What Is E-Commerce - Essay Example

E-Commerce E-commerce is an excellent option for a small business who desires to expand its operations over a larger geographical area and at the global level. The marketing of its products and services would gain leaps of strength to several niche customers and would obtain a greater degree of productivity for the organization too. An internet strategy is urbanized to envelope all of their present problems and enhance good customer and supplier relations. Creating an internet website would make the company stand accessible anytime-anywhere. In doing so the security factors regarding data and transactions must be taken care. Table of Contents Abstract 2 1.What is E-Commerce? 4 2.Problems with the present system: 4 3.Technologies for doing business online: 4 4.Benefits of small businesses for using E-Commerce? 5 5.Impacts of E-Commerce - Ethical issues 7 6.Impacts of E-Commerce - Usability features: 7 7.Advantages of small businesses to develop an E-Commerce operation 8 8.Disadvantages of small businesses in E-Commerce: 9 9.Future trends of EC: 10 10.Personal opinion on EC: 10 Conclusion 11 References/Bibliography 12 1. What is E-Commerce? E-commerce is business over the internet and using the internet technologies which facilitates them to accomplish an organizations focus and objectives (Chaffey, 2004, p.46 - 53). As internet technologies are exploited to its entirety by the businesses providing products and services to consumers and customers, auctioneering turns out to be an everyday issue. Hundreds to thousands of people are taking part in the auctions which are arranged by the businesses over the internet for goods ranging from furniture to DVD’s. An internet strategy is urbanized to envelope all of their present problems and enhance good customer and supplier relations. Creating an internet website would make the company stand accessible anytime-anywhere. In doing so the security factors regarding data and transactions must be taken care. The problems with the present system must be analyzed for better insight of the organization and to fetch the primary reasons of enveloping technology. 2. Problems with the present system: The present system of the small business is usually traditional in nature and is composed of paper work and manual systems which do not envelope the entire business integration and online operations. There is no mechanism to capture enough personal data about customer’s, namely feedback, preferences and tastes, to retain them or get new ones. Their Customer Relationship Management is quite poor. Analysis of customer base is not done at all. In addition to that the present system neither possesses automatic links for replenishment of their stock, which makes an impact for their suppliers. The present system is quite slow and does not exploit the brand value for selling its products and services to a large community of users. The technologies have a great impact on the building and construction of the e-commerce system. 3. Technologies for doing business online: The various technologies used are classified into client and server side and more specifically they denote the e-commerce and web techniques used for building up and running successfully the online business. On the web technology side, front end technologies like Active Server pages (ASP) or Java server Pages (JSP) can be used for the designing of web pages. Several other technologies like web 2.0 can be used to add collaborative and interactive factor over the internet. The whole idea is to enhance personalization for the various internet activities and to enhance their credibility for better synchronization with other players over the internet. It may use RSS to announce their offers and promotions to web based blogs and news. The data protection forms an integral part of online transactions. The security and encryption techniques that are to be used must be standardized. It not only enhances customer confidence but also highlights a better move towards customer retention and repeat business. On the e-commerce side, it can use VeriSign services for protecting data and information exchanged between the sites. It uses a 128-bit SSL certificate to get the job done. The e-commerce transactions can be well protected using the SSL technology (Rayport, 2002). It is very secure for all business deals and offers greater protection for business financial information. 4. Benefits of small businesses for using E-Commerce? The technologies for doing business online have a profound impact on the type of various elements used. The small businesses would use e-commerce (EC) for one primary reason which is for enabling itself to match their competitors, have a global presence, and fetch various groups of customers and to spread their good name over the internet. The following would be the reasons for making the use of EC: Accessibility: A large number of people globally can avail the online store. Global catering becomes quite easy as requests can be invoiced online and delivered using several means of transport. Anytime Anywhere access: The customers can seek their leisure in accessing the website and placing request online unlike the strict working hours of the retail shop where phone and premises were opened for a limited time (Armstrong, 1996). Compare: The online store was provides facility to compare its products with each other and other products, so that one gets to analyze the product base and market availability for their choice and pocket. All in one page: The online store can collaborate with suppliers and other businesses across the globe for either helping them is spreading their products or catering to several medium scale businesses for their growth. Tracking: Effective tracking of inventories and deadlines can be made possible using the website. Better display: The products and services can be made aware to the global users of all nature so that one gets a complete view of what can be fetched. It includes detailed description of the products. E-marketing: The online store can reach to millions of buyers and consumers and other businesses can put up their advertisements to get visibility of the services. Purchase online: The online store would facilitate online purchases using the secured protocols implemented with the e-commerce technologies using SSL technologies (Forouzan, 2003). Introduction of promotion offers: The online store can promote its sale through product and service innovation. Measuring sale, profitability and resource output: The online store is an information system capable to measure the amount of sales received in a periodic measurement of time. The profitability can be easily determined to put up online ratings which form quite important to get better visibility and acceptance in the global network (Kraemer, 2001). Its presence in the internet is quite important so as to perform better than others. Market share: The existing market for the products would receive a blow with the incoming and launch of the website. It aims to capture the customer base and the market for branded luxury products which they have decided to cater for their self being. The direction of the customers towards this website would attract greater degree of attention and ultimately sale for its products. Revenue: In terms of revenue the sales of the luxury brand products would be met and enough earnings would be generated for its sufficiency and business continuity. As the products would carry large promotion offers and discounts, the revenue is supposed to increase with greater detail. Product quality: The quality of the products would be better as they are directly purchased from the branded stores in US and delivered directly to the customer. Accessibility: The various regions of Taiwan would be catered and all the customers would make good of it. Wide accessibility would fetch larger customer base and would generate greater revenue in the process. Fulfilling a need: The website would bring close all the prospective buyers who always desired owning the luxury brand products if offered discounts. Revenue models: Among the revenue models named B2B, B2C and C2C, we can select B2B and B2C for the following reasons: 5. Impacts of E-Commerce - Ethical issues Legal and ethical issues are vital to online success. Building trust and user confidence is essential to our client, respecting consumer privacy and adhering to data protection legislation. "Consumers are extremely concerned about security and privacy on the Internet" (Trepper, 2000.) The online store is designed to give options concerning the privacy of one’s credit card information, name, address, e-mail, and any other information provided. The business is committed to keeping the information collected over the site secure. It offers the industry standard security measures available through the browser called SSL encryption. If at any time a customer would like to make a purchase, but do not want to provide credit card information online, an order can be placed without credit card information and a representative will contact them. Alternatively, a sales representative can always be contacted over telephone. The policy to contact customers in the event of a potential problem with their purchase or any normal business communication regarding purchase. "It must take customer fears about security seriously" as pointed out by Chaffey (2004). It makes clear terms of trade and offer warranties/returns policy. They address copyright, patents and trademark protection, which their competitor should adopt. 6. Impacts of E-Commerce - Usability features: To stand out in the crowd it must come up with great graphics in their website, page layout and navigation must be well ordered and in correlation with usability. "The homepage is your companys face to the world." (Nielsen, 2002) The homepage must clearly depict the essential services which are provided and search options must be incorporated well. An appropriate tagline can add a lot to the glamour online. The homepage can have a white background with blue hyperlinks. “White in its nothingness acts as a wonderful balance between colors.” (Singh, 2001.) 7. Advantages of small businesses to develop an E-Commerce operation The above issues and advantages discussed needs to be taken into account for the evaluation of the e-commerce strategy for the small business. The concept and idea of brand can be created with large spread online and would cater to international demands and choice. This factor is a great component for making the appropriate difference among its competitors. Larger spread would develop a brand value for the products and services, the recognition factor would increase and the organization would attain better development of resources. Business also creates value online by engaging several partners for the spread of the products and services to various geographies. The increased ability to create value has some disadvantages. The biggest disadvantage is competition and lowering of prices of products and services to retain market share. In such situations, the company often suffers losses to retain market share by lowering prices of its products.  The strong marketing support would make it possible to gain an upper hand to meet with the necessary requirements for getting online and presentation of its products and services over the internet. Appropriate strategies can be formulated for meeting the traffic of the website and marketing in the internet. Financial, operational and marketing strategies can be formulated accordingly by the higher management of the organization and unless they are committed it gets quite difficult to impound right things at the right place. A small company’s intense desire to take its enterprise global comes with enough passion to grow in dimension and attitude to compete with international players and provide a better image to its brand and products would find a better and wide market for its long term survival. The complexities of the business processes are handled with ease and the status of the company makes it quite possible to handle all the processes in a diligent manner. The product prices make it quite eligible to compete against competitive prices offered by the companies and creating the exact image for making a mark. The identification of the right customer group and the geography is very essential for spreading the business idea and concepts for business success. The focus would then help to innovate its products and services for catering the right group of people. The small business would be able to understand the exact market for their products and accordingly shape up its various business strategies for enabling business growth and continuity. E-commerce would help at this stage to discover the right customer base for the product. E-commerce has revolunized the pattern of communication for any company. The strategic decisions for spending resources towards the products and services and engagement of various partners over the internet would ensure better communication platform and opportunity to plan the spread over the internet. As the company can strategize its spread from a certain region to other geographies, it develops a competitive advantage over other companies to decisively understand the emerging geographies one can tap resources. Through Google analytics and other such similar programs, a company can market its products for a specified territory or decide to enter other regions through a large array of online suppliers and business partners.   8. Disadvantages of small businesses in E-Commerce: The advantages of the various e-commerce policies developed above have a deep impact; however the pitfalls of the technology must be noted for better overview and knowledge of the demerits. This enables better managing the e-commerce infrastructure. Competition and security in transaction is the major flaw for the setting up electronic commerce for a small business. Competition forms a major placeholder as several other sellers have already occupied market share in terms of various segments of selling music and video over the internet. Security of information and the various business innovations would require a huge effort to spread the good word for the organization over the internet. The information security is critical to competitiveness. The open nature of the internet would arise in various security problems and discovering of the other company resources over the internet. Primarily the security problems pose a large problem to the online infrastructure. Internet impacts the type of information available to businesses as integrity and correctness of information matters the most. Incorrect information would disengage various marketing efforts and also enhance the excessive costs towards marketing and management of resources. Other complications would impact price change dynamics and would wrongly decide various cost measures and resource engagements.   9. Future trends of EC: The future trends would reflect the following: Better secure payment options would make sure that the customer’s financial information is not at all harmed but he is able to pay for the services, uses of eWallet and Paypal are widespread and other techniques. The certifying authority must be performed for each site so that it guarantees safe shopping guarantee. Seller and buyer trust certificates and protections must be provided so as to promote and enhance cross-border transactions swiftly. 256 or 512 bit encryption techniques must be enforced to guarantee 300% data transfer security 10. Personal opinion on EC: The E-Commerce is the sole differentiator and a great transformation tool from ‘brick and mortars’ to ‘click and mortars’. The visibility is improved to a great extent and exploitation of various internet technologies is a must. The promotion of the brand image to spread across the globe to spread the good name would make sure that the effort, time and money invested with the people who envisioned it in making it successful would pay up well. Conclusion A small company also desires to spread its wing and in the age where technology would love to evolve newer dimensions to efficiently capture business functions and manage the flow of information to enhance customer base in creating a virtual market place to cater to a large section of customers. The E-commerce business strategies which it could use are B2B and B2C rendering better management of product distribution and services to masses. Technologies can envelope almost all but efficient management of such systems needs to be done on periodic basis taking into consideration the feedbacks from the customers. Security factors must be taken care so that appropriate action can be taken and its working ability would be more secure and feasible in the face of online threats. The online presence would enhance better prospects for the organization which would enhance a large customer base and customized internet strategy to market its products and services. The organization would be apt at making critical decisions and would ensure better use of technology for its online activity. Total word count: 2506 References/Bibliography Armstrong, A. & Hagel, J. (1996). “The Real Value of On-line Communities”, Harvard Business Review, pp.134-141. Forouzan A. Behrouz (2003). “TCP/IP Protocol Suite”, second edition. Tata McGraw Hill. Nielsen J (2002). “Top Ten Guidelines for Homepage Usability”. See: http://www.useit.com/alertbox/20020512.html. Pressman. R. (2000). “Software Engineering: A Practitioners Approach”, McGraw-Hill, Maidenhead, pp 78-81. Rayport (2003). “E Commerce”, TMH, pp 34-38. Singh, V. (2001). “Color Design for the Web”, See: http://coolhome pages.com/cda/color/. Sommerville, Ian (2004). ‘Software Engineering’, Pearson Education. Trepper, C. (2000). “E-Commerce Strategies, Mapping your Organizations success in todays competitive marketplace”, Microsoft Press, pp.138-140, 153. Read More