Electronic commerce - Essay Example

? E-commerce Electronic commerce essay The internet is among the most radical technologies that changes the business setting. The web has had an intense impact on the use of electronic commerce. The upcoming of electronic commerce, has resulted to the change of power to the consumer, this has led to changes in the way companies relate to the consumer. It has also resulted to a difference in the way the companies relate to each other. The increased use of the internet has been contributed to by the need to perform business on line (Baye, Morgan, 2001). Various companies have managed to place their products on internet servers, where they have managed to advertise even using virtual brochures. In order for companies to attain competitive advantage, the virtual market should be untapped so as to reach so the many internet users (Baye, Morgan, 2001). Electronic commerce is defined as the buying and selling of goods, services or information through computer networks using the internet. E -commerce offers new ways of doing business that no company can ignore. Electronic commerce has brought with it several benefits, and it is also extremely convenient. Some of the benefits of e-commerce include; shortened remittance time, companies have managed to easily promote their product, both consumers and the companies have saved on the cost; it has enhanced the provision of timely information. E-commerce has also ensured a consistent flow of information; better customer relationship, it has enhanced the customization of products, and it has also brought with it the convenience of doing business (Baye, Morgan, 2001). There are different policies that can be embraced in the development of an e-commerce site, they include; the informational or communicational strategy, and the online or transactional strategy. In the informational strategy, uses the web to support but not to replace the company’s business activities. In this strategy, the company does not just limit itself to marketing on the web. Instead, the company also considers other traditional media to advertise and market their goods and services, so as to achieve the intended goal. The informational strategy has been used in e-commerce today; this strategy has considered the use of the internet in marketing, so as to increase a company’s marketing arsenal. The informational strategy has proved to be productive for most companies. An example showing the use of this strategy is Insight Direct, where a discount computer cataloger marketing mostly to business, obtains only 10 per cent of its deals from its on-line collection; however, such a company manages to get more than more 75 percent new customers from the site (Baye, Morgan, 2001). Another strategy used in e-commerce is the on-line or transactional strategy, which normally uses an electronic catalogue of goods for sale. Those visiting the site can normally go through the catalog and purchase products online. Despite the fact that the informational strategy provides an electronic catalogue and ordering information, it does not enhance online business transactions. The informational strategy does not, therefore, exploit the ability of the web to be used as an interactive medium. The transactional strategy is what most consumers relying on e-commerce would expect. In e-commerce for a company to increase its overall performance, it is essential that the company establishes a website. This strategy may have a disadvantage, which is transaction insecurity. Online transactions have proved to be successful both for the small and medium sized companies. Such companies that have benefitted using this strategy include; the Virtual vine yards and Amazon.com. The use of the online transaction strategy has enhanced the growth of various enterprises; this is because the web has proved to be a potential money making vehicle that can be used in e-commerce (Baye, Morgan, 2001). The two strategies, however, have both advantages and disadvantages. The advantages of using the informational strategy include; the fact that this strategy ensures that large quantities of information is provided to customers. Another advantage is that this strategy, gives a company an instant global presence, and it attempts to attract people using the advertisements, despite the fact that some customers may be the companies target market, but can be potential consumers. The other advantage is that the strategy opens a new communication channel, which allows a company to develop further relationships with its customers (Baye, Morgan, 2001). The advantages of the on line strategy include; the provision more specialized varieties of goods than the company’s competitors. This strategy also ensures more economic benefits, increased quantity of information and more convenience than the competitors. It also provides a sense of community for the consumers (Baye, Morgan, 2001). The disadvantages of the informational strategy include; the fact that it only allows a company to market its products, but it does not provide a policy for the purchase of these products. This strategy is also disadvantageous because of the lack of feedback control, for instance if a consumer is unhappy about the goods and services rendered; he may not be in a position to react. Another disadvantage of this strategy is the fact that, consumers are normally kept distant from the products (Baye, Morgan, 2001). The disadvantages of the transactional strategy include; the fact that this strategy tends to attract Current Brand Users. This strategy of e-commerce normally tends to be time intensive; this is because somebody is normally required to monitor each network to enhance smooth transactions (Baye, Morgan, 2001). The preferred strategy that should be adopted by the guitar shop owner is the on-line strategy as it ensures more specialized varieties of goods than the company’s competitor. The strategy also ensures more economic benefits, increased quantity of information and more convenience than the competitors. It also provides a sense of community for the consumers (Baye, Morgan, 2001). The main security threats posed on e-commerce users include; Hackers, this refers to the people who can access a computer and use it for destructive reasons. The hackers normally gain access to data, after which they alter the website. The hackers can normally deploy viruses, and they can cause denial of service attacks, which normally prevent users from accessing the website. The main intention of the hackers is normally to access financial documents so as to carry out fraud (Baye, Morgan, 2001). The denial of service attacks is another security issue facing e-commerce. In this case, the website users are redirected to another site. The programs used by hackers include; Win-trinoo, Trinoo, and TFN. These DOS programmes have shown the ability to delay credit card processing. The hackers do this by flooding the site with useless traffic. To solve this, the e-commerce service providers should enhance open and detailed privacy policies (Baye, Morgan, 2001). The Trojans are the other security threat facing e-commerce; the Trojans tend to subvert encryption technology and security filters. The hackers normally install the Trojans to modify data and carry out forgery. The data required is normally collected using Trojan horses. This can then be used to cone people and their money. With the Trojans, the hackers can normally manipulate information across networks. This problem can be solved through the implementation of multiple security protocols (Baye, Morgan, 2001). The other problem that has proved to be a security threat to e-commerce is the virus. Viruses normally have the ability to destroy business data. The problems of the viruses are normally as a result of lapses in mac systems and PC lapses. This problem can be solved through the implementation of multiple security protocols (Baye, Morgan, 2001). The various online auction models that can be used by an e-commerce provider include; the electronic commerce site model, this model normally has a shopping cart and an online catalogue which normally enables a company to sell products online. Using this model a company can normally set up its own online store. However, online stores such as eBay’s can also be used. The advantage of this model is that the internet merchant accounts and the online packages are often included in the company’s online store package (Baye, Morgan, 2001). The other model is the sales letter e-commerce model; this model aims at educating consumers on the advantages of the products being sold. The model uses remarkably few pictures and focuses on long copy. This model tends to reveal advantage after advantage; therefore it normally involves a lot of scrolling (Baye, Morgan, 2001). The other model is the eBay Auction Model, using this model; a company can sell its goods using eBay’s auction system. The company only needs to register and fill the sell item form. This model is suitable for companies that have just started engaging in e-commerce. The eBay auction system has proved to be a cheap and easy way of selling goods (Baye, Morgan, 2001). The other auction model that is used in e-commerce is the Standalone blog. The advantage of this blog is that anybody can publish their work easily and cheaply. In this model, the advertisements are normally run on the blog page. The most popular blog is Google AdSense (Baye, Morgan, 2001). Service Business Website is also a model which combines a portfolio with a persuasive copy. This model tends to advertise for the abilities and aptitudes of an individual. They may include samples of an individual’s work. The other model is the Info- site which normally focuses on the presentation of information, concerning a particular topic. This model raises money through syndication and subscription. However, it can also make money through advertisements (Baye, Morgan, 2001). Another model is the Brochure Site, which resembles an online business card. It normally gives details of the business such as the name, the contact information and the goods and services sold by the business. This model is normally an online business model, which mostly makes money online. The model normally resembles an internet billboard, and it enables customers to get basic information about the business. The main purpose for this model is normally to offer service, and it does not focus on making money. This model has been used by businesses to create sites for conferences and trade shows (Baye, Morgan, 2001). Brand awareness and image building is another auction model used in e-commerce. This model provides rational information about an organization and its products. This model may normally signal its customers and competitors that the firm is at a cutting edge. Using this model, the customers can normally be motivated to engage in transactions through text messages. This model is normally suitable for both small firms and large firms (Baye, Morgan, 2001). The other model is the promotion model; this model normally represents an exceptional form of advertising, which tends to attract potential customers to its site. The main intention of this model is normally to attract potential consumers to the site. The model does this by advertising free gifts, so as to attract consumers’ attention. These gifts may take the form of software (Baye, Morgan, 2001). The info-mediary model is another auction model that is used in e-commerce. It normally enables consumers to access free internet, and consumers can also access free hardware and, as a result, the consumers provide information concerning their surfing and purchasing. This information provided by the consumers about their buying habits is normally useful to the company. Such information can normally be used to target market campaigns. This model can be used by companies to sell information to other companies. The model normally provides consumers with useful information concerning the web (Baye, Morgan, 2001). Another model is the mall model, which targets online merchants. Using this model can be effective if the model is combined with a generalized portal. The model normally provides marketing opportunities and automated transaction services (Baye, Morgan, 2001). The online auction model suitable for the guitar shop is the brochure site model; this model would be suitable for the guitar shop as it would ensure that the customer get the contact information they need. The model would also ensure the owner of the shop makes money online, and this model would also ensure the customers get the detailed information concerning the varieties of guitars sold and features of each guitar (Baye, Morgan, 2001). Bibliography Baye, M. R. and Morgan, J. 2001. Information gatekeepers on the Internet and the competitiveness of homogenous product markets. American Economic Review 91(3) 454- 474 Read More