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Electronic-Business Trends and Opportunities. Abstract

Electronic-Business: Trends and Opportunities. 6

Electronic-Business:Trends and Opportunities.


Electroniccommerce is one of the most profound technological advancement thatis changing the way of doing business in our world today. The impactelectronic commerce has had on procurement processes, shopping,business collaboration, and customer services as well as on deliveryof various services is so far reaching that almost every organizationis taking up e-commerce as a mode of transaction. Intel corporationdid all of its business by paper before 1997. All transactions werereceived via telephone and fax making the supply and distributionprocess slow, expensive, and strenuous to keep up to date and followup on transactions. In 1998 an electronic platform was developed tohandle online sales and customer support for their products. Theresults were phenomenon, order processing was done much faster,clients were able to track their products in transit and keepingrecords up to date was made much easier. Intel was also able tomaintain a customer customized database that provided information tothe customer depending on his/her needs. Documentation indicates thatfaxes from Taiwan alone were able to decrease by 180,000 annually.The Intel case illustrates a new revolutionary way of doing business.E-commerce has the potential to increase sales, provide customerservice, and improve the overall performance of internal businessprocesses.

Thispaper will explore electronic commerce, how it came about and wasdeveloped, its models in business, how it is implemented, itsadvantages to organisations, customers and society, its limitations,the challenges it is facing and areas of further development.


Commercein its current modern form can be traced back to Italy in the 13thcentury where a very stable and conducive political environmentprovided the foundation for the growth and development of trade. Thisled to efficiency in the process of getting goods from producers totheir consumers. The surge in trade also provided fertile grounds forthe spread of ideas and information from one place to another. As aresult of these some business practices and institutions begun toemerge. This include bookkeeping, banking, insurance, trade markets,insurance and venture capital investments.

Thesedevelopments led to globalization and the emergence of networkorganizations to support business-to-business relationships. Thedevelopment and consequential boom in information technologywitnessed in the late 20thcentury had its effect on business as they knew it. The internet waspenetrating the lives of millions of people globally. Withinformation systems being developed to support business, the conceptof E-commerce was born. E-commerce can be defined as the process ofselling, buying, transferring or exchanging goods/services and/orinformation via computer networks. A broader look at the concept canbe regarded as E-business.

WhereasE-commerce can be seen as focusing solely on transactions, E-Businessis a broader definition of E-commerce (Angehrn, 1997). E-Business canbe defined as the use of internet and other information to supportcommerce and improve business performance (McKay and Marshall, 2004).Some people have however disputed this definition to regardE-Business as technological activities in a business that do notinvolve buying and selling over the internet. Over the years,E-commerce has developed to accommodate a wide variety of usersdepending on its use. It is this users and the role it plays thathave been used to determine which class that particular facilityfalls in. the various categories can be summarised as follows:

Business-to-business(B2B):transactions take up the bulk of all electronic transactions takingplace today (Mocklet etal,2006). These transactions mostly involve collaborative commerce wherebusinesses make partnerships such an in supply chain management anddistribution of products.

Business-to-consumers(B2C):where the consumers are individuals.

Consumer-to-business(C2B):transactions usually happen when consumers need to make anorganization realise the need for a particular product.

Consumer-to-consumer(C2C):transactions usually involve an individual selling a product orservice to another individual.

Intra-businesse-commerce: in this situation, an organisation uses electronicplatforms internally to improve its business operations.

Government-to-citizens(G2C):governments also use electronic platforms to provide services to itscitizens.

Mobilecommerce (m-commerce):this is where e-commerce is conducted over a wireless environmentsuch as mobile phones.


E-commercehas increased the speed and ease with which business can betransacted. This has resulted in increased competition as vendors andsuppliers keep up with the technological developments to remainrelevant. Electronic mediums currently enable people to write andcash cheques, pay bills, trade stocks, buy goods, and take loans.These mediums are developed to perform various roles in aiding thetransactions of a business.

Buildingan electronic business platform is usually and expensive affair thatmost medium and small size enterprises do not want to engage in.there are however some affordable options available such as usingTurnkey solutions or using an existing e-business template thatoutlines the basic structure of the business and allows customizationof the design (Angehrn, 1997). These means that different businesseshave the ability to develop different models depending on theservices they wish to provide electronically. Different models haveso far been developed to suit the different needs of their users.These models can be summarised as follows:-

Thestorefront model:This is the most common model used in electronic business today. Thefrontstore model provides for transaction processing, online payment,information storage and security. This model allows for merchants todevelop online catalogues for their products, take orders forproducts, receive payment and deliver products to clients. It alsoallows the traders to advertise more products that are available forsale and respond to customers queries.

Theshopping cart model:This model allows customers to accumulate items they wish to purchaseas they peruse through the website. This is convenient for customersas they are able to put all their purchases in one basket and pay forthem at once hence minimizing transactions costs involved with onlinepurchases. This model also allows the customers to take advantage ofdiscounts and after sales services such as delivery issued for bulkor purchase of multiple items. Amazon.com offers a very good exampleof this model.

Theauction model:The web has been developed to host a wide range of auction sites aswell as search engines that can locate the lowest price on items forsale. This model allows the user to either be the buyer or theseller. The sellers are given the privilege of posting items forsale, the time duration or the auction and the minimum amount theywould settle for. Some sited also offer the option of an instantpurchase rather than waiting for the auction to close. Buyers thenplace bids for the item and the highest bid purchases the item. Ebay.com is the best example of this sort of model.

Thismodel provides a two way facility where some sites allow buyers tostate the item they wish to purchase and then sellers can post theprices they are willing to settle for. Although the reverse pricefocuses on the sellers, the buyer can set the maximum price they arewilling to pay and sellers can much that. If no seller is able tomatch the maximum price set by the buyer then the bid is usuallyconsidered unsuccessful. An example of this model is used onpriceline.com

Auctionsites rarely handle payments but have approved methods of paymentthat can be used. Once payment is verified they acknowledge it andthe delivery is made. Auctions sites usually earn commissions fromthe transactions that take place via the websites.

Portals:This model offers its clients a one stop shop online experience. Thevariety of products found on the website is practically unlimited andthey mostly act as a link or advertiser for products online. Theycontain information on the recent trends, the best bargains and muchmore. They often come with a search engine that enables one to findany product on the website. This sought of websites are mostly usedfor advertising and sellers pay for space on the website as well asthe number of clicks received on each link for most portals.

Nameyour price model:The model offers customers the privilege of stating the price theyare willing to pay for a particular product. In most cases the buyeris obligated to pay once the price has been accepted and due to thisthey are required to provide purchase information before the bid asmade.

Comparison-Pricingmodel:The comparison pricing model has become very useful with householdshoppers of late. The model allows to the customer to compare theprices of multiple products from multiple traders allowing them topick the trader with the lowest total price for the combination ofgoods and services. This model has been used extensively when peopleare shopping for home appliances, furniture and even generalhousehold goods.

Bartering:This involves offering one item in exchange for another withoutmonetary exchange. It is usually facilitated by intermediaries whoreceive items and evaluate their monetary value. They then try tofind potential clients to trade the items with. Final agreementsusually involve a combination of bartering and money top ups sincepure bartering is difficult to achieve.

OtherE-Business models not involving transactions

E-marketing:the internet has the capacity to reach a very large audience andbusinesses that are able to perfect the skill of e-marketing oftenhave an edge over the competition. E-marketing is achieved throughvarious steps such as branding, market research, e-mail marketing,online promotions, consumer tracking, advertising, and the use ofsearch engine requirements to influence how close to the top the siteappears on the list of search results.

Thesemodels are not rigid and some sites could offer multiple services notnecessarily restricted to one particular model. However, they offerthe basis on which e-business is conducted today.

E-businessand management information systems

Managementinformation system (MIS) refers to a computer-based systems thatenable top level management to organize, evaluate and efficientlymanage departments in the business (Smith, 2001). The system shouldbe able to provide past, present and future projections in theinformation it provides. In light of this, a management informationsystem should include databases, hardware resources for the systemsand software that is capable to analyse and put together informationthat is useful in decision making. Human resource management andproject management capabilities should also be present in themanagement information system so as to assist in the efficientrunning of the organization. Most Important is that the system shouldbe easy, fast and economical to maintain.

E-commercepractices such as computerised bookkeeping, supply chain management,orders, sales and purchases have revolutionised the managementprocess in business (Smith, 2001). The use of these systems has madeit easy to harmonise the transactions and analyse the information.The system is able to process data from various departments andprovide important information and indicators to the managers. Thecomputerised systems have replaced the long and tedious processes ofmanually checking books, reconciling accounts, producing financialstatements and retrieving important data quickly.

Benefitsof E-commerce to organisations

Globalreach:the online platform has provided a platform for businesses andorganisations to reach out to masses beyond their physical reach. Theplatform is fast, efficient, economical and global. No other platformcan offer such possibilities.

Costreduction: thedevelopment of computerised systems has reduced the number ofpersonnel needed by organisations to process data. It has alsoreduced the cost of information storage and distribution as a singlecomputer database is accessible to multiple users as opposed to filestorages.

Supplychain management and efficient procurement:electronic systems have reduced the delays formally associated withinventory. The systems provide for continuous stock taking and thuseliminating the need for long hours of closure for stock taking andinventory management.

Innovation:the development of electronic commerce has led to innovation anddevelopment of business models. E-commerce has enabled organisationsto be able to get out information to customers quickly, efficientlyand promptly.

Bettercustomer satisfaction:online facilities provide a platform for clients and companyrepresentatives to interact and consequentially improve the customersexperience and satisfaction.

Benefitsto consumers

Ubiquity:the online platform has provided a medium where purchasing is notrestricted to certain hours and locations. The websites are availableall day and night hence making the consumer shop at his/herconvenient.

Variety:e-commerce has given consumers a variety of products to choose fromon the online stores. This provides the consumer with the opportunityto effortlessly find the product that suits his/her preferences.

Aftersale services:e-commerce has made it easy for clients to obtain after salesservices for products sold. Customers are now able to track theirdeliveries, access customer care services and repair and maintenanceservices.

Informationavailability:the internet provides a vast wealth of information on products andservices offered. This information is useful to help the consumermake the right decision when settling for a product.

Customizedproducts:the online platform allows the customers to make changes to detailsof products they intend to purchase. Details such as custom colours,embedded labels and the like have been made possible by advances madein e-commerce.

Convenientauction participation:sites such as ebay offer a platform for people from all over theworld to participate in auctions of products that would otherwise beexpensive in some parts of the world and having the productconveniently delivered to them.

Disadvantagesand limitations of e-commerce

Lackof universal standards for quality, security and reliability:any time customers are using online platforms to transact they willneed to provide sensitive information regarding their bank accounts,credit and debit cards and residence. The feeling that most of theseinformation can be accessed by other parties such as hackers orerroneously leaked to other parties is a major limitation of usingthe online platform.

Insufficienttelecommunication bandwidth:the current network infrastructure is incapable of handling largevolumes of e-commerce especially on the mobile platform. This has ledto long waiting hours for transactions to be confirmed and sometimeseven system failures that could see clients lose their money.

Softwaredevelopment:order fulfilment of large scale business to customer transactionsusually requires specialised software and automated warehouses thatare very expensive to set up. Even after incurring the cost ofsetting up the above, human capital still plays the biggest role inthe process.

Legaland public policy issues:issues such as taxation on e-commerce sales and content to be put upon the website still remain generally unregulated. This causes usersof the electronic platforms to be cautious on the extent they wish toengage in it.

Otherlimitations include the increasing cases of fraud from virtual tradeand the fact that most people are yet to trust faceless and paperlesstrade. Difficulty in measuring the effect of online advertising,people’s resistance to change are among other limitations hinderingadoption of the platform.

and conclusions.

Despitethe major developments that have been made in e-commerce, it stillaccounts for a very small percentage of trade transactions. Issueswith safety, security and protection from fraud are the biggestdeterrents in using the platform. Though many have accepted these asviable media through which the can pay for utilities such ashousehold bills, mortgages, loans and the like, it is yet to enjoythe same level of confidence on a customer-to-customer level. This isbecause large companies have formed partnerships with those thatoffer e-commerce services such as mobile telephony companies toensure the safety and security of their customers money and sensitiveinformation. This cannot be said to be the case for C2C transactionswhich are based purely on trust that one will deliver once paymenthas been made or one will pay once the delivery has been received.

Currently,e-commerce is not living up to its expectations despite multinationalcompanies setting up online shops and delivery for their clients. Onthe contrary the electronic platforms are used majorly foradvertising purposes especially with the emergence of online socialnetworking. With the current surge in mobile phone usage globally anddevelopment of sophisticated handsets, e-commerce holds the potentialto grow exponentially as everybody will in the near future hold theinfrastructure to engage in e-commerce in their very hands. Companiesand agencies should also work together to determine how safety issuescan be addressed so as to enhance the adoption of the platform. Inconclusion, e-commerce has the potential to overhaul the way businessis conducted today. Costs can be cut, delays can be reduced oreliminated altogether, customer requirements and queries quickly.Further research and development should be undertaken to furtheradvance the concept of e-commerce and push up adoption levels amongbusiness people, companies and other organisations.


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