Influence of E-Commerce on the Modern Business - Essay Example

The topic of this survey is the influences of e-commerce on modern business. It will include what is e-commerce, give the definitions of e-commerce and explain the different professional nouns, such as B2C, B2B, B2M, B2A/G, C2C, and C2A. After that, show the difference between e-commerce and traditional business and how the traditional business has changed today. Furthermore, give the development of e-commerce, show the important impacts of e-commerce, how e-commerce changed since the 1970s and what is the main trend of e-commerce in business in different periods. Moreover, it will talk about how e-commerce will influence the trend of modern business. In addition, this report will mainly focus on the definitions of e-commerce and the profession nouns and the development of e-commerce. On the other hand, it also will compare the differences between e-commerce, traditional business, and international commerce.

E-commerce is a new business technology that was developed in the 1970s (Rolf T. Wigand, 2001). It is comprised of electronic networks linking together suppliers, service providers, and customers with the business enterprises. It includes all kinds of business transactions that are participated in by individuals as well as organizations, making use of the computerized processing of data (Jobodwana, 2009).

All of us may have the European Commission has a specific definition of e-commerce: “Electronic commerce is about doing business electronically. It is based on the processing and transmission of data, including text, sound, and video. It encompasses many diverse activities including electronic trading of goods and services, online delivery of digital content, electronic fund transfers, electronic share trading, electronic bills of lading, commercial auctions, online sourcing, public procurement, direct consumer marketing, and after-sales service” (European Commission, 2011).

The beginnings of modern commercial activity are found in thirteenth-century Europe, particularly in Italy where trade began to flourish outside of the ancient feudal systems, and which spurred the profound transformations in the social, cultural, political, and particularly economic arenas (Baudel, 1985 in Heng, 2006). The political freedoms of the progressive and newly affluent city-states of Italy have given new impetus to commerce and innovation, from which the Renaissance movement eventually sprung (Hale, 1993, Robert, 1996, and Finer, 1997, in Heng, 2006). It was also at this time when, to hedge the risks taken by merchants in their overseas trade, some system of security contracts similar to our present-day financial derivatives such as options and swaps, had developed. These developments were testament to the blossoming of innovation, technology, and commerce was able to propel the city-states forward despite the constraints of the political system and the old monarchical set-up.

From the growth of the period, commercial institutions were set up, and modern-day practices began to emerge in the manner financial and human capital were raised, further ushering in the age of technology and rapid industrialization. When seen from a long-term perspective, the implications of these innovations had profound implications on society. It was also during this period of cross-ocean trade that the seeds of globalization first were sown.

Heng (2006) discusses the following effects that eventually led to electronic commerce in today’s context. They shall be briefly mentioned here:
- Capital resources and labor (human resources) were freed up from intermediary (non-productive) activities in the manufacture and production of goods and services, creating thereby a lowering of prices of these goods and services;
- A broad-based demand was stimulated which encouraged further production, expansion, and global trade.
- The emergence of large business firms and increased collaboration and dependency among them created a need for regulators, auditors, and rating agencies.
- New business models had been conceptualized as a result of observations of the inadequacies of older business models.
- Businesses were stimulated to enter into productive areas that had not been tried before, further continuing the innovative process.
- The banking sector underwent a transformation to cope with the new demands of a robust business sector (Heng, 2006).