How E Commerce Capabilities Have Affected International Business

3014 words - 13 pages

Electronic commerce, or e-commerce, is a very broad term. E-commerce conducted between businesses differs from that carried out between a business and its consumers. For business-to-consumer e-commerce, the Web has become the dominant pipeline. E-commerce is not just about buying and selling things over the Internet but also the electronic exchange of business data between two or more organizations' computer systems. E-commerce includes buying and selling any item over the Internet, electronic fund transfer, smart cards, and all other methods of conducting business over digital networks. A good example is Amazon.com. The company offers lots of books and merchandise for sale on its Web site. ...view middle of the document...

Today, most companies have worked to expand and improve their process and practices internally. But, the massive use of the Internet by consumers is forcing businesses to focus on external relationships and their business models. In order to meet the demand made by Internet users, organizations are now beginning to rely on e-commerce solutions that help reach and keep customers, open new markets, and condense the business processes. There are very few successful companies that do not use computers in their everyday business activities, which also means there are few companies that do not use e-commerce.Without a doubt, the Internet has ushered in an era of sweeping change that will leave no business or industry untouched. E-commerce is a multi-billion dollar industry today and if you have products or services to be sold on the web, then you "MUST" take advantage of the opportunities e-commerce offers. With rapid technological advances these days and the boom in online spending on the web, it has become easy to setup an e-commerce business at very low up front costs especially for small businesses. Overall, the main benefits of e-commerce are speed, consumer flexibility and easy accessibility. Business is done 24 hours a day, 7 days a week including holidays.E-commerce also affects large sectors such as communications, banking and the retail industry, as well as education, health and government. E-commerce also has an impact on sectors that transmit information (postal service, communications, radio and TV) and those that produce it (finance, entertainment, travel agents or stockbrokers). An e-commerce business that can take orders on the web round the clock (while you may be sleeping or busy in executing offline orders) can do wonders for any business.As you can see in Appendix A, while the numbers of new Internet users in the US and the sub-segment who are online buyers are both growing at single-digit rates, online retail sales in 2006 will increase by a hefty 21%. (eMarketer, 2006). Much of the growth goes to baby boomers, who are increasing their online spending, and a large number of digitally literate young adults who are replacing older Internet shoppers in the e-commerce marketplace. These demographic forces, coupled with the spread of broadband access, are changing the way people shop online and how Web merchants market to them. More than ever, consumers are taking their buying cues from peers who express their opinions about products and brands on e-commerce Web sites, social networks, discussion boards and blogs. Meanwhile, higher broadband penetration has empowered Web merchants to experiment with product visualization tools that give customers a greater sense of products that have traditionally been evaluated up-close in stores.The Internet has emerged as an important channel for retailers, with sales activity continuing to rise by double-digit percentages each year. Globally, TowerGroup estimates that "retail e-commerce sales...

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