distinctive features. Anchor tenants in such shopping centers are one or more operators with a specialized profile. The coverage area depends on the area of the shopping center and, as a rule, it is more extensive than the coverage area of a shopping center of a similar format without specialization. In the regions, shopping centers are developing in the same way as in the capitals, and the corresponding operators work there (Lange et al. 15). A significant advantage is lower land costs and associated costs, so entertainment there is relatively cheaper and, accordingly, is developing faster. Starting with a slight lag, regional shopping and leisure centers are quickly catching up with metropolitan malls in terms of supply and quality of services.
In small cities, there are examples of a balanced approach to the design and construction of shopping centers. The traditional range of services billiards, bowling, slot machines, multiplexes, fitness will last on the market for another 2-3 years (Oh and Polidan 44). Many owners of regional shopping and entertainment centers have begun to realize that their city or region needs a full-fledged entertainment component. However, it is evident that then the market will need innovations, and what they need to be in order to meet new needs, must be done as soon as possible (Sivagnanasundaram 103). Those who will be able to think over the concept of the shopping and entertainment center and satisfy the needs of consumers by providing them with more diverse services will win. The purpose of entertainment in the mall is to maintain or increase the level of rental rates for retail tenants, to create additional attendance at the expense of those whose needs are mainly satisfied prosperous young people or middle-aged people (Ives et al. 3). By placing a bowling alley and a childrens entertainment complex nearby, including a cinema in the shopping center concept, the investor seeks to increase the number of visitors in general and separately for each operator.
The fact that shopping centers continue to expand their area for non-commercial purposes indicates the economic feasibility of such a solution. The more needs the shopping center can satisfy, the more people will stay there for a long time, which means more stores will be visited and more purchases will be made. Cinemas, bowling alleys, and childrens entertainment centers are less cost-effective than the trade-in goods. Entertainment enterprises are distinguished from the business by a large volume of investment and a longer return on investment (Lange et al. 8). The cinema has a low efficiency since significant areas in it can conditionally be called commercial these are projection, foyer, corridors, etc. Bowling is even less effective. Game paths occupy a large area, and patency in bowling is much less than in a movie theater.
The construction of the shopping center is ahead of the development of retail chains. This creates a shortage of quality tenants. According to entrepreneurs, there is a shortage of professional entertainment professionals in the country who can offer new ideas and put them into practice (Kushwaha et al. 277). The profitability of shopping and entertainment centers is low. Existing alternative investment opportunities do not allow investing in entertainment centers that have low profitability compared to shopping centers unless the investor is an entertainment operator. In addition to high rental rates for land, the municipality to which the property belongs puts forward a lot of burdens from the overestimated share of the city, social responsibilities to highly recommended designers, on whose participation the building permit depends.
In such a complex and new area as the construction of shopping centers, there are no standard solutions. Each project requires fresh thought, thorough research, and unique solutions. The development of shopping centers should be preceded by an analysis of the provision of territories with retail space and socio-cultural facilities (Oh and Polidan 35). The oversaturation of shopping centers leads both to loss of profit by entrepreneurs and a deterioration in the quality of trade services.
Retailers
Basic requirements for the characteristics of shopping centers are a single site, easily accessible location inside the trading area, a sufficient number of parking spaces, and the ability to deliver goods to the warehouse, as well as to points of sale of goods (Ives et al. 10). It also includes environment infrastructure around the shopping center, the composition of tenants from the same price category, suitable for a single concept, and an atmosphere conducive to shopping. Entertainment objects are becoming an integral part of many modern shopping centers. Each project requires rigorous studies of the environment, environment, and coverage area (Ives et al. 11). The picture is constantly changing, as retail trade is keenly responsive to changing specific conditions, the level of technical knowledge is increasing, and economic and physical requirements are changing.
The next sign of the classification of retail trade organizations is the level of integration. It should be noted that the systematization of trade organizations, depending on the level of integration in one interpretation or another, is present in modern classifications presented in economic and regulatory literature. At the same time, the process of developing trade integrations is dynamic. Therefore, it is suggested to expand the classification of trade organizations by the level of integration, further highlighting the following characteristics according to organizational, economic, and spatial forms of unifying transformations of business structures. The proposed classification meets the requirements of globalization, is more variable, and reflects the emergence of ever new types of trade integrations.
The integration of business structures is closely related to the diversification of capital and the penetration of trade organizations into various segments of the market and industries. Therefore, it is safe to consider it appropriate to highlight the classification sign the level of diversification. In accordance with the proposed feature, all retail trade organizations are divided into non-diversified and diversified, including a focus on intra-industry and inter-industry diversification (Kushwaha et al. 279). Intra-industry diversification is an association of functionally independent organizations of various industries within a single trading organization. Thus, most of the classic retail chains are represented by shops, wholesale distribution centers, workshops for the production of semi-finished products, salads, pastries for confectionery and culinary products, transport units, and others. Intersectoral diversification involves the integration of functionally independent retail trade organizations and enterprises of other industries. Examples of inter-sectoral diversification in the trading sector are trading business networks, financial-industrial-trade groups, multinational retail trading corporations, and others (Lange et al. 9).
In the future, retailers in the United States and Europe will continue to search for new markets outside their countries, expanding their geographic footprint. For such retailers, merging with similar companies in an already developed market will take advantage of global supplies, and the natural expansion of activities into new markets will allow large corporations to be in the wake of growing consumer demand and offer better services compared to local retail market operators (Lange et al. 11). It should be noted that some of the most successful attempts to expand activities in foreign markets were made by retailers from developing countries while entering the markets of other developing countries and countries with transformational economies.
Market Shifts
Furthermore, according to experts, in the long run, three types of companies will have a chance of survival: large manufacturers that produce a wide range of products and actively invest in R&D and promotion of new products; manufacturers of goods for sale through retail chains under the trademarks of these chains; operators operating in separate market niches (Nickson et al. 698). Manufacturers whose trademarks have failed to occupy the first or second position in the market are often forced to choose between turning large industrial companies into subcontractors and releasing products under the brand name of a retail network.
It is important to note that many retail companies take initiatives in order to match the current market shifts. For example, Wall-Mart and similar companies aim to construct delivery services in order to be able to compete with e-commerce leaders, such as Amazon (Ives et al., 8). Trends in increasing the share of sales in retail product chain stores, creating their own production facilities, changing the balance of market power from manufacturers towards retail chain magnates have identified yet another modern global trend in the development of retail chains: companies began to play the role of world-class marketers. Until recently, the leading marketers in the global market were considered manufacturers of consumer goods (Lange et al. 14). They monitored customer sentiment, allocated significant funds to market research, and skillfully used the media to label their brand. As retail companies grew and gained influence, suppliers had to shift their focus from end-user relationships to relationships with their customers.
The formation of trade relations has become more important than advertising in the media. The main place in relationships with consumers began to occupy retail companies. In addition, by promoting the sale of goods under their own brand, they themselves became leading suppliers (Lange et al. 7). At the same time, retailers still lacked relevant marketing skills and experience. In modern conditions, this trend is undergoing changes. Some of the largest retail companies in the world pursue an aggressive policy aimed at luring the leading marketers from manufacturers of consumer goods. They set themselves the goal of becoming centers of influence in the field of marketing, creating a unique corporate identity, successfully competing with other retail companies, and increasingly with manufacturers through the sale of goods under their own brand (Sivagnanasundaram 106). In fact, owned brands are no longer just a way to offer low prices but become an important channel for brand promotion and a way to increase profits.
It is also important to note that a client can receive a different number of services, depending on one or another organizational form. Thus, for example, in the market, subject to low prices, the buyer can count on their minimum set. Although the discounter provides a greater number of services compared to the market, this, however, is not its main competitive advantage, since its instrument of struggle for survival prices. In the discount store, only the main trading service is provided, and the variable of additional services, taking into account the mathematical expression store formula , tends to zero, since in this case the strategy chosen by the store is aimed at reducing costs and increasing profits (Lange et al. 9). However, this can lead to a decrease in the loyalty of customers with middle and above-average incomes, as a result of which they can become followers of other stores with a higher level of service.
Conclusion
In conclusion, analyzing the above trends in the development of global retail trade, it is safe to conclude that network trade is becoming a significant and influential force in the global economy, which largely determines the development of competition in the domestic markets of countries. At the same time, the development of retail is still not given due attention in programs of socio-economic development of any level (national, macro-regional, regional, and municipal). Without its organic inclusion in the general concept and strategy, programs, and plans of socio-economic development, the modernization of the modern economic system will remain incomplete, which will necessarily negatively affect the proportions and scale of its reproduction in the future.
Works Cited
Ives, Blake, et al. Amazon Go: Disrupting Retail? Journal of Information Technology Teaching Cases, vol. 9, no. 1, 2019, pp. 2-12.
Kushwaha, Tarun, et al. Factors Influencing Selection of Shopping Malls: An Exploratory Study of Consumer Perception. Vision, vol. 21, no. 3, 2017, pp. 274-283.
Lange, Fredrik, et al. Bridging Theory and Practice in an Applied Retail Track. Journal of Marketing Education, vol. 40, no. 1, 2018, pp. 6-16.
Nickson, Dennis, et al. Skill Requirements in Retail Work: The Case of High-End Fashion Retailing. Work, Employment and Society, vol. 31, no. 4, 2017, pp. 692-708.
Oh, Hyunjoo, and Mary Polidan. Retail Consulting Class: Experiential Learning Platform to Develop Future Retail Talents. Journal of Marketing Education, vol. 40, no. 1, 2018, pp. 31-46.
Sivagnanasundaram, M. Sustainability Practices in Indian Retail Industry: A Comparison with Top Global Retailers. Emerging Economy Studies, vol. 4, no. 1, 2018, pp. 102-111.
In order to explain how an organization can achieve significant cost reduction as well as marketing benefits with the help of Internet technology, it is necessary to define e-business first. According to a definition provided by IBM, e-business is the transformation of key business processes through the use of Internet technologies. It should be mentioned that the term e-business could be used to denote organizational strategy and operations as well as refer to the type of business that operates online.
Taking into consideration significant benefits of name recognition, cost reduction, and increase in revenues that the Internet offers for businesses, it could be argued that it is a typhoon force rather than a bit of wind. The use of internet technology allows making electronically mediated transactions between different parties thereby significantly reducing the cost of conducting business. Moreover, e-commerce offers numerous opportunities for directing pre-sale and post-sale operations thus fundamentally changing marketing structure of the past. By taking intermediaries such as retailers out of a transaction, it is possible to save up to 30 percent on sales. Not only does the Internet provide buyers with access to direct selling channels, but it also allows businesses to outsource various services, components, and materials driving the cost of doing business down. Moreover, pervasiveness is one of the main characteristics of e-commerce, and it is inextricably connected with marketing dimension. It allows businesses and non-profit organizations achieve a high rate of growth by marketing their products and activities through the Internet.
Business Strategy and Environment
Every business strategy has to be aligned with unique characteristics of an environment in which an organization operates. Without understanding economic, political, technological, and sociological implications of conducting business in a certain sector of the economy, it is impossible to identify threats and opportunities as well as to set a clear strategy.
The retail business environment is associated with a high level of volatility and change that presents a significant threat to long-term competitiveness. In order to achieve sustainable corporate development, my organization has adopted a business strategy that focuses on the promotion of sustainability and integration of innovations. To this end, it constantly measures its performance using specific industry benchmarks. In order to take into account all local priorities and issues, the organization adopted a bottom-up approach to measuring its performance. Specifically, it allows all suppliers to participate in the process of developing a framework of benchmarks for assessing sustainability. The organization builds its business strategy with the help of information about sustainable retailing provided by its customers thereby taking advantage of the business environment as well as new technological solutions for heightening consumer recognition.
By encouraging customer participation in the development of sustainable solutions for retailing, the company circumvents subjectivity bias inherent to other organizations that adopt a top-down approach to developing the framework of measurements. It allows the organization to integrate perspectives of society, retailers, and consumers into its operation process. Therefore, it could be argued that every enterprise that wants to achieve material efficiency and economic viability should develop their business strategies according to the unique characteristics of an environment in which they operates. Moreover, there is a large body of evidence suggesting that those organizations that include the factor of sustainability into consideration of their business strategies and management practices, not only achieve long-term competitiveness but also induce positive direct or indirect effects on profitability thereby benefiting both their customers and stakeholders.
Reference List
Chaffey, D., E-business and E-Commerce Management, Harlow, FT Prentice Hall, 2011.
Radovilsky, Z., Application Models for E-Commerce, San Diego, Cognella Academic Publishing, 2015.
Youn, C. et al., Measuring Retailers Sustainable Development, Business Strategy and the Environment, vol. 12, no. 3, 2016, pp. 103-108.
In starting an E-commerce business the most appropriate marketing strategy would be the segmentation marketing strategy that involves choosing a specific target market. This would be suitable since a person can channel most of his resources in an identified group.
A segmentation market strategy is also advantageous as the marker can bank on the competitive advantage he processes against a competitor. Through segmentation, a business can realize maximum profit from its services and identification of particular segments a segmentation marketing strategy also gives the marketer a chance to adapt and incorporate different customers needs and requirements into the services they offer.
This will enable production of quality services at an attractive price since the marketer shall have identified the highest source of income / value to fetch in a particular segment. The issue of cost obviously comes into play when dealing with both marketing and social networking strategies. The cost of the type of marketing strategy chosen is directly proportional to the cost of networking used. The capital available directly dictates the success rate of the strategies chosen. (Restrepo 1)
The following need is essential in launching the E-commerce business. They include establishment of a website that will describe all the essential features of your business, what kind of services the business offers, its major objectives and the target group. Prior research and knowledge of you competitors business is also very important.
The product must be well illustrated using diagrams for better consumer understanding. Coming up with a detailed and efficient business plan regarding the operations of the business is also very important. Software that will prevent hacking and seeking information through illegal means should be acquired to prevent piracy and web theft. Understanding the language used in e-commerce is very important. These languages and words are referred to as e-commerce glossary (Pablo 3)
In establishing a first step mover advantage in a foreign country of a persons choice, the following steps need to be followed. The first step is segment identification. Knowledge of the segment variable is very important in segment identification.
The segment variables comprises of three important features which are personal characteristics, benefits sought and behavioral measures, personal characteristics involves knowledge of the customers distribution in terms of Geography, their personal lifestyle, their population and personal attributes.
This will enable a marketer to know the consumers need enabling him to adapt to various marketing styles. Benefits sought by the customer or consumer will be very important in determination of quality and style.
This will also enable a newcomer in a business to have added advantage in a foreign country. The third segment variable is behavior measures. All matters relating to attitudes of a consumer, buying patterns, loyalty to a particular product or service, shall be useful for a newcomer in a country to have first advantage (Restrepo 1)
The second stage is the kind of technique that will be used. The segmentation technique that will be used will be very important in the foreign country as it will affect how the customers receive the services or products you offer. Poor technique will fail as it may not be common or appropriate in the foreign country (Restrepo 1).
The third stage of that can be used developing of a specific mechanism to satisfy the needs of consumers and being at par with the market conditions. This involves knowledge of fellow competitors and the current standards of the service or product in the market. Satisfaction of needs will also include developing counter measures to sensor competitors moves or to rival a competitors performance in service or product. This will also give a newcomer added advantage in a new country.
Works Cited
Pablo, Jeblo. E-Commerce White Paper: Launching Your e-Commerce Business, 2011.1-2. Electronic
Knowledge management is an important tool for acquiring, disseminating, and utilizing knowledge assets for the business benefits. Many businesses have gained global strength that enables them to compete with multinational corporations due to their ability to manage knowledge.
For instance, Amazon.com an online business has utilized its knowledge to enhance the business performance. Knowledge Management is one of the sources of competitive advantage in the improvement of their services and dispatch of the products within a short time (Turban, 2012).
Many global firms, engaged in e-commerce are proverbial on an ongoing basis which takes into consideration the customers buying behaviors and attitudes in order to gain a large market share.
These firms employ most of their techniques and resources to analyze and manage the customer information at hand without leaking to competitors (Turban, 2012). It is, therefore, prudent to say that Knowledge management plays a vital role in integrating e-commerce with other internal processes aimed at increasing business productivity and efficiency in the long run.
Knowledge management in an e-commerce platform is a starting point for sharing of thoughts, lessons, and skills with the business stakeholders, which is aimed at increasing business efficiency and effectiveness in all the processes undertaken by the business. Moreover, instances of duplication of efforts and frequent mistakes will be a past issue as employees understand the processes and loopholes during service delivery. Therefore, high standards will be an eventual outcome in promoting the e-commerce and higher revenues in the long run.
Knowledge of business clients, business partners and their needs is extremely essential in building and strengthening a mutual and profitable relationship. Knowledge Management is vital in developing e-commerce services and contents to give the traditional marketing a correct direction, and allow customers generate their own contents and services.
With revolving e-commerce platform and internet connectivity, knowledge about customers tastes and preference is highly paramount. Understanding such tastes and preferences aims at delivering customer-valued products and allows customers to suggest their ideas. This will enhance the loyalty and trust within customers, which result in mutual benefits in the long run.
In e-commerce (EC) arena, Knowledge Management is an effective tool for improving the organizational internal processes. This will in turn help the management to reduce the overall operational costs if utilized efficiently. Moreover, a suitable content, description of the Knowledge Management assets transform a business to a cash cow. This is possible by retaining customers and gaining new customers from the competitors. At the same time, it provides information on demand and supply factors in the market (Turban, 2012).
Businesses conducting their trading activities through the internet find it necessary to acquire knowledge of their customers. They employ statistical methods such as surveys, questionnaires, and customers comments from the discussion forums. Businesses will also require information about other stakeholders such as the suppliers, rivals and the company internal processes.
Such information is highly vital for the growth and enhancement of the e-commerce platform and requires a lot of concerted efforts to manage and deploy information to relevant departments for analysis. Given the importance of the Knowledge Management in supporting e-commerce, Knowledge Management needs adequate measures and systems to ensure that information get to the right persons within the structure of the business (Turban, 2012).
In conclusion, without Knowledge Management, e-commerce would not experience either growth or expansion. This is attributed to the failure to consider the essential stakeholders and processes. Therefore, Knowledge Management is an integral to e-commerce growth.
Reference
Turban, E. (2012). Electronic commerce 2012: A managerial and social networks perspective. Pearson.
The pandemic caused by the global spread of COVID-19 contributed to multiple changes in all spheres of peoples lives. In particular, due to limitations connected with mobility and in-person activities, individuals could not visit traditional shops as usual. At the same time, affected by multiple pandemic-related restrictions, businesses were forced to turn to e-commerce sales channels for survival (International Trade Administration, n.d.). However, according to Michele Romanov, the co-founder and chief executive officer of Clearbanc, a company that provides financial support for online retail e-commerce startups, the pandemic substantially stimulated the development of the e-commerce industry. In particular, the percentage of e-commerce sales went from 14% to 30% in ten months since the beginning of the pandemic, and this growth is equal to the period of ten years (Yahoo Finance, 2020). In addition, according to Romanov, the November 2020 Black Friday was unusual due to a large number of small businesses that won for the first time due to their operation in the sphere of e-commerce during the lockdown.
It goes without saying that peoples necessity to adapt to pandemic-related restrictions led to the rapid development of the e-commerce market. However, in the years to come, Romanov did not expect to see the same level of growth as the situation had stabilized. Nevertheless, she stated that e-commerce would continue to expand, even if not as impetuously as before. The pandemic led to changes in customer habits in other words, people got used to purchasing online, and their experience would contribute to the development of e-commerce in the future.
In addition, in the wake of the pandemic, advertising by smaller e-commerce companies has substantially changed as well, especially in relation to the platforms used. Thus, according to Romanov, Facebook has lost its popularity among small independent businesses due to its aggressive advertising policies, while Google Ads was up over 52% (Yahoo Finance, 2020). Moreover, small companies started to use TikTok in order to target young gen Z customers.
Advancement in technology has reshaped and revamped the way business is being done. There is a shift towards using internet as a platform for firms to carryout business. The advantages associated with this technology has left almost all business firms whether big or small in size to consider adopting it with the notion that it will help them stay competitive and relevant in the current world of business.
However, there is little knowledge these firms have with regards to both advantages and disadvantages of adopting e-commerce. This paper has identified the pros and cons of adopting e-commerce. The method used to arrive at the conclusion in this paper is through an analysis of secondary data from existing books, journals and internet sources.
It is apparent that since the inception of computers and internet, everything particularly on how business is carried out has tremendously changed. E-commerce is one of the fastest growing industries worldwide and is one of the most rapidly evolving areas of national and international trade.
Using internet to carryout business has been deemed to be the most current innovation in the world of business and offers an opportunity to businesses to carryout business through electronics. Firms have rushed to adopt e-commerce which entails making transaction online with the belief that it will help them gain competitive advantages and increase their market shares as well as revenue.
Indeed there are numerous advantages associated with this concept such as capturing new markets by allowing firms to go global, 24/7 operation this has been shown to bring with it the advantage of reliability and convenience which allows potential customers who do not have time to buy products and services regardless of time.
It is evident that e-commerce help firm cut the costs of doing business, for instance there will be less paper work which requires human resource, a flexible or telework arrangement can be put in place making working execute their tasks, duties and responsibilities not necessarily in the office among other advantages.
However, it is established that there are a host of drawbacks associated with e-commerce such as increase in criminal activities, ethical issues such as firing employees as a result of automating some tasks, technical issues, compatibility problems as well as legal implications.
For instance there is concern about increase in crime rates that are not easily detected, the real time production of goods and services have and will continue to create stock crisis, there is potential of loss of resources as well as underutilization of the same (people will lose jobs and rates of disposed equipment will increase), unavailability of power, ICT manpower, telecommunication facilities leaves some communities especially in third world countries at a disadvantage, social division and broken human interaction that creates and nurture trust.
Bases on these pros and cons of adopting e-commerce, it would be rational for businesses to critically examine them and develop better strategies to curb some of these drawbacks. Failure to give this concept a serious thought might be a recipe for an organization to fail.
Introduction
Since the advent of computers, mankind has experienced an unmatched surge in development of new and cutting edge technologies. Additionally the desire for organizational effectiveness as well as using it to attain competitive advantage has made the adoption of these technologies to be deemed paramount in ensuring that organizations do cut themselves an edge in this competitive business world (Sharma & Gupta, 2003).
However, there is need for each and every organization to deeply and extensively consult before embarking in rolling the entire project, this is important as it will dictate the success and sustainability of the project. One notable technology that has propelled a number of organizations to greater height is internet-e-commerce (Coulter & Vogel, 2004).
By definition, e-commerce has been thought of as a employing electronic communications and digital information processing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals (Bonnett, 2000).
The whole idea centers on buying or transaction via the internet. Generally speaking, e-commerce include; the business will effectively monitor it records, it will be competitive because potential users will be able to place their orders on-line as well as track the progress of the orders they placed, time is saved, it is reliable and convenient, the concept will offer the business an opportunity to reach wider markets, e-commerce will not only be used for transactions but also advertise a firms product among others (Karyn & Filson, 2001).
Outline
The paper has an introduction where the topic to be covered is succinctly brought to readers attention. Definitions of important terms are also presented. The problem statement is also clearly written down together with the objectives of the entire work. The next section is the main body tackling the impact of e-commerce to businesses. The paper begins with the positive contribution of the technology. After this, the negative effects are succinctly covered. The last section of the paper is the conclusion which entails a brief summary of the work done.
Problem statement
E-commerce is one of the fastest growing industries worldwide and is one of the most rapidly evolving areas of national and international trade. Using internet to carryout business has been deemed to be the most current innovation in the world of business and offers an opportunity to businesses to carryout business through electronics. E-commerce technologies have provided opportunities for business growth but have also presented the business world with many challenges (Nissanoff, 2006). It is worth mentioning that,
[E-commerce enables organizational change and helps organizations to conduct business with improved efficiencies and productivity. E-commerce is credited with empowering employees and knowledge workers, by giving them easy access to virtually unlimited information. E-commerce technologies have helped nations to accelerate their economic growth and to provide more opportunities for the businesses to grow.
Meanwhile, it has also created many challenges and adverse effects, such as concerns over privacy, consumer protection, and security of credit card purchases, displacement of workers (especially low-status ones), and is charged with having a negative impact on quality of work life.] (Sharma & Gupta, 2003, p. 655)
Objectives
The objective of this task is to critically evaluate the positive and negative impact for a business which adopts e-commerce in doing business. As noted previously, there is need to have this information in the public domain so that organizations are not misled that adopting e-commerce is a bed of roses.
This will be very important since it will help them make informed decision as well as prepare them in developing better strategies that can help them overcome the negative impacts of such technology. Similarly the paper will give recommendations to businesses that desire to adopt e-commerce.
Impacts of introducing e-commerce
Benefits of e-commerce
It is worth noting from the onset that just like any other business and for that matter a normal concept, there are both benefits and draw backs associated with introduction of e-commerce to any business organization. Therefore, the impact to the whole organization, consumers, current market and legal issues can be very dramatic (Kotler, 2009).
Nissanoff, 2006 believed that E-commerce if introduced in an organization might help a firm to segment its market better by utilizing the demographic characteristics such as age, gender, price, interest, tastes and preferences of its potential customers, information that is usually easily collected online.
This will help the firm to keep track of the required goods and the services, quantity, quality and the time of delivery. This in turn will shape how the business strategizes on production. It is worth noting that what this brings in elimination of the poor timing in production and possibly cutting down on wasting of resources and time.
Additionally, according to Kotler, 2009 e-commerce will cut down the cost of doing market survey. For the simple reason of adopting the innovation, paper work will be tremendously reduced. The later has no doubt been cumbersome, consuming a lot of time that can be utilized by the firm to doing other things that will upgrade their operation. With e-commerce, a business will be able to get various group segments directly especially via internet. This has come with low investment level but in turn high return.
It is also a fact that most customers critic some business concerning the products and services it offers. For this reason, the sensitization process that will be generated by online advertisement will make these customers to buy confidently in transacting with any business.
E-commerce has the potential of making a firm cut itself an edge and stay competitive even during economic hard times, as it can learn and promote its image to different market segment depending with their needs, thus promoting market expansion and consequently, high sales volume. It is evident that e-commerce will help an organization to reach to a wider market not initially thought of (Kalakota & Whinston, 1997).
Additionally, information gathered online concerning the desires of customers will aid the firm to be in contact with demand and supply curve hence always striving to stay competitive. This will be attained by novelty to have room for the needs and aspirations of customers from the ground. As a result of trying to meet these demands and needs, there will be room for the firm to develop new products to cope up with ever tightening competition in the business environment.
The ultimate outcome of this is highly satisfied who will be loyal to the firm which translates to doing business with them for a longer period. On the same note, there are higher chances of improved relationship between the firm adopting e-commerce and its customers. This will be brought about due to the multiple roles played by e-commerce (advertising and publicizing) (Bonnett, 2000).
The reason for this is that customers will be provided with all necessary information regarding products and services available, information on progress on orders placed as well as deliveries. Such a relationship will definitely result in a better relationship between the two that might lead to more market segmentation as well as customers satisfaction hence a potential to develop into a global market.
On the same note there are organization such as Amazon.com among other that have adopted this technology in ensuring that delivery of placed order is quick hence reaching customers on time. This in itself is a competitive advantage. In most cases the products are delivered in at the customers door steps.
On the same note, e-commerce carries with it the advantage of doing business around the clock, 24/7. With this come the concepts of convenience and reliability. It is worth noting that doing business around the clock will attract more potential customers especially those who do not have time to physically come to the offices to place an order.
The implications of this is that more revenue will be generated and at the same time widening customer base. Additionally, the business can benefit by using the whole idea as an alternative source of income. Similarly, a firm that adopts e-commerce can be provided with an easy and very flexible opportunity to maneuver pricing issues.
Mass customization and network production can be made possible by adopting e-commerce. After capturing a global market, a firm can parcel out some production processes to other firms that offer goods and services similar to it. The advantage that will be realized as a result of this is reduced cost, increased strategic target marketing as well as facilitated sell add-on goods and services when need arise.
Another positive force brought forth by introduction of e-commerce may be the link it creates among customers, employees of the business, competitors, suppliers and distributors. The association will be effective if there is a clear supply chain management which will in the end boost sales.
It has been shown that in traditional environment of doing business, it was difficult and cumbersome for a new entrant or a small firm to conquer other geographical locations. However, when a firm adopts e-commerce, this gives it a perfect opportunity to compete globally since there are no geographic boundaries. The only thing a firm needs to do is to develop a well thought and managed website where its products and services can be accessed. This will help even small firms to gain competitive advantage and increase their market shares.
Draw backs of e-commerce
Legal implications
On the other hand, there is need for the business especially if it operates in the United States to carefully evaluate the associated legislations such as the copyright legislation, computer misuse act 1990, trading standards, delta protection act of 1998, freedom of information act of 2002 as well as e-commerce regulation.
This does not mean that other businesses in other geographic locations are exempted. There is also need to adhere to international laws and regulations concerning usage of e-commerce (Miller, 2002). A clear understanding of this legal provision is key in ensuring that any emerging legal issues for instance differing prices advertisement can be handle with clear precedent.
It is worth noting that failure to follow a number of government provisions might land businesses which have adopted e-commerce into serious legal battles (Chaudhury & Jean-Pierre, 2002).
Ethical issues
As suggested by Coulter & Vogel, 2004 with the introduction of e-commerce, managers and line supervisors will be faced with very serious ethical issues that need to be addressed in time. One notable issue is what a firm will do with those employees for instance who work on business paperworks now that most of the things have been automated.
Additionally, another issue linked to this is addressing the issue of resistance as well as employees who are difficult to be retrained so that they fit into the system. This is costly and laying them off can imply legal battle on the basis of the contract signed between employees and their employer (Kalakota & Whinston, 1997).
Similarly, issue of confidentiality in using e-commerce will be highly compromised. The is a higher chance again of the business to utilize information technology to closely monitor all activities of its customers as well as workers which amount to invasion of human privacy. It is also a fact that surfing the internet is an interesting as well as time consuming, there is a possibility of an employee to surf during work time which can jeopardize the efforts of adopting the innovation (Mellahi & Johnson, 2000).
To control this, there will be need to limit the kind of information accessible through the internet. This in turn might negative impact the moral of the workers. In recent past, there are cases reported where hackers get into businesses data bases and obtain full details of customers (Chaudhury & Jean-Pierre, 2002).
They later use these details to steal money from unsuspecting customers. This they do by sending customers mails which are fictions for instance one might be told that he or she has won a price and needs to send some cash to a certain bank account. Similarly, with advancement in technology, there are those who after acquiring the full details of customers, hack their bank accounts and transfer money to unknown accounts (Eisingerich & Kretschmer, 2008).
Trust and human contact
Although adopting e-commerce sounds heavenly send solution to doing business in the 21st century, Lefebvre et al 2001 note that there are very serious issue regarding customer trust and lack of human contact while carrying out transaction might be a blow to the desires of any firm which seek to have a direct contact with its customers.
It is human nature to interact while doing business; this usually fosters the concept of building customer trust. Although the current generation is capable of living up to this kind of idea, the older population is yet to embrace this kind of technology and they still prefer the human contact (Wyckoff & Colecchia, 2000).
It has been argued that online communication can never be a substitute to face-face interaction. Additionally in situations where there are serious complains, there is no perfect opportunity like face to face interaction. Here the complaining party can gain full understanding of the issue at hand which cannot be attained through online communication particularly when the other party is agitated (Laudon & Traver, 2010).
It is worth mentioning that there are a group of people who will resist doing business through this kind of platform and will prefer doing business the traditional way. The major reason why people resist using internet to transact is due to lack of adequate knowledge on how the system works as well as reluctant to buy a product that cannot be physically examined.
As a result, this will call for the firm adopting this kind of technology to set aside funds that will be used to educate potential and willing consumers so that they become confident in using e-commerce. The problem with this is that the firm might incur extra cost and still the group refuses to change.
Technical problems and emerging innovation
Having in mind that changes are always part of human life, advent of new technology will always present a challenge to the business. There are chances that after adopting the innovation, a new one is developed rendering the one adopted to be obsolete leading to a financial draw back especially if the entire project has not repaid the money invested in it (Seethamraju, 2006).
Technical hiccups can also hit the innovation and this might include failure of the web site, problems with the surrounding environment, failure in power systems, failures in hardware and software as well as virus attacks (Bonnett, 2000). When the later happen, it is risky for the business since it can loss all its viable data in case it has not backed it up.
Compatibility problem
Since it is everybodys anticipation that there will be development of further technological innovation, the business might face problems with compatibility of its old and the emerging innovation. What this will imply is that there will be instances where sharing of information is hindered which will call for installation of entirely new system which will have huge financial implication to the business (Eisingerich & Kretschmer, 2008).
Impact of e-commerce to the entire society
Among the societal implications of adopting e-commerce in doing business are; it has fostered creation of a flexible working environment. This has in turned led to improved quality of life making people to work from their homes. The advantages of this working scenario not only include convenience but also offer a conducive environment to take part in activities that aid in generating revenue.
Similarly, working from home help reduces traffic congestions as well as cutting down air pollution (Bonnett, 2000). Additionally this helps the firm cut down on operation costs in terms of space, power, and food to employees among others
Consequently, people are interconnected which makes sharing of information to be very easy and quick thus making the entire society to make informed choices before engaging in business transactions. Additionally, there is an economic as well as social impact as a result of the rate at which changes occur.
On the same note, e-commerce has facilitated quick delivery of public services for instance plumbing services, banking services and more importantly health care services. It is also thanks to e-commerce that it has been possible to fill tax return forms on line and submit them on time (Seethamraju, 2006).
On the other hand, there are drawbacks that the society has experience as a result of adopting e-commerce. According to Kalakota & Whinston, 1997 these include increase crime rates that are not easily detected, the real time production of goods and services have and will continue to create stock crisis, there is potential of loss of resources as well as underutilization of the same (people will lose jobs and rates of disposed equipment will increase), unavailability of power, ICT manpower, telecommunication facilities leaves some communities especially in third world countries at a disadvantage, social division and broken human interaction that creates and nurture trust.
Conclusion
It is apparent that since the inception of computers and internet, everything particularly on how business is carried out has tremendously changed. Using internet to carryout business has been deemed to be the most current innovation in the world of business and offers an opportunity to businesses to carryout business through electronics.
Firms have rushed to adopt e-commerce the belief that it will help them gain competitive advantages and increase their market shares as well as revenue. Indeed there are numerous advantages associated with this concept such as capturing new markets by allowing firms to go global, 24/7 operation, cutting costs among others.
However, it is established that there are a host of drawbacks associated with e-commerce such as increase in criminal activities, ethical issues such as firing employees as a result of automating some tasks, technical issues, compatibility problems as well as legal implications. Thus businesses need to critically examine the concept of e-commerce and develop better strategies to curb some of its drawbacks. Failure to give this concept a serious thought might be a recipe for an organization to fail.
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