Advantages of e-commerce
There are number of views being given by different authors in regards to the advantages to be gained from initiating ecommerce. According to Niranjanamurthy, Kavyshree, Jagannath and Chahar (2013), one of the major advantages that can be gained by the business organizations from initiating e-commerce is increase in the traffic of customers. This is due to the reason that e-commerce helps the business organizations in reaching out to more number of customers without having the requirement of investing in brick and mortar stores. In addition, it is also being stated by the authors that in the current global scenario, internet users are increasing at rapid rate. Thus, the market potentiality in terms of targeted customers is increasing for the business organizations. As per the authors, initiation of ecommerce strategy will help the business organizations to have more target customer segments compared to the traditional marketing mechanism. The more will be the target customer segments, the more will be the competitiveness for the organizations.
Apart from the advantage of higher probability of target customer segments, there are some other sources for competitive advantages can also be gained by the business organizations from the initiation of the ecommerce. According to Fauska, Kryvinska and Strauss (2013), one of the major advantages to be gained by the business organizations from the initiation of ecommerce is offering larger product portfolio to the customers. This can be made possible due to the reason that with the help of ecommerce, online portal can be used to display the offerings. However, on the hand, it is difficult for the business organizations to offer the entire portfolio through their brick and mortar stores. In this article, the authors have given the example of business to business concept where the seller and buyers will have effective meeting point through the use of the online portal. Thus, according to the authors, if the business organizations will have the advantage offering their entire product portfolio to their potential customers, then they will gain more competitive advantages in the market.
In the recent time, one of the major business trends is international business and cross border trading. Thus, in this case also, initiation of ecommerce will be beneficial for the business due to the reason that initiation of the e-commerce will help the business organizations to offer their products in the global market without having the physical presence in the foreign market. According to Deng and Wang (2016), in the case of cross border business, business organizations are having the requirement of taking higher risk and investment. However, with the help of ecommerce mechanism, business organizations will have capital requirement and risk. Thus the business organizations will have more competitiveness in operating in the foreign markets without having the added risks. In addition, the authors have also stated that initiation of ecommerce will also enable the business organizations to change their business strategies in accordance to the market trend. This is due to the reason that in case of the ecommerce, the requirement for bulk stocking is less and thus it is easier for the business organizations to cope up with the change in the market trend effectively.
Disadvantages of ecommerce
Apart from the advantages of ecommerce gained by the business organizations, there are number of challenges also to be faced by the business organizations. According to Shah (2014), one of the major challenges being faced by the business organizations especially the small business organizations from the initiation of ecommerce is requirement of extensive infrastructure. According to the authors, it may get difficult for the small business organizations in investing and maintaining for having the infrastructure. The authors have also stated that there is no assurance of getting succeeded with the help of ecommerce and this may cause reduction in competitiveness of the business if they incur loss. Thus, it is concluded by the authors that ecommerce should be initiated in accordance to the internal capability of the organizations. This will ensure that they will gain competitive advantages from the initiation of ecommerce mechanism.
Another major challenge for the ecommerce is being stated by Kaushal and Jain (2017). According to them, in the current time though the market penetration for online services is high and increasing but it is still in the nascent stage. The authors have also stated that there are still large sections of the global population who are not having the internet facilities. Thus, with the initiation of the ecommerce strategies these sections cannot be targeted. Thus, according to the authors, it is important for business organizations to first identify the target market segments prior to the initiation of the ecommerce strategies.
Discussion
Thus, from the above analysis, there are number of advantages and disadvantages being identified that will get emerged from the initiation of the ecommerce. It is identified that initiation of the ecommerce strategy will pose both benefits and challenges for the business organizations. Thus, it is important for the business organizations to initiate the ecommerce strategy in accordance to the real world situation faced by them. It is important for the business organizations to identify that whether the internet facilities are well available among their target customer segments. If the majority of the target customers are having internet and online facilities, then initiation of ecommerce will be successful. On the other hand, if the target customer segment is majority of offline customers then the probability of getting success from the initiation of ecommerce will be lower.
It is also being identified in the above sections that ecommerce helps in enhancing the customer convenience. However, it is also to be noted that there are some limitations also being identified for ecommerce over the traditional business concepts. One of these shortcomings is the lack of touch and feels facility for the customers in the case of ecommerce. In this case, they will get the access to the products after being delivered. There are number of consumer goods that are having the requirement of touch and feel by the customers. Thus it is important for the business organizations to determine where their offerings are having the need of touch and feel facilities for the customers or not. Business organizations will only gain competitiveness in the market if the customers are given the facilities of both online convenience and traditional touch and feel facilities. In the current time, there are number of customers mainly in the retail sector who prefers to choose and select their products online and purchasing it from physical stores. Thus, it is also important for the business organizations to initiate their ecommerce strategy as a complementary and not as a substitute to the traditional business model. Business organizations will only gain competitive advantages in the market when the customers will be able to gain the benefits from both online and offline sources. It can also be stated that though ecommerce is the recent trend in the current business scenario but it cannot be implemented as the substitute for the traditional business model. It is also to be noted that business organizations will be able to gain competitive advantages if the ecommerce facilities and strategies can be adopted in accordance to the business sector. This is due to the reason that there are certain business sectors that can be easily managed with the help of extensive process of ecommerce. On the other hand, there are number of business sectors are having the requirement of more traditional business model.
Conclusion:
Thus it can be concluded that initiation of ecommerce will surely help the business organizations in competitive advantages but with considering certain factors. In this report, there are number of these factors are being discussed and evaluated from different point of view. This essay concludes that ecommerce will only help the business organizations in gaining competitive advantages in the market only when there will be proper integration between it and the traditional business model. The more effective will be the integration of both the business model, the more probability will be for gaining competitive advantages.
In the current business scenario, it is important for the business organizations to be competitive in order to survive in the market. This is due to the reason that in the current business scenario, competition is increasing in leaps and bounds and it is becoming more important for the business organizations to initiate different means in enhancing their competitiveness. In the recent time, e-commerce is one of the major trends being followed by the contemporary business organizations in gaining their competitive advantages. E-commerce refers to the involvement of internet and different online services in marketing and selling the products to the customers.
Thus, in order to determine the extent to which e-commerce can be used by the contemporary business organizations, it is important to identify the major benefits and the challenges for it. This essay will discuss about the different aspects of e-commerce and to what it can be used in order to remain competitive.
Reference:
Deng, Z. and Wang, Z., 2016. Early-mover advantages at cross-border business-to-business e-commerce portals. Journal of Business Research, 69(12), pp.6002-6011.
Fauska, P., Kryvinska, N. and Strauss, C., 2013. The role of e-commerce in B2B markets of goods and services. International Journal of Services, Economics and Management, 5(1-2), pp.41-71.
Kaushal, T. and Jain, J.K., 2017. Emerging Challenges of Global E-Commerce. INTERNATIONAL JOURNAL, 2(3).
Niranjanamurthy, M., Kavyashree, N., Jagannath, S. and Chahar, D., 2013. Analysis of e-commerce and m-commerce: advantages, limitations and security issues. International Journal of Advanced Research in Computer and Communication Engineering, 2(6).
Shah, J.P., 2014. Role and Challenges in Cloud Computing and Ecommerce in SME’s. RESEARCH HUB–International Multidisciplinary Research Journal, 1(3).
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