Posted: August 13th, 2013
Incorporation of E-commerce in Businesses
Incorporation of E-commerce in Businesses
Aim: The effect of e-commerce on the business’ operations and the advantages of its adoption. The study will focus on various changes that have occurred because of e-commerce and the various aspects of e-commerce. With the emerging trend of electronic transactions, we will research on the number of businesses that have adopted the trend and why they think it is beneficial to them. Those who have not adopted the trend yet will be required to give their reasons for their action. The research should highlight the importance of e-commerce to the economy and the transformation of business operations over the years since the introduction of e-commerce to the business world.
Data Collection Methods
Documents will assist in the research to determine the business processes and performance.
Interviews will help in determination of the effects that electronic transactions have on the normal operation of a business and the perspective of the employees towards e-commerce.
The information collected will help in drawing conclusion of the research proposal.
The research of this subject is evidently crucial for businesses since many businesses have incorporated it in their operations. This is due to its beneficial impact. The research will help in appreciation of the role played by the emerging trend in the business world that has tremendous effects on the growing economy.
The proposal includes an introduction to the research and the content of the proposal is based on the various modes of e-commerce and its various aspects. The advantages and disadvantages also feature in the research to analyze the pros and cons of e-commerce. This analysis will help in deriving an informed conclusion about the effects of e-commerce on the businesses.
E-commerce refers to a variety of transactions for products carried out through the Internet. These activities occur electronically and hence there is no physical interaction required for the transacting parties. E-commerce is associated with the buying and selling of commodities across the Internet by businesses, which make the transactions easier. With the introduction of the wide world web in the 90s, e-commerce was established and the various improvements made on the telecommunication sector have greatly promoted its use. Currently, anyone can transact through the Internet at lower costs unlike years ago when the services were expensive. The availability of Internet services to businesses and individuals has promoted the adoption of e-commerce as a source of supply for the customers and a major outlet for businesses. E-business is an emerging trend that is confused with e-commerce. E-business involves operation of the entire business operations online while e-commerce involves transactions such as buying and selling electronically.
With the increasing popularity in the trend of e-commerce, it becomes a subject of research in attempt to determine the level of influence that technology has on business operations. It is evident that technology greatly affects various aspects of human life. Personal lives have experienced the great influence of technology due to the growth of social networks that are slowly becoming the main communication channel since physical interaction is experiencing major challenges. The busy lives that globalization has forced us to live do not allow to waste time and hence it is necessary to manage the available time. E-commerce exists for this reason and, therefore, many businesses have found it beneficial to incorporate it into their business operations (Singleton, 2001, p. 10).
E-commerce has various models, some of which include:
This involves the transactions carried out businesses. One business offers its products to the other and the transaction ends with the money settlement. This type of e-commerce continues to expand significantly due to its beneficial nature. Businesses exist for profit motive. If a business can acquire its raw materials more conveniently, the option is beneficial to the business. If a business can market its products and make sales over the Internet, then e-commerce becomes beneficial in this context too. B2B is the major form of e-commerce and offers the widest market for the products (Singleton, 2001, p. 112). The components of B2B include e-frastructure and e-markets. The e-frastructure assists the efficiency in provision of services while e-markets assist the interaction of the buyers and sellers.
It includes the transactions between businesses and consumers. The consumers gather information about the companies and the products offered for sale. The information helps in making an informed purchasing decision by choosing the best products on sale and their respective prices. This form of transactions allows direct interaction of the company and its customers hence gives the business an opportunity to improve it corporate image.
The transactions carried out occur between the businesses and the government agencies. The government purchases the services and goods offered by the business organizations in order to have sufficient supply for its citizens. The products of trade in this case are the requirements of the public sector for its operations.
This involves exchange of computer services to other networks. It facilitates peer networking.
In this form of e-commerce, the consumers interact with other consumers to gather information concerning the opinions and expert knowledge of the products offered online.
Fuels of E-commerce
E-commerce has greatly influenced the economic growth of the businesses that have incorporated it in their operations. This is due to reduction of marketing costs, communication costs, and other incidental costs. The speeds at which transactions take place have greatly increased and it has become easy for the businesses to get potential suppliers. The efficiency that results is due to the economic integration through the Internet. The efficient communication networks greatly facilitate communication within the business organizations and the external communication to the suppliers and customers.
E-commerce provides a wide platform for businesses to market their products. It, therefore, creates an opportunity for them to make their products known to potential buyers and enables interactions with potential buyers interested in the commodities. Information about the companies and their products is availed through e-commerce that has promoted its use by many businesses.
Technological advancements are the main accelerators of e-commerce. Technology allows the conduction of business across the Internet without the requirements of physical interaction. Efficient communication networks and low technological costs have promoted the use of e-commerce by businesses.
Positive Effects of E-commerce
Reduced cost of production is a major advantage of using e-commerce in transactions. The business can acquire potential suppliers online without having to look for them. A variety of suppliers is available and there is evident competition of the suppliers in supplying their products at the least price possible. The competition among the suppliers is beneficial to the business since it acquires the raw materials at the least cost possible.
Increased market base for the businesses is evidently a major effect of employing e-commerce (Lee, 2012, p. 189). It is easier and less expensive to market products through the Internet than through any other form of marketing. Currently, many people use the Internet and it is, therefore, easy for them to get information about the products. Placing adverts on the Internet incurs fewer costs than using marketing methods such as billboards, which require high costs. Marketing through the Internet reaches customers from all parts of the world hence the market base of the business expands to the global market. Therefore, sales increase and the growth of business is experienced (LexisNexis & Thomson, 2002, paragraph 5).
The nature of e-commerce allows the small and medium sized businesses reach the global market. Without e-commerce, the access of small business enterprises to the global market becomes very difficult. E-commerce does not discriminate against the businesses in terms of size since all the businesses acquire the same platform of marketing themselves.
E-commerce provides a wide variety of products to consumers. Consumers gain the power of choice from the wide variety of products offered on the market. Access of commodities becomes easy for the consumer who does not need to go shopping physically. The transactions can occur regardless of the location of the customer.
E-commerce saves on time since it makes it easy to identify potential buyers and sellers. The potential buyers do not have to spend much time looking for available products in the markets while the sellers do not have to market their products physically. E-commerce makes transactions faster by bringing together potential buyers and sellers helping them transact easily.
E-commerce ensures information availability by posting the relevant data about various businesses and their products on the Internet. The knowledge of the businesses and their corporate image is available for the customers and other people willing to do business (Singleton, 2001, p. 121). Credibility of a business publicized through the Internet and other customers can share their experiences with various businesses. The information enables customers make wise choices on the products to buy and the businesses to deal with. The information enables credible transactions to occur over the Internet.
Negative Effects of E-commerce
Despite all these advantages, e-commerce is associated with some key disadvantages, which include:
Security in conducting business is the major concern of the people transacting over the Internet. E-commerce does not guarantee security in transactions. Many credit card frauds emerge as a result of electronic transactions. The insecurity has tainted the confidence of the customers on the mode of trade (Fazlollahi, 2002, p. 21). The high usage of technological devices in transacting has made confidentiality of information impossible. Lack of confidentiality gives way to fraudulent activities especially activities involving money. Caution has been a trait learnt by the customers who fear losing their money in the process. The issues of security in e-commerce pose a great challenge since tracing of the offenders is difficult.
Lack of personal touch during transaction is a major setback for the transaction process. Customers feel more satisfied when their issues are addressed directly by the buyers. Physical transactions give the business an opportunity to interact with the customers, which makes them more satisfied and loyal. The lack of personal connection between businesses and customers leads to loss of loyal clientele.
E-commerce is very beneficial to the parties taking part in the transactions and not only the business. Many businesses have adopted the trend due to these reasons. E-commerce is a great promoter of the economy and this makes it an important practice. Despite the challenges that make some businesses skeptical of adopting the trend, they are not numerous compared to the advantages. Therefore, a cost-benefit analysis proves that e-commerce is more beneficial than destructive. Most businesses use e-commerce since it makes acquisition of commodities easier. This saves on the major efforts made on identifying potential sellers and bargaining on the prices. Time is crucial for a business since the more a business is able to plan it; the more likely it is to succeed. The low costs incurred in e-commerce make it more attractive since the main aim of businesses is to maximize profits and minimize costs. Since e-commerce fulfills these objectives, businesses prefer using it instead of the physical mode of transaction that is very costly.
The use of e-commerce has led to the emergence of electronic money transactions allowing the sender to send money from any location as long as there is availability of necessary devices. Customers can now make payments from their homes, which is an easy method of payment compared to the traditional modes of payments. A transaction cannot be complete without the presence of payment made by the buyer to the seller. Various modes of payment are designed to make payment easier for the buyers to improve the intended purpose of e-commerce, which is efficiency. These modes of payment have successfully played this role. Businesses should therefore, adopt the use of e-commerce in their transactions for efficiency.
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