How the Capacity of the Internet Has Changed the Way Companies Can Do Business - Term Paper Example

 Table of Contents page 1.0 Executive summary…………………………………………………………………2 2.0 Introduction………………………………………………………………………...3 3.0 Definition and discussion of concepts……………………………………………...4-6 4.0 Analysis of the websites…………………………………………………………....7-8 5.0 Comparison of the websites………………………………………………………...9 6.0 Recommendations for improvements…………………………………………….....9 7.0 Conclusion………………………………………………………………………….10 8.0 References………………………………………………………………………….11 1.0 Executive summary The internet has indeed paved new ways through which companies are doing business. The advent of the internet paved way for different types of e-commerce such as business-to-business, business-to-customers, customers-to-customers and business-to-employees. B2B is largely used by companies such as Alibaba Group while B2C e-commerce is used largely by companies such as LL.Bean. Online business transactions have increased the revenue generation in many companies worldwide. Geographical location of businesses is no longer a matter of concern to many companies because communication has been enhanced by the internet regardless of the location of businesses globally. Sales from the B2B transactions are also generated through the provision of a specialized service or product that is completely unavailable in the market. 2.0 Introduction The internet has transformed the manner in which companies do business. This has been necessitated by the extent of information companies are able to access and send as well as the exchange of business ideas over the internet (Rowley, 2008). The speed with which procurement, selling, marketing and many other business activities are undertaken has increased drastically as a result of the advent of the internet. Geographical location of businesses is no longer a matter of concern to many companies because communication has been enhanced by the inert regardless of the location of businesses globally. Online business transactions have increased the revenue generation in many companies worldwide. The internet has made it possible for B2B, B2C, B2G, C2C and B2E transactions to thrive because the internet has simplified how such transactions are carried out (Rowley, 2008). For example, a B2B transaction which involves large volumes of transactions and numerous exchanges of documents is made possible by the internet because large volumes of data are exchanged within a very short time. The transactions and business deals are sealed over the internet thus eliminating the hurdles encountered in manual business transactions such as delays in relaying documents and sometimes the loss of business documents (Rowley, 2008). The internet has also increased the competitive advantage of businesses by ensuring that products are delivered in time to the retailers and consumers because companies are able to get on-time information regarding the situation of demand on the ground before the companies stocks run out. The focus of this report is to explore how the capacity of the internet has changed the way companies can do business. In this regard, the specific purpose is to define and briefly discuss each type of B2B, B2C, C2C and B2E websites where the main goals of these websites and the principal elements included in these websites will be discussed. 3.0 Definition and discussion of concepts B2B is the short form for business-to-business transactions which involves business transactions between businesses such as manufacturers and manufacturers, manufacturers and wholesalers, manufacturers and retailers and wholesalers and retailers (to mention a few). According to Mitchell (2008) one of the reasons why many organizations have the B2B transactions is the large volumes of B2B transactions that characterize such businesses. For example, while an individual customer may but two pair of shoes from an online store, a business with several chains of stores may purchase more than 5,000 pairs of shoes from the same manufacturer of the shoes. This shows that the B2B transactions are the most preferred due to the large volumes of transactions that characterize this type of business. Mitchell (2008) observed that sales from the B2B transactions are also generated through the provision of a specialized service or product that is completely unavailable in the market. This is particularly the case of businesses transactions in the manufacturing sector where the manufacturers create and sell a completely new product that has never been into the market. For example, a company that manufacturer’s shaving cream may order millions of a specific type of plastic nozzle from another company but the consumers may not be interested in the plastic nozzle but shaving cream. Hence, B2B is a widely applied concept in the business world (Mitchell, 2008). Johnson (2005) held that B2C concept (business-to- consumer) refers to the kind of transactions that occur between the businesses and the consumers. For example, manufacturers of motor vehicles such as General Motors, Toyota and others may sale their products directly to the consumers without following a longer supply chain where wholesalers and other middle businesses are involved (Zhang & von Dran, 2000). In this regard, individual consumers buy their products directly from the manufacturer. It is important to realize that B2C businesses has been fuelled and necessitated largely by the internet which has made it possible for the manufacturers to link with global consumers (Johnson, 2005). B2C is a more recent phenomenon and it is the same as retailing electronically over the internet. It mainly consists of information searching, electronic shopping. Some of the popular products purchased over the internet include books, videotapes, tickets, computers and CDs. More recently, big companies such as Toyota, General Motors and others have also begun selling their product directly to the consumers meaning that B2C has become a common phenomenon in the business world (Johnson, 2005). According to Bruce, Haruvy and Rao (2004), C2C or consumer-to- consumer is another type of online commerce common in the contemporary business environment. It is also referred to as person-to-person which refers to the mode of transacting that involves individual people. Bruce, Haruvy and Rao (2004) noted that the internet has transformed C2C commerce significantly because consumers can buy and sell products from other consumers over the internet. A third-party is however responsible for sealing purchase and sale deals between individual consumers. Online auction is a common example of C2C commerce where items are posted in the internet for sale and consumers or purchasers bid for those items over the internet. A C2C commission or flat fee is charged by the third party who facilitates the C2C commerce. Bruce, Haruvy and Rao (2004) observed that C2C can be regarded as a contemporary form of flea markets, barter trade, swap meets and yard sales to (mention a few). Lack of mechanism for quality control in C2C online commerce has been pointed out as one of the limitation and hurdles involved in this kind of online business. C2C online business can no longer be referred to as a small business. According to statistics released in 2010 auction sales resulting from C2C online commerce reached $65 billion which was equivalent to one-quarter of all retail sales undertaken over the internet. Although, C2C online commerce has popularly been characterised by individuals (seller and the buyer) in the recent past C2C online business has also involved commercial companies. According to Dholakia (2005) C2C online commerce can be categorized in a number of ways. First, C2C can be categorised in terms of the location of carrying out business. The question here is whether the seller and the buyer physically meet to transact their business (Wonseok, 2003). Second, C2C can be categorized in terms of pureness. The question here is whether there are any other outsiders involved in the business transaction other than the seller and the buyer (Singh & Dalal, 1999). Collins (2003) defined B2E or Business-to-Employee as another type of online commerce which involves businesses and employees (Collins, 2003). In this type of online commerce an employee in a different organization can order products from the manufacturer such as cartridges, printers or computers electronically. In case of a large amount of order, supervisors must approve such kind of orders. Instead of the long bureaucratic channels used in the procurement processes in organizations, employees in the contemporary business organizations are given the power to make decision on small amount of orders that do not impact on the financial status of the organizations significantly (Rowley, 2008). Hence, B2E online commerce has substituted the old bureaucratic procurement procedures used in the past. 4.0 Analysis of the websites One of the 2 websites for analysis is Alibaba.com. Alibab.com is an example of B2B online commerce website. The company is Alibaba Group which comprises of different affiliates .It is a private company which comprises of online platforms that facilitate B2B business across the world. It facilitates both the payment and retail transactions and trade in different countries globally (Singh & Dalal, 1999). The company employees more than 20,000 employees in different cities of the world such as Hong Kong and different countries such as United States, United Kingdom, Japan, Taiwan, Korea and China. One of the affiliate entities that make up Alibaba Group Company includes Alibaba.com. The company sells a number of products. Some of the product groups sold by the company include computer software and hardware, personal care and beauty products, consumer electronics products, fashion accessories, food and beverages, chemicals, motorcycles and automobiles, machinery, school and office supplies, entertainment and sports equipments, leather and textile products to mention a few. The overall target market includes wholesalers, large-scale agricultural farmers, retailers as well as individual consumers. The overall aim of the website is to gain consumer trust and facilitate online sales transactions because each customer is required to sign into the website in order to become a registered member in the company’s database. It also aims at gaining consumer trust because it provides different alternatives that suit different needs of the customers. For example, the website has alternatives for buying products, selling products as well as alternatives for submitting any complains that customers may have regarding the transactions undertaken over the website. Security and safety of the customers’ transactions is also addressed in the website which contributes towards the trust and confidence of the customer using the website. The mechanism of contacting the company staff is also provided in order to facilitate transaction over the website. In order to facilitate online sales transactions customers are provided with a mechanism for following up on the prices of different items as they rise and fall on a daily basis. This makes it easy for customers to order their desired products when the prices fall. Such a screen shot such as Camera Lens US $21.83 shows the price of the camera lens today which facilitates buying and selling of the camera lens by businesses (Singh & Dalal, 1999). The other type of website http://www.llbean.com (Singh & Dalal, 1999). This is a B2C website which involves selling products and items directly to the consumers. The company is L.L Bean (L.L Bean, 2011). The company sells a number of consumer apparels. The apparels are gender categorised to enable individual consumers from different genders to search for their products in the appropriate location on the website. Other products sold by the company include outdoor gears such as camping and picnic gears. Camping products include shelters and tents, camp kitchen, first aid and emergence products, campfire fun (to mention a few). The typical market targeted by this website includes individual buyers or customers ranging from female, male and children. It also targets sporting people as well as camping and people on holiday. The overall aims of the website include reinforcing the company’s brands by providing an avenue through which customers can explore the diverse range of brands sold by the company. The other aim is to gain customer trust. This is made possible by the wide range of products offered on the website which gives the customers the assurance that whatever they need can be found here. Some of the screenshots of this website include Picnic Gear, Biking Gear for the Whole Family Camping Gear Men's Activewear, Active Apparel Active Footwe (to mention a few) (L.L Bean, 2011). 5.0 Comparison of the two websites The two websites discussed above meets the requirements of a B2B and a B2C websites. They provide online features required for retailing. For example, the first website is developed in a way that large buyers can place their orders and pay for the large orders through secure and safe means. It is also developed in a way that the big buyers such as business can shop for the products as well as their prices before placing their orders. The second website is also developed in a way that individual consumers female, males and children can shop for their products in different locations on the website which gives an individual customer an ample time to make a diverse selection of products without much confusion. The two websites have a common feature in that products are categorised so that buyers can spend little time to shop for the desired products before they place the orders for such products. 6.0 Recommendations for improvement The first website (B2B) should comprise of features and pointers of new products that have arrived in the market. This is because when such features are not shown then customers assume that all the products are old and out of fashion because they cannot see the products physically. The second website (B2C) should have features that show the prices of the products at any given time just like the B2B website. This enhances the sale of the products because the customers can make the timing when the prices are low and purchase as many goods as they desire. Conclusion It is evident that e-commerce which operates on different platforms such as B2B, B2C, C2C and B2E has increased the relevance of online business transactions in the contemporary business environment. This has been made possible by the advent of the internet which has facilitated the exchange of business ideas and increased business transactions over the internet. Alibaba Group is one of the companies that have largely applied e-commerce on the B2B platform through the Alibaba.com website. LL.Bean is another company that has largely applied e-commerce on a B2C platform to undertake online sale of its products. Indeed, the internet has changed the way companies are doing business by enhancing the speed with which transactions and payments are effected in the online business process. Woks Cited Bruce, N., Haruvy, E., & Rao, R. Seller rating price and default in online Auctions. Journal of interactive marketing, Vol 18, Number 4, 2004. Collins, C. The many flavours of E-commerce. 2003. http://www.accountingsoftwarenews.com/ec/ectypes.htm Dholakia, M. The usefulness of bidder’s reputation ratings to sellers in online auctions. Journal of interactive marketing, Vol 19, Number 1, 2005. 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