The Internet Technology to Traditional Business - Coursework Example

Running head: E-COMMERCE E-commerce Affiliation November 2008 The application of the internet technology to traditional business and administrative activities has introduced considerable advantages and facilities that have given a new life to the business. The purpose of this paper is to show how internet technology has dramatically altered the way businesses operations and how significant ecommerce is for the UK economy and the major inhibitors which may affect the penetration of ecommerce. This paper also presents some workable solutions tackle such inhibitors. E-commerce presents buyers and sellers an innovative location in the form of communication and offers an opportunity to generate new marketplaces. In common it is recommended that the development of E-commerce outcomes in higher firm productivity and competence as a consequence of lower search and transaction expenses (Kotler et al, 1997). I have divided the paper into different section in the first section I have presented an introduction regarding ecommerce. In second section I will talk about the UK ecommerce and its importance for overall economy. Then I will discuss the importance of e commerce to the UK economy and the major inhibitors that may affect the penetration of e commerce and offer up some workable solutions. The last section contains the conclusion and references. The universal accessibility of the internet for the exchange of transactions between buyers and sellers is fueling the development of electronic commerce. Electronic commerce is the practice of buying and selling goods and services electronically with computerized business transactions by means of the internet, networks, and other digital technologies. It also covers the actions supporting those market transactions, such as promotion, marketing, customer support, delivery, and payment. By changing manual and paper-based procedures with electronic alternatives, and by using information flows in new and dynamic ways, electronic commerce can accelerate ordering, delivery, and payment for goods services while reducing companies operating and inventory costs (Kenneth, 1998). Internet allows millions of people throughout the world to correspond with each other by transferring computer files, pointed databases, exchanging electronic mail, and even chatting with others (Kalakota, 1997). The purpose of internet-based electronic commerce or Ecommerce in manufacturing is at the moment receiving a all-inclusive consideration for the reason that of its promise of reducing the manufacturing costs and just-in-time or JIT applications (Godin, 1995). The electronic commerce is swiftly emerging as an exclusively innovative method to carry out business and to act together with customers, suppliers and competitors. Ecommerce covers a number of aspects of buying/selling relationships. It as well as covers lots of operations inside the production processes (Kalakota, 1997). Throughout the earlier decade, consumers have made use of the internet as an innovative information medium and corporations have standardized it as a new arrangement for distribution. Certainly, the internet is moving the socioeconomic behaviors and cultural features of organizations and individuals (Soliman, 1997). In particular, younger age group those are awarded with innovative telecommunication and information devices, are disposed to leave additional worth in its exercise for leisure behavior, spend additional time on the internet for their personal requirements, and direct online consumption by taking part in e-shopping and e-auctions. For these causes the analysis and forecasting of the innovative generation’s behavior patterns are a momentous reason in setting up business models in a number of areas of the economy, particularly in division and telecommunication industries (Cawley, 1997). E-commerce is most likely one of the major popular subjects among a number of studies on the effects of the internet. A number of studies regarding business to customer internet shopping have been done to identify main factors influencing buying decisions on the internet, which comprise, in common, the psychographic and demographic characteristics of customers and the excellence of products or services (Kotler et al, 1997). Numerous reported their results regarding Ecommerce and Internet practice, claiming the potential of e-commerce as a innovative retail channel. Though, the majority studies have not taken into account the computer network environment as a main part of their analysis. I have studied lot of such studies and in this paper I try to present the most recent thoughts and trends regarding the internet impact and importance of e commerce to the UK economy. (Kende, 2000) In current few years, a multiplicity of business activities and transactions on the internet has augmented and gone on to rise rapidly. Ecommerce has been transformed from uncertain and hazardous business adventures into legitimate and sophisticated business carry outs. At the same time as the traditional ways of doing business are up till now in existence, e-commerce has opened up an unsullied frontier for individuals and companies to fix in economic, business, and trade activities. Sales capacities in Ecommerce are added up in billions of dollars (Cronin, 1996). The expansion of business on the internet has significant impact on business information services in terms of distribution, access, information production, organization and retrieval. Web sites presenting business information on the internet are propagating in a range of formats and wrap virtually each business area. While governments at all stages and well established publishing corporations that unadventurously proffer business information are up till now dominant in providing most important products, thousands of small businesses have developed their own websites to market, promote and sell their goods and services (Liu et al, 2000). In the below part of this paper and onward I will explain the importance of e commerce to the UK economy. For this purpose I have researched and tried to analyze the data regarding the UK Ecommerce economy’s present state and future. The study of the dispersion of web practice in commerce is the topic of regularly academic and practitioner interest in parts of the world. This is primarily for the rationale that the differences in household acceptance levels of internet connectivity and online business levels among countries and the impact is believed to have on the economy of every country and the world normally. North America is the obvious leader in this high regard, accounting for 151 million people or over 40 % of all internet users, with over one third of these in the USA, and over 40 million US people buying online. Japan is in a far detached second place, accounting for 27 million citizens or 7 % of internet users. UK is also not behind in this race, here approximately large number of users that have internet and having online tractions. 1 Knowledge is a basic building block of economic development and the UK government has a great deal dedicated to support an innovative economy obsessed by ICTs and Ecommerce. A multiplicity of pointers have been urbanized by the Department of Trade and Industry in consultation with the Office of National Statistics and additional government divisions to analyze and benchmark local competitiveness, as well as generally gross value added, labor market actions, education and guidance, and capital and land and communications measures. Key outlines are rising in the UK knowledge economy: (Cremer et al, 2000) Bunching in and around most important cities; Important regional separate out with a bias towards the south east and east of England; Separation surrounded by cities at a confined level; and Force points on transportation and housing caused by clustering. In this section I will discuss regarding the Small- and medium-sized enterprises (SMEs) in UK and their contribution to UK economy, and here I will discuss all this in the prospect of ecommerce. Small- and medium-sized enterprises (SMEs) have a significant task to play in the UKs economy. There are at present approximately 4.0 million businesses in the UK and 99.2 % of them are classified as SMEs, with among 0 to 249 employees. Small- and medium-sized enterprises (SMEs) make use of 58.2 % of the UK employees and turn out 40 % of GDP. It is reported that of 68 % of UK small and medium-sized enterprises that are associated to the internet, 37 % bring into play broadband; so these are really remarkable figures that 40 % of GDP are driven by these Small and medium-sized enterprises and among them 68 % are having ecommerce. So it visualizes that UK economy major part is ecommerce business, and with the growth of internet it becoming increasing. 2 I have found out that there are now two third of UK businesses online and additional growth is possible, these are the large companies those are the majority active in ICT, with approximately twice as a lot of e-commerce behavior as SMEs. Now I will present major inhibitors which may affect the penetration of e commerce in UK economy and I will discuss regarding SME’s because as I have previously mentioned that they are the major part of UK economy. Here the problem regarding the UK administration recognizes that there is a slow take-up of ecommerce/e-business techniques between SMEs. The troubles of the rendezvous of SMEs with ICT have been documented as double.3 The first difficulty lies with defining the uniqueness of SMEs. There have been a lot of studies in the literature that have tried to do so; middle to these is the elementary indulgent that a number of procedures and methods that have been fruitfully functional in big businesses do not in effect offer comparable results when applied to SMEs. It is explained the trouble stating, “SMEs are not small, large businesses however a split and disconnect cluster of organizations”. A second trouble is meted in the variety of businesses inside the SME division itself. SMEs are not at all the same set of companies. They fluctuate considerably by dimension, age, division, motivation, means of organization, national background, position, knowledge base, influence and control of capital, ground-breaking capacity and so on. These characteristics would be able to play in a straight line on their need and opening to engage with e-business (Kotler et al, 1997). I have mentioned the problems those are the Small- and medium-sized enterprises (SMEs) industry related and encumber behind the taking on of ecommerce in UK. Though there is also lots of other. Those I will present in the following sections, but before this I want to mention few additional concepts in this study. It is to be noted that the number of businesses that function online augmenting speedily, a boost in the in general number of business sites from 20,000 in 1995 to 277,000 by 1997. In the example, no distinction was made about the setting of the organizations web presence, from fundamental information to a full safe transaction site with association augmentation abilities. The merely standard employed was that the domain names elected were mainly business-to-business organizations. Yet, some served both the consumer market and the business market, with a number of marketed only via the Internet (Vassos, 1996). Now I will present the biggest inhibitor which has a big affect on the dispersion of e-commerce in UK economy. I have studied many research papers and finalized that lack of strategic goals is that biggest inhibitor. Many researchers have mentioned on the lack of strategic intent at the back of the internet by businesses that wait for to be judged on income growth alone. Business usually seeks to accomplish a return on investment corresponding with connected risk and anticipates a optimistic cash flow upshot. This is the main purpose behind development and accomplishment of corporate, business and marketing policy in spite of whether the business is an “almost wholesome dot.com” or a “roughly pure bricks-and-mortar” action, or a combination of the two. I have observed that, strategic development of the internet, or web, is a reflection of gaining a competitive edge in the long-term, in addition to using the Net for market intelligence reasons and positioning the firm in terms of business image and cost benefit (Lynch et al, 1996). Companies in the UK are additionally tending to use the internet strategically as compared to Australian companies. Though, companies in the UK are likely to seek cost-effectiveness from use of the web as compared to Australian companies. We comment on this characteristic further when probing marketing logistics usage.4 The obvious lack of strategic usage of the internet to gain a competitive edge by Australian companies is of apprehension, and may state that marketing management has yet to boost an admiration of strategic uses for the internet. The basis for little usage of the internet for market intelligence in UK is not apparent, although this may be because of the perceived lower credibility of information carried on the Net (Vassos, 1996). This section of the paper will address the Business to Business point of view of the UK economy and the major reasons that have hinder the B2B ecommerce. So many internet growth metrics have been so strong that its easy to presuppose that everything in cyberspace moves hurriedly. B2C intensification is very hard to come by. These would be relevant available sleight-of-hand techniques to the slimmest of historical data, by means of the vaguest of models of the dynamics of acceptance. Now I will outline the major points that we can say the major reasons behind less growth in the B2B ecommerce in UK economy. 5 Consumer ecommerce has attained substantial penetration in simply a few market segments, where special conditions subsist; A number of people visit companies sites, but the conversion-rate from information-seekers to buyers is extremely low; Certain use of one B2B site does not come into sight to consequence in confidence in other sites; Consumer confidence is weak, and is focused to substantial disturbance. Still in the relatively flourishing, B2C-related area of internet banking, succeeding scares relating to viruses, worms and spyware have been connected with pauses in enlargement, and the outbreak of phishing exploits in 2005-06 may have even resulted in many users suspending their activities.6 Barriers to e-commerce in UK and whole world: In this section I will elaborate the main points those are behind the development of B2B ecommerce, and overall ecommerce in the in UK and approximately all over the world. E-commerce has been widely advertized as providing small businesses in UK with a chance for instant access to global markets and clientele. Though, research demonstrated that it is frequently larger businesses in UK that have benefited from e-commerce taking on with small businesses showing a much slower pace of adoption in UK. The causes for this are varied and have been inspected in a variety of studies as inhibitors or barriers that stop small businesses from adopting and, consequently completely reaping the reimbursement of e-commerce. The image below shows different e-commerce adoption barriers in small businesses in the UK economy. Figure 1 Barriers to e-commerce in UK and whole world-- Source [http://www.statistics.gov.uk/CCI/nugget.asp?ID=177] It is interesting to note that most of the barriers listed in above image would able to be openly attributed to the stupendous features that are as well constraints looked by small businesses. For instance, one of the most usually cited barriers to ecommerce acceptance is that it is too exclusive to employ, a barrier that arises from the certainty that small businesses face complexities getting finance, different their larger counterparts. If the finance was voluntarily on hand to small businesses, high price might not be a barrier to e-commerce implementation. The precise nature of the association among the exclusive features of small businesses and e-commerce adoption blockades is not fully evident (Vassos, 1996). In this section I will describe the problems those are mentioned above, roadblocks, or inhibitors that are associated with doing business on internet in UK. These problems are classified by seeing that internet is really creating problems in that area. I will discuss few problems and also presents some resolving techniques those are developed till now to resolve these issues: Security: The security is the biggest problem in present internet business in UK. We have come to know about several bank hacking and online business frauds. As technologies evolve there are few evils that also evolve with this and became a serious danger for the E-commerce nowadays. Mostly companies are now considering this problem and taking this more seriously in UK economic market for their money transfers and transactions processing. The directness of the internet comes with security risks. Downloading freeware or quickly tested software of vendors from the internet offer the hazards of virus infection and creating security holes in a client system. Ear dropping, and hijacking exclusive information by unintended parties and hacking by burglars are as well potential dangers in doing business on the internet. Consequently, firewall products, verification and authorization products, and protection audit products seem to be in required (Cremer et al, 2000). Information overloaded: If you have to buy a product and you have to search huge number of pages for getting effective and useful information for the product, then you will prefer to buy it from the store. Gradually the internet is overloaded through information to such extent that now the real and effective information search is an enormous challenge. There is so much information overload on the internet and the information regarding any product or and business query results you a bulk of information. The study and find useful information now became a time consuming job (Liu et al, 2000). When Internet and WWW are utilized as an information base, the majority of the information base may offer little advantage to a person at a certain time. On the other hand, one may fail to take in the critical information for the reason that of the difficulty to get accurate search results from such a big information base. Search engines exist, but development can be made, for instance, to personalize the information search and improved content hunt and concept search (Shin et al, 2004). Lack of applications: Even though the WWW technologies have developed at a fast rate, but the applications on the internet are up till now limited comparing to the universe of all business applications that are putting into practice in the conformist ways. Customary business applications are: electronic commerce, online transaction processing, enterprise networking and data warehouse. A number of other applications that are additional customer oriented are entertainment and education online. Though, there are fairly a small number of applications previously on Internet that fall into these groups, there are still chances in re-implementing customary applications on the net and/or developing latest applications (Cremer et al, 2000). Lack of proper policy and regulation for business management: Given that there is no obvious guideline and policy on how business has to be carried out on the internet, there will be business and lawful issues that companies would have troubles to deal with. For instance, internet would able to be employed to by-pass regulated telecommunication services and could be distorted to conduct unethical or yet unlawful businesses. There are as well as subjects regarding intellectual property and officially authorized contracts in electronic forms. The chance in this region is to expand products to put into effect the regulation and policy. A number of the security technologies used in providing safety features on the internet may be employed in this area (Liu et al, 2000). I have presented a most important issue that is very common in nowadays in the ecommerce and in B2B ecommerce. In this problem the user is irritated through the receipt of unwanted e-mails, or spam mails. The Spam mails typically suffer from delivered immediately like other ordinary incoming mails. On occasion, “spammers” transport the not needed mail to a third party by means of other mail servers instead of their own. These days a number of Spam filtering or blocking mechanisms have been urbanized and put into practice, whose theoretical setting is based on artificial intelligence based data mining methods. One more common difficulty is the penetration of computer viruses via e-mail. 7 Hacking has been just about since the beginning days of phone systems or mainframe computers, and with the progress of network technologies, hackers at the present smash into some computer, comprising main government systems. Security matters are as well as a significant subject for the majority of internet users (Carlton et al, 1998). Conclusion In this paper I have presented first the ecommerce new emerging business trends. Then there was a discussion on UK ecommerce and the hindrance in way of B2B ecommerce business. Till now E-commerce in UK is having an enormous impact on the means they do business. It is able to direct dramatic increase in trade, increase marketplaces, developing effectiveness and efficiency and be able to transform business processes. I have talked about the small and medium-size businesses in the UK. I have concluded that barriers identified in the literature were applicable to small business local areas of UK, and it was probable to derive a basic function of e-commerce adoption of effective protection policies and parameters against these barriers. These are need for the awareness among the people for the ecommerce effectiveness and exposure. 8 The need of ecommerce is more demanding in place where people live in an extra pressured operational situation, like in London, ecommerce or online banking is driven by the ease of 24-hour availability and effective easy shopping. Studies demonstrated that internet share trading amplified by nearly 60 percent in the last quarter. The growth in internet trading is conventional to augment in the coming months, as additional brokers build up the capacity to trade online. 9 So there is lot of scope in this area and we can say that ecommerce have more strength of supporting the UK economy and this thing it have proved. References 1. 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