Posted: September 3rd, 2013
Internet Impact on Business
The invention of the internet has revolutionized the human civilization in all aspects including culture, perception and even the corporate sector. Particularly, the internet has greatly facilitated globalization in the corporate realm since the business operation is not bound by government policies such as taxes and duties that mainly characterize business in the physical realm. It now evidenced that all of the major companies worldwide are internet companies. This means that these companies have websites of the own where business can be conducted across the globe as long as one can afford internet connection.
The inception of the internet influenced the global market through the introduction of E-commerce. Electronic commerce is whereby business entities get to conduct their business communication and transaction through the internet. In this way, the company communicates with its various stakeholders through the utilization of the interchange of electronic data for the facilitation of completing transactions. Business entities are now able to conduct entire transactions online whereby the consumer does not have to visit the premises for purchase. The firms display their commodities in the web pages whereby potential consumers can view freely, payments are also facilitated through internet facilities such as Paypal and commodity is shipped to the consumer. Airplanes companies have also adopted E-commerce whereby passengers get to book and pay for their tickets online.
The internet has also led to the availability of low priced commodities due to competition and its ability to minimize costs across the companies’ supply and demand chains. Retail stores no longer need to open up new stores in order to explore new global markets. The customers in these new markets only need to access the commodities sold by the retail stores and the necessary purchases can then be made. This means that the company does not necessarily have to incur additional costs such as the acquisition and setting up of premises, hiring of new staff and the like. The above costs that are forgone by the business entities are availed to the consumers in terms of discounts and reduced prices.
The utilization of the internet has also enabled the multinational business entities to overcome some of the trade barriers imposed by some of the nations. Globalization is seen as killer to small-scale local companies. In the process, states usually impose stringent legal barriers for foreign companies in the effort of protecting the local companies. However, through the internet, foreign companies are able to override these stringent barriers and avail to the consumer competitive products. On the other hand, the internet also tends to create a level playing field for all the business entities irrespective of their size or origin. When customers are perusing through commodities in the internet, their focus is primarily on the quality of the product and its price as opposed to the supplier. In the process, the business entities that get to offer products at the most competitive prices usually make the sales. However, the use of the internet especially in conducting has raised security and confidentiality concerns. This has also created an extra expense in the form of putting up security efforts to ensure transactions are and secure.
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