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However most of the companies are still struggling to identify the best approach for establishing and conducting the business in the digital economy. Some of the companies are entirely moving towards Web, while some others are establishing subsidiaries and then converting it to separate entities dealing in online business (Gulati and Garino, 2000) and some others are looking for merging up with other online start ups. In simple terms there is no such prescription or model that helps to establish an e-commerce business in a particular industry. This is due to the fact that the industries are now fast moving since they are operating under an entirely different working rules and principles of the digital economy. E-commerce signifies a paradigm shift and not just another way that helps in enhancing and sustaining the business practices. It signifies a disruptive innovation that has changed the traditional ways of conducting business. 1.1. E-commerce as disruptive innovation The concept of sustaining innovation and disruptive innovation or technology was introduced by Bower and Christensen (1995). According to them sustaining innovation or technology are those that enhance the performance of the product or business operations, while on the other hand disruptive innovations are those that initially cause degradation in the business but promises to exhibit greater potential in the near future. There are two visible characteristics that can be found in the businesses that undergo technological changes. Firstly, they present a complete set of different performance attribute that may not be valued by the existing customers. Secondly, the performance attributes which are valued by the existing customers are seen to improve at such a rapid rate that the new innovation or technology can occupy the existing market. However, the practices in the e-commerce business cannot match the key performance attributes of the traditional business model. For instance, the security and privacy that is present in the business-to-customer commerce, the capacity and robustness that are present in the system of electronics data transfer in business-to-business commerce. However there are many technological innovations that help in improving the disruptive technology’s key performance attributes. For instance, the “streams of incremental innovations in certificate signature technologies will eventually replace the current secure socket layer technology to improve online transaction security” (Lee, 2001, p. 350). The performance attributes that are associated with disruptive innovations and does not gains support from the customers at their commencement are assumed to rise along a steep trajectory and satisfy the requirement of the mainstream customers through a stream of sustained innovation. For example e-commerce helps in reducing the transaction cost of both the suppliers and the customers and ensures that the information reaches to a large number of consumers without affecting the richness of the content (Evans and Wurster, 1997). 2. Reasons for failure of E-commerce 2.1 Lack of strategic direction A “spray and pray” approach is adopted when a strategy is improperly accounted. This situation includes when the website designed by a business fails into engaging the customers that they are targeting or meet their expectations. Like all other business strategies e-commerce strategy also requires planning, research and execution in order to deliver the right business objectives and needs of the customers. The business is expected to adopt some strategic
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8 Pages(2000 words)Literature review
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