Role of E-Commerce in Today's Business - Literature review Example

Role of e-commerce in today’s business Introduction Innovations and developments in information technology have always been continued since the emergence of the Internet. In fact, most of the ways companies and people carry out their daily activities and live at the present are determined with the huge web of electronic networks that is commonly known as the Internet (Turban, Leidner, McLean, & Wetherbe, 2005). Only a small number of tools, techiniques, and technologies have received as quick recognition as the internet. Additionally, the internet technologies are changing and modernizing the ways through which business activities are carried out. In addition, these technologies are also modernizing the basic technological structures on which various corporations are eastablishing their internal information systems. Furthermore, the majority corporations are making use of internet technologies to develop a personal internal network that is aknowledged as intranet. And a lot of corporations are making use of the similar technologies to develop protected business-to-business networks, that are aknowledged as extranets. Thus, these technologies movements are building a significant business model, electrnoic commerce. It is an admitted fact that the Internet has turned out to be a vital part of almost every kind of business. Basically, the simple description of a business is “any activity or transaction that entails the exchange of products and services with an aim of making money or generating profits. However, if this transaction is carried out over the web it is known as e-commerce. In the past few years, the reality of e-commerce has turned into a full-blown business (Ahuja, 2011; Melissa, 2010; Pozin, 2012). Now people want to shop from home by using their computer with a single click and the Internet has made it possible. Now the latest tools and technologies over the Internet have made the life easier. They have provided a large number of benefits to the customers and brought numerous opportunities for the businesses. According to Laudon & Laudon (1999), only few technologies have received as rapid recognition as the internet. Since, the tools and techniques offered by the internet are changing and improving the methods through which business operations are performed. In addition, these techniques and tools are also modernizing the traditional business arrangement on which a number of organizations are building and implementing their in-house or internal information systems. Additionally, at the present, many organizations/businesses are utilizing the internet techniques and applications to build a private domestic network which is known as intranet. However, several corporations are making use of these applications and methods to build protected business-to-business networks that are acknowledged as extranets. Thus, these technology movements have given birth to an imperative business approach that is electronic commerce. Since, the e-commerce encompasses carrying out both inside and outdoor business over Internet, intranets, and extranets. In addition, the e-commerce encompasses selling and purchasing of services, goods and products, the simplification of everyday business operations or processes, and the payments matters via digital communication (Whitten et al., 2000, p.23; Laudon & Laudon, 1999, pp. 24-25). This paper presents a detailed analysis of e-commerce and its role in today’s business environment. This paper will discuss some of the important aspects associated with e-commerce, such as issues, advantages, and opportunities offered by e-commerce. This paper will also discuss some examples of industries where the use of the e-commerce has revolutionized the business environment. Discussion The innovations and developments in the Internet carry on growing quickly, through which both new and well-established businesses are taking benefits online. In this scenario, e-commerce has emerged as a very attractive and helpful tool. It is an admitted fact that its influences on business economy will be as important as the shift from the agricultural financial system of the 17th Century (Shaik, 2007). In addition, despite the offering numerous advantages to regular customers, e-commerce has made business simpler and extra efficient for retailers and merchants. In fact, the innovations and the developments in information technology have offered a quick, inexpensive ways to sell and market products and services. Due to the mass applications of the Internet and the huge advertising and visibility the marketing has turned out to be an essential part of the e-commerce business model. Additionally, the e-commerce as well presents less transparency, an extensive market base, and reduces the need for a physical storefront. Moreover, with e-commerce businesses are able to expand far further than their restrictions of a physical store, however it as well outlines a marketplace at risk of becoming flooded that is why internet marketing is one of the most fundamental areas and aspects of the e-commerce business model (Ahuja, 2011; Melissa, 2010; Pozin, 2012; Shaik, 2007). A research by emarketers conducted on e-commerce shows the e-commerce stats in the upcoming years in a variety of geographic zones. Their research outlines a wide variety of aspects that can affect the evolution of e-commerce and new developments in coming few years. I have outlined below the potential growth of e-commerce in coming few years: (Ahuja, 2011; Melissa, 2010) Figure 1 E-commerce Expansion Image Source: http://www.searchenginejournal.com/the-future-of-e-commerce-and-online-business/27002/ Figure 2 E-commerce Expansion Image Source: http://www.searchenginejournal.com/the-future-of-e-commerce-and-online-business/27002/ Figure 3- E-commerce Expansion Image Source: http://www.searchenginejournal.com/the-future-of-e-commerce-and-online-business/27002/ According to the above shown graphs, the sale of mobile phones has as well augmented recently. In addition, another research conducted by the BlogSpot on Smartphones sales in the time period between July and September in 2010 amounted to 4.7 million units, which is an increase of 270 percent when compared to the similar among April and June in 2010. Hence, the future of e-commerce seems bright. In addition, it offers advantages for both the consumer and retailer. Moreover, in many cases, e-commerce is turning out to be a self-fulfilling divination, as more and more customers are adopting the Internet for their shopping requirements, thus retailers have started performing business on the web that attracts to more customers (Ahuja, 2011; Melissa, 2010). Without a doubt, e-commerce has turned out to be a most powerful tool for the business management. However, there are different trends or elements in e-commerce for instance business-to-consumer (B2C), business-to-business (B2B) and business-to-administration (B2A). In this scenario, B2C is a latest e-commerce trend which allows the business organizations to communicate with their potential customers. In other words, it is an efficient and modern marketing platform for a lot of business organizations for the reason that it is the simply feature they need to improve in an attempt to promote their business. Thus, this innovative idea allows them to catch the attention of numerous customers to their e-commerce platform (Turban et al., 2005; Anton, 2011; Epstein, 2004). Another latest e-commerce trend is known as business-to-business (B2B), which allows the business organizations to communicate or collaborate with other business organizations (i.e. partners or associates) for establishing effective supply chain links or attracting new trading associates towards their business. In addition, it is definitely a very powerful technique of communication and working with other businesses for the reason that well-established business organizations definitely make use of a wide variety of tools and technologies for their business associates for delivering a variety of necessary resources (Turban et al., 2005; Anton, 2011; Epstein, 2004). Moreover, there is another modern trend in e-commerce that is known as business-to-administration (B2A). In fact, this trend of e-commerce allows the business organizations to collaborate with other businesses and industries through the public sector groups covering a wide variety of business operations such as tax returns, patent registration and other significant transactions and deals with the certified authority of that specific area where business organization is located or registered. Furthermore, it does not only offer the opportunity to set up profitable relationships between public sectors and the private sector to improve association but also offers a straightforward way to perform vital deals that are done between the two sectors (Turban et al., 2005; Anton, 2011; Epstein, 2004). Problems Associated with E-commerce There are numerous challenges that e-commerce would be facing in the future. In this scenario, one of the main problems that need to be tackled is regarding marketplace saturation. In fact, there can be millions of similar websites, and merely efficient marketing can decide which one is the best. There is as well the incapability of customers to determine a product in real life, or ‘try it out’. Thus, it could take towards high return fractions for businesses, and inflated expenses for consumers. Moreover, many customers are afraid of a large number of security threats, emails or other marketing posters containing different business promotions and offers. These problems can ultimately direct to major changes in the e-commerce model (Ahuja, 2011; Melissa, 2010). Moreover, the e-commerce is suffering from a wide variety of security issues and threats. Thus, there is a great deal of need for the potential transformation of online business arrangements by incorporating some efficient innovation. In addition, there are numerous problems that are currently hindering in the widely acceptance of e-commerce. Every day, we perceive a latest security threat that discourages the people from using the Internet for carrying out business transactions. In this scenario, trust is believed to be the most important factors that affect the use of e-commerce. Benbasat, Gefen, Pavlou, & Editors (2008) outlined over the past decade, there have been major progresses in recognizing the background and penalty of trust in online marketplaces and electronic commerce (Benbasat et al., 2008). According to Kim & Kim (2003) trust has conventionally been harder to describe and determine. However, the researchers have defined the trust as a “confusing potpourri”, a “theoretical misunderstanding” as well as even a “conceptual mess”. Though a number of researchers have treated hope as a unitary idea, most now consent that trust is multidimensional. Though there is less agreement on the exact scope that make up trust as well as small research on how the scope interrelates. The fundamental conclusion in the entire of these areas is trust that is turning out to be progressively significant; however we yet cannot actually say what it accurately is. For years, researchers have known for conceptual clearness however they couldn’t get much success (Kim & Kim, 2003). According to Lee, Kim, & Rao (2005) this lack of precision is as well considered in the context of web trust, however, varied and conflicting definitions of trust make it hard to contrast results all through studies. A number of e-commerce researchers have described trust like a trust in a quality of the trustee, while others have described trust like a compliance to believe the trustee. Additionally, a number of researchers could not offer a theoretical definition. However, authentication in case of web based e-commerce is an instruments that includes value in numerous ways for example it carries additional inflexibility to research as well as permits research to be performed in an additional systematic way; next it “encourages supportive research efforts. This also facilitates in scenario of research results those are more interpretable as well as apparent. Furthermore, the web based commerce authentication guarantees that research outcome are suitable or “could be trusted” (Lee et al., 2005). Effectiveness of E-commerce In the coming years, e-commerce will surely prove itself a key tool for business. In this scenario, the successful e-commerce will turn out to be an idea totally indivisible from the web, for the reason that e-shopping is turning out to be an increasingly well-known and natural tool. At the same time strict rivalry in the field of online business and e-commerce services will strengthen their development. Therefore, the future developments and innovations in e-commerce will be the expansion of Internet sales as well as evolution (Ecommerce-Land, 2004). In addition, every year the number of business deals carried out using e-commerce rises dramatically. In fact, the sales levels of online business stores are beyond as compared to those of “brick-and-mortar” ones. Additionally, the trend will carry on, for the reason that many people are “imprisoned” through household and work duties, as Internet saves a lot of time and offers the opportunity and ease to select goods at the most excellent prices. Hence, the contemporary Internet sales expansion is the basis for outstanding e-commerce future and possible innovations. However, in order to attract more customers e-store-owners will have not simply to augment the number of accessible services, but to pay more attention to similar elements like that attractive user friendliness, design, appealing goods arrangement, they will have to fortunately make use of the modern and innovative technologies for their businesses to become a part of e-commerce growth and glomming future with full of innovations. Certainly, those, who attain web based businesses or e-stores earlier, and get a greater possibility for future success (eCommerce-Land, 2004). E-commerce Examples E-Tourism In the past few years, we have seen a large number of developments in all the areas of life. These rapid developments and advancements in the field of information and communication technologies (ICTs) have provided considerable support for the establishment of an arrangement of organizations that divide with the larger suppliers and producers the tasks of product and service planning, design, suppliers’ and retailers’ communications, production, goods delivery and packaging, customer advertisement and marketing, and a number of other tasks that were in the past were disconnected, otherwise, concerted in a particular large firm. Similar to all other industries and firms the emergence of internet technologies such as e-commerce and e-business have revolutionized the service sector In this scenario, tourism and travel industry is one of the most important services sector that has been transformed by the Internet. The use of the Internet in this sector has given birth to e-tourism. In this scenario, e-tourism deals with offering tourism and travel related services and products over the internet. Additionally, modern IT based tools and technologies play a significant role in connecting the tourism chain creating a large number of advantages for all stakeholders involved in this business and, eventually, to the end user. In this scenario, the electronic commerce (e-commerce) can catalyze the tasks that are performed in the tourism sector. In addition, the e-tourism sector can modernize a number of ways of creating and maintaining the tourism business (Scavarda et al., 2001; Tremblay, 1998). E-commerce in Logistics and Operations It is an admitted fact that the Internet has turned out to be a main driver for financial growth of firms for the reason that the modernism brought by the Internet has revolutionized the ways of carrying out business activities. Without a doubt, the development of e-business and e-commerce platforms has modernized not only the ways in which products, goods, and services are bought and sold, but also how they are delivered to sales and service centers, customers, stores, and dealers. In this scenario, the logistics is the process of managing an operation that involves supplying labor and materials to be supplied. Basically, the idea of logistics is based on the procedures of tactically managing the movement, acquisition and storage of products, parts, materials and finished inventory from the companies and its marketing channel. As a result, the present and future productivity is improved all through the cost-effective accomplishment of orders. In addition, the logistics operations those are automated through the Internet offer supply chain visibility as well as being able to be part of the accessible workflow of e-commerce systems in a corporation (Turban et al., 2005; Laudon & Laudon, 1999; Nigel et al., 2010; Somuyiwa & Adewoye, 2010). E-commerce in Marketing and Advertisement As discussed above, at the present e-commerce is being used in every department and area of a business organization. For instance, e-commerce is also used to conduct marketing related tasks and activities where the Internet is used to promote business contents and data and distribute it to the customers directly. A web site is a most important e-commerce tool and marketing platform since on the Internet a customer can communicate with the business using its web site (Summers et al., 2003). Advantages of E-commerce In the above sections we have seen a wide variety of advantages and opportunities offered by the e-commerce for business organizations. This section outlines the summary of advantages provided by the e-commerce for the retailers and the consumers: (EcommerceEducation, 2012) E-commerce allows the business organizations to carry out business operations without the barriers of distance and time. Without a doubt, a person (whether he is an employee or a customer) can log on to the Internet at any time (no matter it is night or day) and start selling or purchasing anything via only a single click. The direct cost-of-sale for an order taken from a website is lower as compared to customary means (paper based, retail etc.), as there is no personal interaction throughout the electronic order processing. In addition, electronic selling virtually gets rid of processing errors, as well as it is faster and more convenient for the visitors. E-commerce is an ideal platform for niche products. Customers for the same products are normally not many however in the huge marketplace. One more significant advantage of e-commerce is that it is the easiest and inexpensive way of performing business activities. The everyday pressures of the market have played their role in reducing the chance for businesses to invest in improving their competitive place. Innovations in e-commerce In this section I will discuss some of the current innovations in e-commerce that can be adopted by the business organizations to improve the effectiveness of e-commerce: Video Solutions Video is a commonly used tool for attracting, supporting and selling commercial products or services. In fact, it can hold numerous clickable objects that, when chosen, offer more data and information or start a transaction procedure. In this scenario, the video positions a product from front and center and replaces the lengthy product details and specs of the past by means of an additional interactive shopping practice. In e-commerce arrangement the use of this tool has become more and more common for promoting and advertising solutions. An advertisement in the form of a video can be placed on the web site of the company or it can be uploaded to YouTube (a very popular social networking web site). The address of this video can be displayed on the web site of the company so that customers could visit it through the company link (Sheldon, 2009). Customer Service In present business marketing and promotional areas we can see a wide variety of innovative ideas for serving customers. Basically, the customer service is described as "offering service to clients before, during and after a transaction has been performed between the customer and the firm," and it is a process that should never be unnoticed just for the reason that the service is offered online. At the present, there are numerous innovative tools to offer customer services for instance online chat or web based forum (Sheldon, 2009). Real-World Guided Selling Real-world guided selling is a characteristic that supports clients in deciding products that most excellent option to fulfill their requirements by analyzing user’s needs and generating business recommendations to fulfill those needs. In an e-commerce environment, the feature of real world guided selling is very bright since it can help the business promote its services (Sheldon, 2009). Multi-Store Retailing Multi-store retailing is also one of the biggest innovative trends in e-commerce, which offers an excellent support for potential for business improvement. Multi-store retailing engages tailoring numerous virtual storefronts to exact brands, customers, styles, products, seasonal ranges or geographies (Sheldon, 2009). In addition, there are numerous innovations and developments in e-commerce that offer a lot benefits to both the retailers and the consumers: (Sheldon, 2009) User-Interface Design Navigation Tools Effective Merchandising Social Shopping Customer Loyalty Conclusion The present information technology trends show that the use of the Internet for carrying out business operations is always increasing. Especially, in the past few years, the use of the Internet has turned out to be very common for performing business operations and expanding their appearance to the worldwide customers in a convenient way. Thus, realizing the business organizations’ always growing interest in the Internet, many studies and researches regarding business to customers and Internet shopping have been carried out to discover the key attributes or factors that can have influence over customers’ behaviors and decisions while shopping on the Internet. Innovations and developments in information technology have always been continued since the emergence of the Internet. In fact, most of the ways companies and people carry out their daily activities and live at the present are determined with the huge web of electronic networks that is commonly known as the Internet. In addition, the term ‘e-commerce’ is commonly used for all the business operations that are carried out over the web using a wide variety of tools and software applications that depend on the Internet, such as immediate e-mail, messaging, shopping carts, and web services, UDDI, FTP and EDI, and so many others. Moreover, electronic commerce can be performed between two businesses performing transactions, trading funds, goods, services and data or between a business and a client. Now people want to shop from home by using their computer with a single click and the Internet has made it possible. Now the latest tools and technologies over the Internet have made the life easier. They have provided a lot of benefits to the customers and brought numerous opportunities for the businesses. This paper has discussed numerous dimensions of e-commerce. This paper has shown how e-commerce has played significant role in driving innovation for both the business organizations and customers. It allows the business organizations to offer their products and services for sell and at the same time it allows customers to purchase those products and perform transactions. This paper has discussed various examples of industries where the use of e-commerce has revolutionized the industry. This paper has also discussed a number of advantages offered by the e-commerce. This research concludes that the use of e-commerce is vital in order to survive and grow in this ever-increasing competitive business environment. References Ahuja, B., 2011. The Future Of E-Commerce And Online Business. 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