Value of Interest to Organizational Business - Essay Example

Value of Internet to Organizational business Table of Contents Table of Contents 2 Introduction 3 The Internet 3 Internet and Business 5 Why Internet is necessary for business? 6 The Use of Internet Applications in Business 7 E-Commerce and E-Business 10 Value Chain Model 11 Figure 1- value chain Source; http://www.quickmba.com/strategy/value-chain/ 13 Advantages of Internet in business 14 Discovery 14 Communication 14 Collaboration 14 Conclusion 15 Bibliography 15 Introduction This paper explores the Internet structure, implementation, and different working styles of the Internet. Internet is now common in every walk of life as well as every kind of organization. With the facility of Internet organizations have better options for carrying out their business activities. The present age is the age of technology and the implementation of modern and up-o-date techniques of Internet (e-business, e-commerce, etc) to business sector make the overall customary business practices easier. This also offers new ways and markets to the organizations for presenting their products or services. This paper will present detailed and comprehensive overview of the Internet with respect to different organizations. The Internet Internet mostly acknowledged basically “the Net,” the Internet is a universal structure of computer networks-a networks, in which users at any one computer can receive information from any other computer (as well as they can communicate straightforwardly to users at different computers in different locations). Nowadays, the Internet is a, supportive, public, self-financing facility available to hundreds of millions of users internationally. Actually, the Internet makes use of a part of the whole resources of the presently accessible public telecommunication networks. In principle, what differentiable the Internet its usage of a collection of protocols known as TCP/IP (Turban, Leidner, McLean, & Wetherbe, 2005, p. 71). The appearance and growth of the Internet has made business markets more workable and competitive than over before. With the Internet, every organization (small, medium, and large) in the world is potentially a local competitor. At the present, all the business marketers understand that the Internet is a precious instrument or technology for extending reach to international markets and dealing customers in a superior way (Summers, Gardiner, Lamb, hair, & Mcdaniel, 2003, p. 67). Various features of the way individuals or organizations carry out their activities and survive in the twenty-first century will be measured via the huge web of electronic networks that was referred to normally as the information thruway however at the present is generally acknowledged as the Internet (Turban, Leidner, McLean, & Wetherbe, 2005). The Internet is a wide-reaching collection of networks that connects the millions of businesses, government agencies, educational institutions, and individuals (Shelly, Cashman, & Vermaat, 2005, pp. 11-12). More than one-half billion people all over the world make use of the Internet daily for a variety of reasons, few reasons are given below: (Shelly, Cashman, & Vermaat, 2005, pp. 11-12) and (Norton, 2001): Talk with and meet other people around the globe Make use of a wealth of information, news, and research results Online shopping for goods and services of their choice Bank and investment Participating in online classes Utilizing ways of entertainment and free time, for instance online games, music, videos, books, and magazines. At the present we see use of Internet is evolving in the businesses more readily so it is really important to have an online business system for every organization so that their business can flourish. Internet is presumably one of the majority well-liked and modern subjects among sorts of studies on the effects of the Internet. By seeing the people’s interest in Internet, a lot of studies regarding business to customers and Internet shopping have been carried out to identify main factors influencing buying decisions on the Internet, which encompass, in common, the psychographic and demographic characteristics of customers and the excellence of products or services (Armstrong & Kotler, 2004). According to (Turban, Leidner, McLean, & Wetherbe, 2005, pp. 128-129), the most extensively use of the Internet is for the utilization of World Wide Web. A lot of people consider that the WWW is identical with the Internet; however, actually, this is not true. The Internet works as the transportation device; on the other hand the Web is a technique or application that makes use of that transportation mechanism. A lot of other tools and applications also run on the Internet, in which e-mail is most extensively used application. The WWW is an application which uses generally established standards for storing, distributing, formatting, and showing information by means of client/server structural design. The Web can manage all types of digital data, such as text, sound, hypermedia, and graphics. The Web incorporates graphical user interfaces; therefore it is very simple to use the Web (Turban, Leidner, McLean, & Wetherbe, 2005, pp. 128-129) and (Turban, Rainer, & Potter, Introduction to Information Technology,3rd Edition, 2004). Internet and Business According to (Ray, 2004, p. 269), the Internet is a modern technology for the organizations, mainly small firms. However this technology, similar to every other applications or tools, is simply a technology and it depends on organizations how they gain benefits by using this technology. The Internet facilitates organizations to attract new customers, services presented ones improved, correspond to customers using more effective and professional ways, collect information about customers choices as well as retrieve it quickly, and trade more products. Moreover, a lot of organizations have attempted to make use of the Internet as impressive much more than it is. Organizations as well as individuals built whole businesses online, believing that in some way this would distinguish them from other organizations or businesses. But, a lot of among these organizations failed (Ray, 2004, p. 269). The Internet technology offers so many facilities. First of all, the Internet works as a transportation device for data, next, the Internet is a system that establishes connections with any computer linked to it. If an organization grasps the control of these two rules or facilities, that can utilize this technology with utmost aptitude to improve the business (Ray, 2004, p. 269). Why Internet is necessary for business? The Internet facilitates the organizations to enter into the international markets and reach broad categories of people whilst personalizing the buying practice for each one and offering active information on inventory, suitable prices, best-selling products, etc. However, traducing the goods and services to local people in a retail store is fine, and millions of businesses succeed in local trading. But, effectively trading the goods and services to more customers, more proficiently, by means of the Internet will augment businesses’ revenues. Before using the Internet for business following points should be noted: Maintaining a considerable local existence in the new sales market Developing a separate department to manage, fulfillment, sales and distribution Maintaining a telesales as well as local sales personnel, complying with local lass, and offering customer support if required. Furthermore, customer service and quality should in no way be diminished or compromised for any cause; on the other hand, they should be improved by gaining full benefits of available online customer support applications and services (such as, e-mail, online chat, discussion forums, order tracking facilities etc.) (Ray, 2004, p. 307). The Use of Internet Applications in Business The Internet provides tools and facilities in the following main categories of business: (Turban, Leidner, McLean, & Wetherbe, 2005, p. 129): Presence E-Commerce Collaboration and Interaction Integration and Services Emphasis Eye balls (human review) Revenue, expansion Profit Capabilities, services Type of transaction No transaction B2C, C2C, C2B, G2C, e-CRM B2B, B2E, supply chain, c-commerce, G2B Portals, e-learning, m-commerce, I-commerce Nature Publish information Process transaction Collaborate Integrate, provide services Target Pages Process transaction Digital systems Digital environments Concentrate on Web sites Web-enabled existing systems, dot-com Business transformation consolidation Internal and external integration Time 1993-1994 1995-1999 2000-2001 2001-2005 Below some businesses are just a few examples of corporations making use of the Internet for increasing their sales: (Stair & Reynolds, 2003, pp. 17-18) Name of Business Objective Description of Internet Usage Godiva Chocolatier Increase sales and profits This organization built a very gainful web site that facilitates customers to purchase and ship chocolates. According to Kim Land, director of Godiva Direct, “This was system from the start to make money.” In two years, online sales have reached by more than 70 percent each year. Environmental Defense Alert the public to environmental concerns This organization effectively utilized the Internet to alert people to the exercise of catching sharks, removing their fins for soup, and returning them to the ocean to die. The Internet site also facilitated people fax approximately 10,000 letters to members of Congress about the practice. According to Fred Krupp, the executive director of the Environmental Fund, “The Internet is the vital term of ‘think global, act local.’” Buck man Laboratories Better employee training This organization utilized the Internet to instruct workers to sales particularly chemicals to paper companies, rather than bringing them to Memphis for training. According to one executive, “their retention rate is much elevated, and theyr removed a week in Memphis, which meant big savings.” Making use of the Internet decreased the hourly cost of training an employee from $1,000 to only $40. Siemens Decrease costs By making use of the Internet, this organization, which constructs and services power plants, was capable to decrease the expenditure of entering orders and dealing customers. The Internet solution expenditures about $60,000 compared with a traditional solution that would have cost $600,000. Goldman Industrial Group Save time This organization makes machine tools and was able to slash the time it takes to complete an order from three or four months to about a week by making use of the Internet to assist organize components and development with its suppliers and at its plants. Partnership America Make better decisions This organization built a web site for wholesalers of computer equipment and supplies. The wholesalers make use of the web site to make suitable decisions about the attributes and costs of different components of computer equipment. The system helps wholesalers to link to Partnership America’s web site using cell phones.. Altra Energy Technologies Get energy to companies that need it This organization built a web site to assist companies buy oil, gas, and wholesale power over the Internet. E-Commerce and E-Business The wide-ranging presence of the Internet for the exchange of transactions between buyers and sellers is the basic reason for the development of electronic commerce (e-Commerce). “Electronic commerce is the course of action of purchasing and selling goods and services electronically with computerized business transactions by means of the Internet, networks, and other digital technologies” (Laudon & Laudon, 1999, p. 25) and (Stair & Reynolds, 2003, p. 19). It also includes actions behind those market transactions, for instance advertising, customer support delivery, marketing, and payment. By substituting manual and paper-based techniques with electronic methods, and by making use of information flows in modern and energetic modes, e-Commerce can speed up ordering, delivery, and payment for goods and services on the other hand reducing organizations operating and inventory expenditures. “E-Business is the utilization of the Internet and other digital technology for organizational communication and coordination and the management of the organization” (Laudon & Laudon, 1999, p. 25). The World Wide Web has turned out to be a universal medium for electronic commerce (e-commerce), developing modern techniques for businesses to cooperate with one another and their customers. In most simple words, e-commerce means carrying out business online (Norton, 2001, p. 371) and (Worthington, 2003). For instance, Amazon.com is one of the most well-known and flourishing e-business stories around. When somebody submits an order at Amazon.com or even just visits the web site, Amazon.com is capable to mark a variety of online and e-mail advertisements to people interests. An additional advantage of e-business that Amazon.com demonstrates is the facility to connect to partners. Similar to other businesses Amazon.com is able to rapidly and perfectly incorporate its communications with that of associate retailers for instance Toys ‘R Us, Office Depot, Target, and others (Ray, 2004). Value Chain Model According to the value chain model (Porter, 1985), the actions performed in any manufacturing company can be separated into two categories: first category includes the primary activities and second category includes support activities. In primary activities materials are purchased, processed into products, and distributed to customers. The primary activities are: (Turban, Leidner, McLean, & Wetherbe, 2005, p. 107) 1. Inbound logistics (inputs) 2. Operations (manufacturing and testing) 3. Outbound logistics (storage and distribution) 4. Marketing and sales 5. Service Primary activities are supported by the following support activities: (Turban, Leidner, McLean, & Wetherbe, 2005, p. 107) 1. The firm’s infrastructure (accounting, finance, management) 2. Human resources management 3. Technology development (R&D) 4. Procurement Furthermore, each support activity can maintain any or all of the primary activities, as well as the support activities can support each other. An organization’s value chain is a component of a bigger flow of actions or activities, which is acknowledged as value system. A value system consists of the suppliers that present the inputs essential to the organization and their value chains. When the organization develops products, they navigate the value chains of distributors, to the buyers (customers). A value system consists of all the parts of this value chain. Taking and maintaining a competitive edge, and supporting that benefit via IT (Internet), involves a perceptive of this whole value system (Turban, Leidner, McLean, & Wetherbe, 2005, p. 107). According to Kotelnikov (2009), the value chain analysis presents the enhanced understanding of the business activities through which a firm develops a competitive advantage as well as produces shareholder value; it is helpful to split the business structures into a sequence of value-generating tasks referred to like the value chain. The main intention of value chain analysis for the MDCM, Inc. business is to assess the objective of these activities and to present the client a level of value that goes beyond the cost of the tasks, thus ensuing in a profit scope. In the value chain analysis regarding the MDCM, Inc. business we will have following activities (Kotelnikov, 2009) , (Turban, Leidner, McLean, & Wetherbe, 2005) and (Laudon & Laudon, 1999): Inbound Logistics: This factor is about the receiving new business systems and their implementations in business environment. In this scenario we need to analyze the all the related factors such as their contracting and implementation in business framework. Operations: After the implementation of the new IT and business management system in the organization structure we need to assess the how main business information inputs are transformed into the finished effective business handling services. Outbound Logistics: the scenario of value chain analysis incorporates the detailed analysis of the management and handling of the manufacturing and distribution of finished goods through the new information based system. Marketing & Sales: the recognition of customer requirements as well as the generation of sales is also a main factor of the new business management systems. The new systems implementation needs to effectively support and handle the marketing and sales setup. Service: The new technology based business systems need to effectively support and uphold the customers’ products and services those are sold to them. Figure 1- value chain Source; http://www.quickmba.com/strategy/value-chain/ The value chain model is used in diverse situations. For instance, it can be utilized to carry out organization’s analysis, by thoroughly assessing an organization’s main activities and main competencies. For doing this, first of all it is necessary to find out strengths and weaknesses of carrying out the operations and the values added by each action. The actions that increase more value are those that might offer strategic improvement. After that it is used to examine whether by including IT (Internet, e-commerce, networking, etc.) the organizations can obtain higher worth. In addition, the value chain model can be utilized either for an individual organization or for a sector by applying to various information systems that assist particular activities (Turban, Leidner, McLean, & Wetherbe, 2005, p. 107). Advantages of Internet in business With the modernization of the Internet in we have seen an explosion of business applications. Below I have outlined some of the main advantages of the Internet regarding the effective business management (Turban, Leidner, McLean, & Wetherbe, 2005, p. 128). Discovery Discovery encompasses searching and retrieving information. Internet offers customers the facility to see and retrieve information. Discovery is offered by software agents because the amount of information on the Internet as well as intranets is rising speedily (Turban, Leidner, McLean, & Wetherbe, 2005, p. 128). Communication The Internet presents quick and inexpensive communication methods that vary from online bulletin boards to complicated information exchanges among several companies. Internet also offers information distribution and information processing. E-mail, newsgroups and chat groups are few examples of communication methods (Turban, Leidner, McLean, & Wetherbe, 2005, p. 128). Collaboration Since with the use of Internet the communication has improved so electronic collaboration among individuals and between organizations is growing quickly. There numerous applications that can be used, varying from screen sharing and teleconferencing to group support systems. Various collaboration software, tools and applications, acknowledged as groupware and workflow, can be utilized on the Internet (Turban, Leidner, McLean, & Wetherbe, 2005, p. 128). Conclusion Internet has turned out to a vital part of our life. The uses of the Internet in the business are growing more rapidly and offering better reorganization in the global business markets. This research has presented detailed analysis of the new web based business infrastructures and e-commerce structures. In this research I have outlined the main significance of the web based business regarding the enhanced business handling and management. This research has outlined the main areas and aspects of businesses those are extensively influenced through the Internet and now appear in a better form. I hope this research will offer a deep insight into the Internet, e-business and web based information effectiveness for the handling the businesses. Bibliography 1. Armstrong, G., & Kotler, P. 2004. Marketing: An Introduction, 7th Edition. Upper Saddle River, NJ.: Prentice-Hall, . 2. Kotelnikov, V. (2009). Revenue Model. Available at: http://www.1000ventures.com/business_guide/revenue_model.html [Accessed 01 December 2009]. 3. Laudon, K. 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