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"Investigate the impact e-commerce has on SMEs (Small and Medium Enterprises) and explore the perceived benefits gained by operating online"
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There are four major categories of e-commerce, namely, Business-to-Business (B2B), Business-to-Consumer (B2C), Peer-to-Peer (P2P) and Consumer-to-Business (C2B) (Rayport & Jaworski, 2003). In addition, there is also government involved in some instances, so that there are actually three parties in such cases. This makes the total number of categories equal to nine; however, it is often omitted due to rarity of such situations ever arising (Schniederjans & Cao, 2002). Quite clearly, electronic commerce enables a two-way communication between various ports involved in a financial transaction.
The history of online business can be traced back to that of the invention of World Wide Web, although, it was the least important of all causes that operated behind the invention of the latter (Chan, Lee, Dillon & Chang, 2009). In fact, it was only when researchers were contemplating different areas where the new invention could prove to be beneficial, that the concept of introducing electronic commerce was paved (O’Regan, 2008). The Internet is a common platform for a large quantity of information. Not only has it helped to make communication faster and cheaper, but has also facilitated in building up of a large database including different hardware and software sourced in different networks. This was one of the primary features of Internet that attracted firms from all over the world to try their hand in e-commerce (Schniederjans & Cao, 2002). However, as its use became more and more popular among the firms and their customers, more benefits of using the technology started peeping out. Two of the key advantages of adopting electronic commerce in making financial transactions are – reduction in the cost of accomplishing transactions and enhancing productivity of the firms. Introduction to online technology has helped in lower recruitments and lower cost of maintenance indicating a reduced cost of
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characteristics of the business organization, its management, its relationships with other entities and other contextual variables that lead or contribute to the business becoming successful. Furthermore, the focus is on a particular type of business and on those belonging to a particular country.
The recession weakened the ability of lenders to meet the demand for loans, especially without security. The economic downturn brought about financial difficulties in SMEs and at the same time, lenders could not guarantee access to additional funds. Some of the SMEs were forced to shut due to financial difficulties and bankruptcy.
However, I believe that risk management is not beneficial for every organization. According to me only large organizations get mostly benefitted by the implementation of risk management techniques. On the other hand, small and medium enterprises hardly get any benefits from the implementation of risk management techniques in their system of operation.
Globalization and its technological development aspects have been fundamental factors to trade, especially to the global trade where involved parties may be from different geographical regions. Communication for product description and establishment of terms of trade towards a transaction’s contract establishment is easier, faster, and cheaper.
But times have changed with the globalisation regime multinational enterprises have made a distinctive mark on the local markets as well. While on the one hand this affected the economic factors of the region or country, on the other the SMEs started realising the need for pressing changes in the management of different aspects of the enterprise.
The effect of globalization has consequently resulted in industrialization in developing countries. Many SMEs have then been set up through industrialization and therefore it has created employment opportunities.
Developing countries are among other factors,