E-Commerce Market and the Critical Success Factors - Essay Example

Critical success factors are elements which are required by an individual or organization to achieve success in a competitive market. These success factors must be carefully determined, monitored and managed to achieve prosperity and accomplish business goals. As global interest in electronic commerce grows, increasing amounts of research is being dedicated to critical success factors involved in electronic commerce. The following table, obtained from relevant Korean literature, presents the critical success factors that are central to electronic commerce. In the past, critical success factors were typically related to business infra-structure. One significant issue was that of internet speed-with the majority of Internet users connecting to the Internet via dial-up modem, file transfer speeds were extremely low. This presented a problem when attempting to transmit large files such as multi-media files. With steady financial investment from both the government and private business enterprises, the rapid advance of technology in this area has led to the increasingly-widespread use of high-speed Internet connections such as cable modems, ISDN and XDSL, which increase file transfer speeds substantially. With communication speed being a limiting factor for the growth of electronic commerce, these developments in information and communication technology have initiated a marked reduction in infra-structural problems for electronic commerce. More recently, however, new success factors such as security and copyrights have increased in importance. Another significant issue for many Internet businesses is related to expenses. Traditional corporations are able to strengthen business strategies, enhance their image, provide efficient customer service, and create new Internet sales methods. However, popular Web sites have proven to require more resources than was once thought. According to recent research, Web sites which sell products collectively spend approximately 240 Won per year, while sites which sell content spend approximately 1 billion Won per year. Internet sites such as shopping malls, where actual transactions take place, spend around 3.35 billion Won every year. Companies which plan to move into electronic commerce must plan and invest efficiently in the initial stages of development in order to create profit within a reasonable period of time. There are several success factors which should be considered. E-businesses must provide good value for their customers, not only in terms of the products they sell, but also through ease of Web site navigation. They must differentiate themselves from other electronic commerce corporations to create a unique identity, and at the same time take care that they maintain the important characteristics of e-business. It is also particularly important to manage resources carefully and control initial expenses through the gradual introduction of new technologies, while allocating enough resources to brand management to win and maintain the trust of their customers. Research on business models has shown that these success factors are critical. Companies that survive the rapidly-changing electronic commerce environment have unique business fields and business models. The results of research on approximately 30 business corporations are presented here. Above all, successful electronic commerce corporations value for their customers. Through fluctuating markets, these companies continue to be competitive and profit from e-commerce. Many of these companies also successfully compete in off-line markets as well as on-line markets. They manage their brands effectively to maintain consumer trust, and use differentiated services and unique profit models to succeed in what is become a very competitive market-place. Finally, they have organized themselves in such a way that with flexible attitudes and infra-structure they can cope with a changing business environment and introduce new technologies at the most appropriate times. The results of this exploratory research indicate that these five success factors are the most critical for the e-commerce market. The purpose of this research is to provide a foundation for more in-depth study and to explore ways in which the efficacy of e-commerce strategies can be increased. The principle goals of business and the means of attaining those goals do not change whether the business is on-line or off-line. Companies must add value to their products and services such that customers willingly pay for those products and services in a competitive market. Electronic commerce is not limited by time or distance, and with hundreds and thousands of companies vying for superiority in the cyber market, competition is fierce. The characteristics of digital technology allow new business plans to be reproduced easily, however while a creative and competitive business plan is a requirement for success, this is not sufficient in the highly aggressive online business environment. In such an environment, the most important success factor is often gaining both perceived and real superiority over competitors. In order to accomplish their goals, businesses must create added value steadily and consistently-it is not enough to create this value only at the beginning of a business enterprise. Companies must continue to add value to ensure they remain competitive. Read More