E-Business Analysis - Coursework Example

E - Business Introduction E- Commerce or Electronic commerce is the latest business strategy evolved with the help of internet and E-mails which canbe defined as the paperless exchange of business information using electronic data, e-mail, electronic bulletin boards, fax transmissions, electronic funds transfer etc. Ecommerce business size has increased to billions from millions in the current decade. “In May 2005, the US Department of Commerce released figures reporting that e-commerce sales in the first quarter of the year had been up 23.8% from the previous year. E-commerce sales, which totaled at an estimated $19.8 billion for the quarter, account for 2.2 percent of total retail sales in the country, according to the report.” (Eschen, 2005) E-commerce is one of the fastest growing business segments in the world both in quantity and quality. It is easy to setup an E-business with minimum investment and labor if the entrepreneur is smart enough to identify the right opportunity provided by internet. Online business has much wider scopes than offline businesses because of the wider reach-ability of it. It is easy for a person to purchase a good from America staying in some other countries using a simple credit card. Moreover the consumer can compare the prices of the same product in various countries and thus he will able to purchase a product for the cheapest possible price. Amazon.com, Inc..., an American electronic commerce company is one of the leaders in the e-commerce business field with diversified business activities and successful marketing strategies. This paper briefly analyses E-commerce as a business strategy taking Amazon as a reference organization. E-business strategies- Amazon Amazon.com Inc, one of the leaders in E-business, founded by Jeff Bezos in 1994 has started with the online book selling and then expanded to diversified activities like the selling of CDs, videos, DVDs, electronics, toys, tools, home furnishings and house wares, apparel, and kitchen gadgets film production etc. “Currently it employs more than 7800 employees and as per the statistics of 2002, it has reported $ 3.9 billion sales” (Amazon.com, Inc, n.d) The company did not focus on profits for the initial five years and spend much of its revenues in expansions in the initial years. This business strategy brought immense dividends to the company as per the recent statistics. Amazon has realized the potential of e-business very well and they focused on expanding the business by the initial revenues they obtained. The success of e-business lies in how long a customer spends time in an e-business website. In order to encourage the customers to stay back in the site, the site should provide interesting things based on the customer requirements. Amazon has realized this strategy from the beginning itself, and focused on strategies which attract the young generation. Advertisements are one of the main weapons in the hands of e-business entrepreneurs in order to attract customers to their website. Amazon has used this weapon judiciously in order to increase the traffic to their sites. They have offered lot of facilities for the site users like free reading of books, hearing of music, watching videos etc which they were able to convert into online sales later. The e-business site should be a customer friendly one in locating products, ordering, having questions answered in a timely manner, and other convenient options. It should provide enough information regarding the product or services to the customers. The technologies used in the construction of the site must be current and it should encourage customer’s feedbacks and comments and should implement them in practice. “The current technologies like real time chats, message boards, and online events will further enhance the customer interests in the site” (Huff , n.d) Amazon has incorporated all the facilities mentioned above in their sites in order to make it user friendly as much as possible. “A state-of-the-art E Business Strategy would generally include: Supply chain management, Customer service and customer relationship management, Inventory and service management integration and Tactical operations alignment (E Business Strategy, n.d) Supply chain management may include the proper collection of orders and the delivery of goods in time so that the customer gets the goods without any time delay. It is necessary to keep sufficient inventory all the time so that the customers should not be worried about the availability of materials online. The tactical operations must direct towards short-term goals while the planning must target the long term goals. The World Wide Web (WWW) provides an opportunity to customize the business activities. In most of the other businesses, the strategies often target a group of people from the society. Customizing of product and services is difficult in such cases. The customers have different tastes and different beliefs based on their gender, age, and educational level. In other businesses it is difficult to cater the needs individually. But in e-commerce customization of business is possible up to certain extent. Amazon website always keeps records of the customer requirements and they offer a wide range of customized services. For example, a person who wants to purchase a book online can search for that book and its contents before purchasing it through Amazon website. Moreover they can even read some portions of the book also before taking decisions about the purchasing. Amazon has created websites for different countries like UK, USA, France etc in order to incorporate more facilities in their sites based on the tastes of the people in these countries. It is difficult for a business to stay in the market with a single product and a single market alone. Especially in the era of Globalization, the domestic and international markets are wide open and the opportunities are immense. As the markets are growing internationally opportunities also will follow the market. The number of suppliers is also increasing day by day and there will not be any lack of resources to start an e-business. Amazon has realized this and at present they have already diversified into other business activities like selling of CDs, videos, DVDs, electronics, toys, tools, home furnishings and house wares, apparel, and kitchen gadgets film production etc. Just like the constructing of a building, the construction of the e-business website also should seek the help of an experienced architect in order to make it more user-friendly. The architecture of the website must be done in such a way that it should be easily accessible to even ordinary customers. Most of the people do not have the patience to wait for longer times to upload the web pages and hence the web pages should not be filled with too many graphics and other items which require longer time to execute. The communication between the customer and the entrepreneur is taking place through the website and hence such communication methodologies must be easily understandable to the customers. The most difficult process of e-business lies in the translation of business languages into technical terms of the computer and the internet. Pros and cons of E-commerce The main advantage of E-commerce is the user-friendly experience atmosphere it provided to the customers. Moreover it can provide services 24 hours/day, 7 days a week and can reach all the corners of the world. E-commerce is fast, convenient, cheap, and cheap also compared to other means of businesses. It is easy to shop from home and no need to rush to stores to purchase goods. Moreover it is possible to purchase 24 hours/day and 7days/week. “On the one hand, e-commerce may reduce many of the disadvantages associated with an isolated location by decreasing marketing, communication, and information costs and increasing access to lower cost suppliers and services. On the other hand, geographically isolated businesses may find increased competition for their "local" or "traditional" customers from nonlocal Internet businesses.” (Barkley et al, n.d, p.1) Security and safety seems to be the major problem in doing e-business. Because of the hacker’s threat it is not safe to provide the much needed information about the credit cards for online purchasing. Credit card forgery scams are increasing day by day and people are reluctant in giving the credit card details to internet websites at present which is a major factor of concern for the e-business entrepreneurs. Moreover E-business may not provide the direct feel of the goods before purchasing though photographs may be available which can be considered as another disadvantage of doing e-business. Conclusions E-business is one of the rapidly moving business sectors in the world. Like all other business activities, e-business also employs the scientific management techniques. The main advantage of e-business over conventional business is that it can reach the customers individually and can offer customized products and services up to certain extent. But at the same time online purchasing may create problems for the customers because of the infiltration of hackers to forge the credit card details provided for the online purchasing activities. Another disadvantage of e-business is its inability to tackle false claims of its competitor because of lack of physical evidence it can offer to the customer. Like conventional offline businesses, proper business strategies are required for the success of doing online businesses. References 1. Amazon.com, Inc.(n.d), Retrieved 7 September 2009 from http://www.fundinguniverse.com/company-histories/Amazoncom- Inc-Company-History.html 2. Barkley David L., Markley Deborah M.& Lamie R. David (n.d)m, E-COMMERCE AS A BUSINESS STRATEGY: LESSONS LEARNED FROM CASE STUDIES OF RURAL AND SMALL TOWN BUSINESSES, Retrieved 7 September 2009 from http://www.ruraleship.org/content/cr_2/2_000287.pdf 3. Eschen Erin, (2005), E-commerce - Reasons to sell online, Retrieved 7 September 2009 from http://www.monstersmallbusiness.com/ecommerce-strategy/article- reasons.asp 4. E Business Strategy, (n.d), Economy Watch, Retrieved 7 September 2009 from http://www.economywatch.com/business/e-business-strategy.html 5. Huff Priscilla Y. (n.d), Starting an e-business: What’s involved? Retrieved 7 September 2009 from http://www.eworkingwomen.com/experts/starting.html Read More