The Effects of E-commerce on the Global Market - Research Paper Example

? The Effects of E-commerce on the Global Market Lecturer: Outline Introduction 2. Competitive advantage and cyberspace a. Internet offers several benefits to firms like cost/efficiency savings and accessibility b. Internet offers access to global customers 3. E-commerce offers small and large firms equal footing in global competition 4. E-commerce influences production and service in firms 5. E-commerce offers cheap, easy and fast mode of international marketing a. Offers increased specialization b. Offers standardized marketing strategies 6. Networks in E-commerce create two forces a. Homogeneous and Heterogeneous forces that complement each other 7. Conclusion Introduction Since mid-20th century when e-commerce emerged, it has grown rapidly with the largest market share being the US, Europe and other developed nations. Development of e-commerce initiated the growth of many e-commerce enterprises that created convenient online trading platforms that connect thousands of global traders as well as local traders in business. As a new channel, e-commerce is constantly changing the mode of trade, influencing cost, efficiency and value of trade; hence, having more impact on international trade. Various studies show that e-commerce influences international trade not only by making trade more convenient but also decreasing transaction costs. As technology advances and transport costs decrease, the costs of commerce have experienced tremendous change, and as global e-commerce and international trade become convenient, connection between buyers and sellers has increased making negotiations easier resulting in increased volume of trade. The impact of e-commerce on global economy is far reaching since it has a profound effect on businesses that have branches all over the globe. E-commerce is powerful compared to the traditional resources because with the aid of e-commerce people can shop online regardless of their physical location. Therefore, e-commerce has succeeded in removing geographical barriers, which allows customers to contact vendors without hassles that were prevalent in the traditional way of doing business. e-commerce has brought drastic change to the traditional market and has been overwhelmingly accepted since it clicked with many businesses and currently businesses cannot exist without e-commerce. Moreover, e-commerce has influenced international trade by helping many small enterprises because they no longer require physical office, which caters for certain geographical location. The influence of e-commerce on global economy is huge such that target audience can be accessed without wasting economic and time resources since target market can be accessed with the help of efficient online marketing strategies (He, Li, Wu and Jiang, 2011). E-commerce influences everything from production to service levels many company engage in doing business and the significant change is here to stay. Businesses that embrace e-commerce face the challenge of staying ahead of competitors with the changing technology; therefore, businesses have to wield the power successful marketing in order to have an edge in market competition. Global e-commerce also affects developing nations and helps bring them to the forefront in global trade and commerce and since e-commerce crosses economic and political barriers it result in effective marketing techniques. E-commerce has various benefits and works wonders for small and large businesses because with e-commerce techniques enterprises have the ability to increase sales and profits (He, Li, Wu and Jiang, 2011). E-commerce, through distribution channels offers markers easy, cheap and fast way of targeting market segments because there are few intermediaries involved in e-commerce distribution channels. Moreover, e-commerce for international marketers eases vendor specialization because e-commerce accommodates high specialization that would be economically difficult in the physical world. As well, standardized marketing strategies are benefits associated with e-commerce, which makes marketing easier. E-commerce favors international marketing because it makes it cheaper, which makes enterprises use it in combination with other traditional forms of marketing. Apart from making international marketing easy and cheap, e-commerce also makes international marketing fast because with a mouse-click products are visible and transactions are executed. Although, e-commerce offers opportunities for international trade and marketing it also creates obstacles visible in distribution channels. The main obstacles that have resulted from e-commerce include difficulties of maintaining effective security and the availability of cultural barriers (Rosamaria, Anand and Xiaowen, 2006). Elements of networks created in e-commerce and the frictionless markets develop two forces that include network effects pushing for homogenous approach in hardware and software systems for developing e-commerce. However, low economic frictions allow great heterogeneity in products and services offered over the internet and the way production takes place, and regardless of the forces seemingly in opposition they actually complement each other. The capability of the internet to decrease friction during entry and develop unique products means heterogeneous preference for local as well as global consumers and enterprises can be satisfied. E-commerce increases speed and elasticity of the purchasing procedure and enhances physical reach of communication compared to the traditional media. The internet makes distance irrelevant, which means that firms no longer need to establish physical presence in geographical areas in order to do business but rather rely on courier services to handle tangible products. E-commerce cost structure and flexibility allows it to adapt to the market making it superior to traditional establishments since e-commerce offers many advantages in the global trade like access to a wide potential market (Mann, Eckert, and Knight, 2000). In conclusion, e-commerce is powerful and has its impacts both on businesses and consumers across the globe because of its flexibility and cost effective saving. Even though e-commerce is a new method of conducting business, it holds huge potential since it means the elimination of middlemen and routine business activities like ordering supplies. E-commerce transforms the marketplace since it influences the approach to business like replacing traditional intermediary tasks and development of fresh products and their markets. E-commerce has catalytic influence since it serves to hasten and spread changes that are within the economy like one-to-one marketing that accelerates e-commerce. Moreover, e-commerce vastly increases interactivity in the global economy since linkages extend to small businesses and households and reaches the whole world. In a global-knowledge based economy, the role of universal e-commerce characterized by “death of distance” plays a significant role in international trade. The key economic influence of e-commerce remains its beneficial impact of reducing company production costs, which is a key factor that spurs the use of e-commerce within businesses since e-commerce poses high productivity gains. References He, Y., Li, J. Y., Wu, X. P., & Jiang, J. J. (2011). Impact of e-commerce on International Trade – Based on an Iceberg Cost Model. International Journal of Trade, Economics, and Finance, 2(3). Mann, C. L., Eckert, S. E., & KnighT, S. C. (2000). Global electronic commerce: A policy primer. Washington, DC, Institute for International Economics Rosamaria p., Anand M. & Xiaowen R. (2006). International marketing. Retrieved 20 September 2013 from http://lostlagoon.info/Professional/ecommerce.pdf Read More