The Internet and the Role it plays in the Lives of Consumers and Businesses - Term Paper Example

? The Internet and the Role it plays in the Lives of Consumers and Businesses Executive Summary The internet has quickly revolutionized the manner in which businesses conduct their advertising and marketing activities. As a result of the internet, there has emerged a new class of business enterprises that are seen to essentially not exist in brick and mortar form. These companies are seen to only exist in the form of online advertising and the presence of a website through which they are able to conduct their business. Most of the companies in the modern business world tend have resorted to using the internet as a major supplement for their radio and newspaper advertisements, this is especially so in the event that these companies happen to target younger potential customers. Since its development, the internet has continued to quickly grow and has managed to develop e-commerce. Most modern companies and individual customer are now actively using e-commerce and the internet to conduct their business, obtain information and make purchases. This paper will look into critically evaluating the role that the internet is seen to be playing in the lives of not only the consumers but also in modern day business. Contents Executive Summary 2 The Internet and the Role it plays in the Lives of Consumers and Businesses 5 What is the Internet? 5 The Role of the Internet in Business 6 The Development of E-Commerce 6 Improved Ease of Communication in Business 6 Improved Lowering of some of the Operational Costs 7 Better Control Over the Supply Chain 7 Providing Companies with a Larger Customer Base 8 Enable Networking between Businesses and Other Relevant Organizations 8 The Development of Global Production Networks 9 Make Gains From the Effective Utilization of Affiliate Programs 9 Customer Feedback 10 Online Surveys 10 Roles Played by the Internet that Impact Businesses Negatively 11 Perpetual Lack of Trust and Security on the Internet 11 Restrictive Local Laws 11 Intellectual Property Management (Copy Cats) 12 Harder to Effectively Differentiate and Inform the Targeted Customers 13 Company Websites Face Possible Hacking 13 Benefits of the Internet for Customers 13 Cheaper and More Flexible as Compared to Offline Advertising 13 The Ability to Purchase Goods and Services at any Time 14 Timely Customer Service 14 Announcements and Promotions 14 Improved Bargaining Power for Customers 15 Share Experiences on Company Blogs 16 Disadvantages of the Internet for Customers 16 Conclusion 17 Bibliography 18 The Internet and the Role it plays in the Lives of Consumers and Businesses What is the Internet? According to Shuman (2001), it is gradually becoming more and more difficult to reach a consensual working definition of what exactly is the internet. However, it can broadly be defined as a worldwide interconnection of thousands of separate computer networks. The Internet was originally developed in the 1960’s in the United States and it was intended to help link the country’s government agencies with various universities and colleges. However, the internet’s real expansion was first witnessed in the early years of the 1990’s when thousands of different companies as well as millions of individual persons realized that they could actually be able to easily afford the necessary telecommunication technology as well as the graphic browsers that are found to be vital in securing access to the internet as well as exchanging messages (Oggerino, 2001). Since its introduction, the internet has played a strategically vital role in revolutionizing communications and computers. The internet is found to serve multiple roles by acting as a mechanism through which information can be disseminated, a vast and intricate world-wide broadcasting capability as well as acting as a medium that allows interaction and collaboration between various computers and the individuals operating them all over the world regardless of their present geographical location (Betz, 2011). The Internet is widely regarded as being a successful example of the numerous benefits that can possibly be attained by ensuring the availability of adequate investment promoting research as well as creating an environment that is suitable for the development of information infrastructure. The Role of the Internet in Business In the year 1997, Andy Grove who was the then chairman of Intel was quoted as stating that in a time period of about five years, all companies will essentially have transformed to become internet companies and if they fail to do so, they won’t be regarded as being companies at all (Kennedy, 2003). Although this statement can variously be considered as having been highly exaggerated and a little bit arrogant as are most statements that related to the information-technology industry, it is found to essentially be probably right. The Development of E-Commerce The probable potential benefits that are seen to be commonly associated with internet-enabled business organization’s transformation is commonly perceived to be enormous. The internet has managed to create an entirely new business function that is now commonly referred to as e-commerce or e-business. The term E-business is seen to refer to the use of various business technologies as well as the internet in the daily operations of a given company. So far, most companies have implemented various policies that have seen them implement a variety of business technology as well as the use of the internet in a myriad of business operations. However, although some companies can be considered as essentially being leaders in regards to the development and usage of business and internet technology, there are some other companies that have not been as successful and have been seen to experience various challenges in regards to the implementation of business technology and the use of the internet in their operations (Pankaj, 2005). Improved Ease of Communication in Business A key characteristic of e-business is a business enterprise having the innate ability of being able to effectively communicate by transferring information via the internet. Most companies have been seen to have adopted the use of e-mail servers that serve to allow both employees and company managers to send information as well as internal messages through various e-mail communications mediums. Most companies have also developed business websites that help customers adequately review most of the information about the company as well as its product offering before they decide on making any purchases. These websites also serve to create a means via which customers are able to easily communicate with the company in question (Krizan, et al. 2011). Improved Lowering of some of the Operational Costs The internet has provided various opportunities via which companies and businesses can be able to maximize their operational costs resulting in a subsequent lowering of these costs as well as save capital on services as well as goods production. The internet has facilitated the development and utilization of various computer software that help track the various business operations as well as offer a critical review of the overall effectiveness and efficiency of each department in an organization. These software packages provide information to the managers and company executives that help them make more informed decisions as pertaining to the efficiency of the business enterprise’s operations. To improve the effectiveness of these software, some technology savvy companies have opted to implement policies that help enhance the effectiveness of their entire supply chains by using the internet to communicate important information to the company’s warehouses, distributers as well as the retailers who happen to handle the company’s products. Better Control Over the Supply Chain Most of the companies that operated in the more traditional business setting were found to experience severe challenges in their attempts to try and directly sell their various product and service offering to other businesses as well as to their general consumers. It was therefore essential for these companies that mostly comprised of intermediate goods producers as well as manufacturing companies to utilize the services of a middleman who could be able to help sell the company’s goods and products in the market. Nevertheless, with the advent of the internet and its various technological developments, it is now possible for these companies to set up electronic order systems and websites that help them to effectively sell their various services and goods in addition to helping them develop essential pipelines that help them to effectively generate future sales. Providing Companies with a Larger Customer Base One the foremost advantage of the internet to businesses is the expansion of a business enterprise’s potential customer base. Most business enterprises that operate in a more traditional setting are seen to largely rely on a relatively small market to help them sell their products and service offering. This market is commonly limited by geographical boundaries, the reach of their supply chain as well as the reach and effectiveness of the middle men involved in the supply chain. However, the internet provides an insurmountable potential for business enterprises to expand their customer base (Sadeh, 2003). As a result of the internet, it is quite possible for a relatively small business enterprise to set up a website that can help it effectively compete with some of the other larger and more established businesses in a given area. Businesses enterprises that happen to conduct some of their business online have the innate potential of gaining customers not only from within their own locality but also from around the world. This is mainly because internet companies are seen to operate 24 hours a day (Sadeh, 2003). Enable Networking between Businesses and Other Relevant Organizations The internet provides a range of diverse networking opportunities that help businesses network with other businesses as well as with other relevant organizations such as market research centers. These networking opportunities are seen to help business enterprises to establish the latest opportunities in their concerned market segments. Businesses can also be able to easily network with organizations such as market research centers that can help provide the business enterprise with crucial data on the latest market trends. This information can then be used by company executives and managers to offer aid to them in the critical decision making process and help the business enterprise to be able to capitalize on the available opportunities. Most company executives have been able to effectively utilize this potential to help their business enterprises to experience growth. The Development of Global Production Networks The internet has been seen to play a critical role in the promotion and development of global production networks, these networks have quickly grown to be widely regarded as being important organizational innovations. This is mainly because these networks are able to easily integrate the often widely dispersed customer and supply bases of most multinational and multidivisional network flagships (Kraemer, 2006). A global production network is seen to encompass global relationships that are often seen to have been established with the sole purpose of attempting to the innate needs of a flagship’s diverse business activities which are normally seen to widely range from research, product design, development, distribution, manufacturing as well as various support services. Global networks also include the flagship company’s affiliates, suppliers, subsidiaries, service providers, subcontractors as well as partners with whom it has managed to form strategic alliances (Kraemer, 2006). Make Gains From the Effective Utilization of Affiliate Programs The internet has been seen to have made it possible for companies to be able to make added benefits from participating in various affiliate programs. Companies are able to market the products and services of other companies that offer complementary products and services to that particular business’s product and services offering. These affiliate services and products might include services such as after sales services or products such as machine spare parts. By participating in these affiliate programs both companies stand to make gains as the main company will be able to make some extra revenue by its marketing of the complementary products and services being offered by the affiliate company while the affiliate companies will stand to make more revenue from the advertisements made on their behalf by the main company (Manzoor, 2010). Customer Feedback The extensively interactive nature of the internet has enabled companies to be able to easily obtain customer feedback. It is possible for companies to be able to set up internet based systems that are designed to help them to easily obtain vital customer feedback in regards to their services or products. Due to its intrinsic ability of receiving the customer feedback that has submitted by their customers almost instantaneously, the internet has made it possible for companies to be able to quickly respond to adequately respond to the various customer concerns in a timely fashion and hence be able to increase not only the eventual customer satisfaction but also the quality of the general customer service (Humphrey, 2011). Online Surveys The traditional methods involved in performing surveys are found to often be quite expensive in addition to being relatively slow, this is as compared to conducting online surveys over the internet. The internet is seen to have played a key role in reducing the cost involved in conducting survey as well as in drastically reducing the duration of time it normally took to be able to conduct an effective survey. With the traditional methods of conducting online research, it was often important to compile a large list of addresses and then mail questionnaires to many customers so as to be able to receive necessary data that would help in future product development. This used to cause companies to incur huge costs in sending out the questionnaires while losses would be undergone when some of these customers would opt not to participate in the survey. The analysis of the data would also be quite time consuming and costly. However, with the use of the internet, it is now possible to fully automate the entire process involved in conducting the survey. The subsequent results of such a survey can then be automatically updated onto a database within a time period of a few seconds (Humphrey, 2011). Roles Played by the Internet that Impact Businesses Negatively Although the Internet has been proven to play an essential role in the promotion of businesses, there are however some roles played by the internet that have been noted to negatively impact businesses. Some of these negative roles played by the internet in business include: Perpetual Lack of Trust and Security on the Internet Customers often tend to be wary of purchasing services and products online. Companies cannot be able to effectively establish a rapport with their customers in person when they operate their companies as internet businesses. It is therefore important for companies to try and receive certification from the established and better known online security organizations such as VeriSign or Trust which is a popular internet watchdog organization. However, even after taking care to establish all the necessary precautions designed to improve the trust levels of potential customers over the internet, some segments of the buying public may still not feel entirely comfortable with providing their personal payment information over the internet. Identity theft is a common and legitimate fear for customers visiting company websites and shopping online. Businesses need to be ready to ensure that they make heavy investments designed to offer the very best security policies to customers (Kautonen and Karjaluoto, 2008). Restrictive Local Laws When a company conducts its business operations online, it becomes subjected to the various laws and regulations of the country where its customers can be able to access its company website so as to purchase the services and products on offer. If a company happens to be mainly situated in the United States, it becomes subject to the various privacy laws that are observed in not only the United States, but also overseas as well. These laws might include diverse tax and copyright laws dependent on the company’s location. If a company website happens to contain material that should not be accessed by individuals under a certain given age, it becomes important for the company to ensure that it complies with the country’s legal provisions before the company website can be allowed to go online. Some of the laws in some countries can be extremely restrictive and could potentially critically disadvantage companies wishing to setup company websites that will be mainly based in these countries. Intellectual Property Management (Copy Cats) The internet has created an avenue whereby individuals and companies offer creative work and designs to an ever increasing worldwide audience. Various internet craft sites as well as T-shirt shops are now able to provide both sales and profits to persons who develop original products and designs for their innovative works. Corporate organizations are now able to transfer projects, books as well as conduct important meetings by utilizing several internet tools such as email and video capabilities with relatively very little effort (Shippey, 2009). However, the theft of this original content is found to be relatively easy and is seen to only require a relatively small-time investment. One of the industries that has been most affected by a continuous theft of intellectual property is the entertainment industry. The industry has had to continuously grapple with large-scale illegal file sharing spanning over many years, while the print media is also plagued with problems over digital rights and ebook reader technology management. It has been found to be relatively difficult for companies and government organizations to effectively keep the copyright laws intact and this has been seen to make it relatively very easy for one business organization to copy another company’s entire trade mechanism and business on the internet. It is due to this that it has become important for businesses to ensure that they implement policies that will help them establish an appropriate balance between consumer accessibility and a possible loss of the company’s profits (Shippey, 2009). Harder to Effectively Differentiate and Inform the Targeted Customers Due to the easy access that customers have to any information that they might require over the internet, it has proven to be progressively more difficult for companies to push the information, products and services to their target consumers due to the fact that these consumers are constantly bombarded with a wide array of choices a factor which sometimes causes them to not concentrate on the information being provided by the company in question. Company Websites Face Possible Hacking Most individuals who have created personal accounts on various company websites have been known to report having experienced hacking incidences on these accounts. According to Kinrossrender (2013), it is approximated that almost about 29 percent have had the misfortune of having had at least one of their accounts getting hacked. This has grown to become a major concern that has often resulted in the affected individuals opting not to revisit the company websites on which their accounts were hacked. This has been seen to result in a potential loss of revenue of for the affected companies as the potential customers opt to buy products on services from the websites of other competing companies (Quigley, 2011). Benefits of the Internet for Customers Cheaper and More Flexible as Compared to Offline Advertising As a result of internet marketing being essentially cheaper as compared to offline marketing which is seen to involve various costs such as postage and printing expenses, internet marketing is seen not to avoid all of these costs and as such, companies are able to invest more time and money in better product development as well as in the improvement of the customer service. The costs involved in selling products or services to customers are also seen to be greatly reduced which is seen to translate in reduced costs for customers when they purchase the services or goods on offer. Due to the relative cheapness of internet marketing as compared to traditional offline marketing, companies are able to advertise more goods on offer as well as provide more information to the customers which helps the customers make more informed and accurate decisions in their general purchases decision making (Epstein, 2004). The Ability to Purchase Goods and Services at any Time The internet enables customers to be able to make their various purchases at any time regardless of whether it is during the day or during the night. The internet has provided customers with the option of purchasing services and goods without essentially having to leave their homes. Timely Customer Service The internet is seen to greatly help customers receive adequate and timely customer support from various companies. As a result of the internet, when a customer sends any enquiries or suggestions to a company, the company is able to receive the information almost instantaneously due to the fact that webpages are able to update almost immediately with the new information and the company therefore has ample time to promptly respond to the customer’s question and suggestions. This serves to increase customer satisfaction (Epstein, 2004). Announcements and Promotions The internet also serves to distribute announcements to millions of customer who may be spread all over the world in a timely manner. As a result of there existing virtually no time lag in the dispensation of information over the internet as is common with the traditional means of dispelling information offline, the internet is found to basically be an ideal medium that can effectively be used to quickly disseminate information. Receiving various announcements such as news on currently ongoing promotions via the internet is found to be quite beneficial for customers as they can quickly be able to take advantage of the promotions in question before they expire. When a company plans to effect an announcement regarding an ongoing promotion, it can effectively do this by utilizing the use of a variety of multimedia tools and graphics that will serve to draw attention on the company’s website towards the promotion in question, customers are then able to realize the benefit of purchasing more products or services at a relatively cheaper rate. Companies can also be able to make announcements pertaining to the establishment of new stores closer to customers in a given region. This can help make it easier for customers who would normally have to travel relatively further so as to be able to access the products or services provided by the particular company. Improved Bargaining Power for Customers The internet has served the role of increasing the bargaining power that is currently enjoyed by customers. With the traditional business setting, it was relatively difficult for customers to compare the prices of a service or good that they were interested in across several different stores as doing so often required that they sometimes travel across large distances. However, the internet has served to make it easier for customers to quickly compare prices across a large number of stores both quickly and effectively. They are then able to make cost effective purchases (Steinbock, 2005). Customers are also able to provide vital information to the more expensive stores informing them of the availability of the commodity at a cheaper price at a competing store. This can serve to cause the company to review the price of the commodity or service downwards at a more competitive rate which is seen to cause the customers to make more savings in their purchases (Steinbock, 2005). Share Experiences on Company Blogs The internet has provided customers with the opportunity of being able to actively interact with other customers and be able to get their opinion in regard to products and services that are being offered by a given company. By utilizing the use of company blogs, customers are able to get informed opinions from other customers who have previously used the service or bought the commodity in question (Fatayerji, 2004). Customers are also able to quickly communicate with the company by using these blogs. Disadvantages of the Internet for Customers The roles that are played by the internet that are seen to critically disadvantage customers are found to be similar to those that affect businesses. Disadvantages such as lack of trust and security over the internet have been seen to have resulted from customers experiencing cases of theft over the internet when the provide their personal payment information while attempting to purchase services and goods over company websites (Fatayerji, 2004). Some customers have also had the experience of having their personal internet accounts being hacked resulting in their identities being stolen. The persons who steal these identities usually use them to run up very high bills and expenses on credit in addition to stealing the money that has already been saved by the customer (Fatayerji, 2004). The internet has also caused customers to experience increased difficulties in purchasing products online as a result of the customers being bombarded with thousands of options. Customers have to go through a relatively large amount of information before they can be able to choose the company that they will be purchasing the service or good from. Conclusion The internet is seen to have played a major influencing role in changing the traditional business practices as well as position of customers in the business cycle. The internet has served to have served a critical role in the provision of diverse benefits to both businesses and consumers. These benefits are seen to range from reduced advertisement costs for businesses, large market share and penetration to making it easier for business organization in general to be able to carry out cheaper and more effective market surveys. Customers are also able to experience several key benefits that are seen to result from the role played by the internet such as it is now relatively easier for customers to be able to make various purchases from their homes, they are also able quickly compare the price of a given commodity between different stores before making a purchase a factor which makes them gain more bargaining power. However there are several innate disadvantages that have been seen to affect both customers and businesses as a result of the role that the internet is seen to play. Some of these disadvantageous roles that are played by the internet are seen to include, increased risk of identity theft on the part of the customers and the common fact that business enterprises and especially so those in the entertainment industry are finding it increasingly difficult to adequately safeguard their intellectual properties (Fatayerji, 2004). Regardless of the specific role that the internet has been seen to have played that has impacted either customers or businesses, it’s continuous and general influence cannot be ignored and it is important for all business organizations and customers to ensure that they continuously evaluate it so as to effectively determine any advantages they stand to reap or the potential dangers resulting from the role played by the internet. Bibliography Betz, F., 2011. Managing technological innovation : competitive advantage from change. Hoboken, N.J. : Wiley, ©2011. Epstein, J. M., 2004. prof.Implementing e-commerce strategies : a guide to corporate success after the Dot.com bust. Westport, Conn. : Praeger. Fatayerji, C. N., 2004. Electronic marketing : advantages and disadvantages. Boca Raton, Fla.: Dissertation.com. Humphrey, D., 2011. Customer service. Mason, OH : South-Western Pub. Kautonen, T. and Karjaluoto, H., 2008. 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