Electronic commerce and its benifits

Introduction

Electronic commerce a term describes as the trade of commodities and services using electronic mediums like Internet. E-commerce is a concept which was not in practice just a decade ago but now this trend has gained popularity amongst organization to develop internet based operating tools in order to conform to their business strategies (Christopher, 2005).

In recent years, many new e-commerce companies have challenged the traditional retailers and other service providers, acquiring most of the market share. This trend has seen the established players to invest in their own e-commerce websites or a new strategy to gain market share. Now organizations develop online systems to perform their business operations including better customer relationship management, supply chain management and main operations of the business. E-business helps not just organization to grow their business but it benefits the customers to utilize the services and make their purchases from the company from their homes.  E-business is beneficiary for the organization to protract its position in the growing market and stand against any threat of new competitor in the market (Ashrafi and Baghdadi, 2008). As technology is evolving rapidly nowadays, there is no way other than establishing e-business facilities to increase market share and strengthen customer base (Christopher, 2005).

With the massive opportunities there with the e-commerce business model, some challenges are also associated with it. To implement an E-business plan effectively, it is far much important to develop a strategic plan as to how e-business activities would be conducted and how business would work on internet (Ashrafi and Baghdadi, 2008). As sophisticated technology and professional expertise is required for designing an e-business model, it is significant to have a viable framework for the whole procedure which is then put into real practice (Christopher, 2005). Virtual establishment of business enables an organization to optimize demand forecast, process orders properly and manage distribution channels and make decisions accordingly.

This research will focus on three aspects:

·         Opportunities and challenges of setting up a new e-commerce business model

·         Opportunities and challenges for converting an existing retail business model to e-commerce market place

·         Feasibility of keeping both a retail outlet and electronic business

Aims and Objectives

In light of the research questions posed, the objectives and aims of this study are:

·         To review the current developments in the e-commerce marketplace.

·         Investigate the research questions by showing empirical evidence from different organizations

·         Validate the literature by referencing knowledgeable stakeholders for this topic.

Research design and Methodology

The design of this research makes use of qualitative paradigm to aid the  objective of this document and formation of theory. Empirical evidence was acquired from different practitioners of e-commerce to a point where it was enough to develop an analytical review. (Benbasat, Ives & Piccoli)

A total of 20 interviews were conducted from multiple businesses. Furthermore four case studies were prepared using information taken from a business website, business documentation and field notes. The data was collected and analyzed with hermeneutics and reflexive interpretation. This was an iterative process that leads to similar results, creating an informed pattern of results. With the help of these findings the document demonstrates the opportunities and barriers in the e-commerce market place.

Importance of this Document

The document demonstrates with the help of case studies the success stories and the opportunity for growth in the field of e-commerce. So both local and foreign business personnel can benefit from this research and might be inclined to shift their existing businesses by integrating e-commerce or create new e-commerce businesses as most of the countries already have the technological infrastructure and the commercial capability of the Internet is always growing.

The research also highlights the barriers and disadvantages of taking such steps and how these barriers can be overcome. This document gives all the ‘pros and cons’ of setting up a new e-commerce business, converting an existing one to an on line one or keeping both a physical outlet and also taking advantage of an on line methods. (Garrity, Glassberg, Kim, Sanders & Shin, 2005)

The academic community would also find this research very useful. There has been an ongoing debate on success and failures of the e-commerce market place. This research uses a fragmented approach to demonstrate all the key components accounting for the success and failure of e-commerce. And also observes the general trend with respect to geography and economy.

GROWTH OF E-COMMERCE:

E-commerce has altered the scenario of a business is demeanor by the use of computer networks. In recent years, the advancement in computer technologies and the telecommunications sector have made computer networks an important and influential component the economic setup. The trend is to favor more and more transactions over the Internet. The advertising campaigns have been made as such to aim every computer vendor has an Internet connection. Researchers suppose business-to-business transactions generate good revenue in the e-commerce marketplace, but the major share of e-commerce holds specifically in developed countries like England and The US is generated from the transactions between consumers and businesses. The growth of e-commerce is directly attributed to the multiple benefits it provides to the customers in form of giving them a wide range of goods available at lower costs and help save a lot of their time. Now purchasing can be done from the comfort of home or office, and it is this ease and leisure that has enabled the progress of the e-commerce trend. Now hotel room booking, payments of utility bills, ticketing (bus, shows, and airways) and even banks are making use of online transactions. And with the availability of these services, e-commerce has created a new marketplace of its own and the consumers have indeed benefited tremendously. Many theorists are of the judgment that e-commerce will increase exponentially in the future. It is considered that business to business transactions will definitely increase but the field of online vending will also progress. All online businesses like grocery shopping, entertainment, travel services and financial services are all predicted to establish themselves as a need of the people rather than just a facility. (Kraemer, 2006) 

Even in developing countries like the Indian sub-continent or some African countries, e-commerce proffer with enormous opportunities. E-commerce in the under developed countries is in a emerging stage, but researchers, even the most- gloomy ones, foresee a boost in the foreseeable future. There are a lot of factors aiding this theory, such as the continuously lowering costs of laptops and personal computers, more Internet users emerging, competition between the various internets services providers have all accounted for the growth in e-commerce in these countries. Amid all the Asian countries, the e-commerce blooms highest in India between 1999 and 2007. The population of India (second largest in the world) gives a lot of emphasis on the growth of e-commerce market. Theorists have forecasted that India will generate round about 70 million Internet users by 2011 and that the latent Internet market will cross the number of 57 million households by the same year. According to a research report by McKinsey-Nasscom, in the year 2009, e-commerce trade of commodities in just India is predictable to reach around the $100 billion mark. One of the causes for that in India middle class is around the 300 million people, which is larger the U.S. consumer base. This, fact  along with great work done in improving the transactions of the e-commerce market place (in terms of delivery and payment services) makes India and similar developing countries a very eye-catching opportunity for the growth of e-commerce. Even though there has been a clear increase in the number of organizations opting for e-commerce in  recent years, some challenges still need to overcome for the developing countries to replicate the growth made in the e-commerce by the countries in the West. There is diversity in the range of products but challenges such as small credit card population and varying policies adopted by the credit card companies make payment difficult. Even liberation of products to customers by private couriers or postal services has been very erratic especially in small towns and rural areas. However, in recent years it has been seen that more and more Banks in the developing countries have started offering of Internet banking in place for the improvement of e-commerce community. Even the post and courier system has seen a lot of improvement just in the last two years. Protection against fraud and theft has been minimized with the advent of the secured socket layer system over the Internet. And people have become more comfortable sharing their personal information over the Internet than a few years ago. With such patterns business to business relation as well as business to consumer relations has blossomed over the Internet. If the progress of the e-commerce market continues in its present state than researchers have no doubt that soon even the developing counties would hold a major share of the global e-commerce market. (Laudon & Traver, 2004)

While many organizations, societies and companies from all around the world are starting to make use of the impending of e-commerce, some major confronts still require to be conquer for masses becomes a part of this global phenomenon. (Laudon & Traver, 2004)