E - Commerce

1. Why should I adopt e-commerce? 
   E-commerce can enhance a firm’s competitive advantage. Among the benefits one can expect from e-commerce are:
1. Increased global presence: Internet creates a world without boundaries and allows businesses to expand their market to any part of the world without the need to set up their physical premises there. Basically, customers from any part of the world can access the firm’s e-commerce website and make their purchases.
2. Convenience to customers: Customers will be able to shop at their convenience, especially since the website would be operational 24 hours a day.
3. Alternative mode of advertisement: Providing information on the website also functions as an advertisement for the business.
4. Disintermediation: Doing business over the e-commerce website allows the firm to reach out to customers directly without depending on intermediary steps. This not only helps cut cost but also help the firm better understand its customers.
5. Reduced transaction cost: The accessibility of Internet has helped reducing the costs of searching for buyers, distributors, or suppliers significantly.
6. Coordination between strategic partners: e-commerce supports effective coordination among strategic partners. For example, the use of supply chain management coordinates supply flows between the firm and suppliers in an efficient and timely manner by integrating procurement, production and logistics processes to supply goods and services from their sources through to delivery to the customer.
7. Customer personalisation: Internet technology used in e-commerce to offer web personalisation provides similar benefits as using salespeople.
2. I feel e-commerce is too good to be true? Are there any challenges that I need to be concerned about?
   Yes, some management challenges that must be considered are:
1. Inadequate security: There is a possibility that sensitive and private information may be exposed to security risk over the Internet.
2. Achieving coordination: e-commerce requires careful orchestration of the firm’s departments, production sites and sales offices, as well as closer relationships with strategic partners (e.g. customers, suppliers, and other business partners) in its network of value creation.
3. Technology problems: Technical problems such as the lack of standards, the growing need of bandwidth, inadequate telecommunications facilities in many less developed countries, and the abundance of data without the technical ability yet to search for and locate it quickly and easily may hamper e-commerce efforts
4. Legal problem: Local and international regulations need to be considered for the transmission of data.
3. What should I do when I decide to start and operate an e-commerce business?
   Figure 10.2 shows the steps that should be taken to operate an e-commerce website.
   
   Click on each box to view more detail.
   
   
   
   Figure 10.2:  Steps taken to operate an e-commerce website
   
   The explanation for Figure 10.2 are as follows: