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How has the growing use of the internet by busi...

How has the growing use of the internet by businesses and consumers changed the competitive busin...

How has the growing use of the internet by businesses and consumers changed the competitive business scenario? Can you identify the characteristics of the E-commerce environment that are changing the competitive scene?

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Kanishka Apr. 17, 2018

If you have an option to select between a smartphone or non-smart phone, which one would you buy? 

If you follow the market trend, then you would buy smart-phone because it has internet. 

Yes, that's right, the internet has deeply penetrated into the world, and is continuously fueling the already rapidly emerging e-commerce. 

The Internet can provide information about anything to anyone at a click of a button.

The Internet has empowered everyone: 

- Businesses can display their product or services to anyone, sitting in any corner of the world.

- Consumers can compare and select products provided by different vendors, sitting at home.

In fact, the growing use of the Internet by businesses and consumers has reshaped the economic landscape and altered traditional industry boundaries too.


Here are the various characteristics of an E-commerce environment that has been changing the competitive scenario: 


(a) Improved and globalized competition:

Now, any company can compete in global markets. Through the internet, even a local company can now show its strength to a worldwide company.

This is true especially for companies with good products which can ship economically.


(b) Low entry barriers:

It is so easy to do business on the internet.

You don't need a brick and mortar shop to sell your product. Rather you don't even need to have an inventory before selling.

Relatively low entry barriers are the reason that hundreds of thousands of e-commerce firms are newly formed, with perhaps millions more to spring up around the world in years to come. 


(c) Access to better resources, suppliers, raw materials

High profile or low profile, millions of the businessman have an internet presence. Either they maintain their websites or use some other person's site to disclose their products, services, strengths, and advantages. 

It has increased the possibility for business organizations to locate the best suppliers across the world. They can collaborate electronically with chosen suppliers and possibly save costs, gain the cost advantage, or improve efficiency. 


(d) More choices than before in the hands of consumers:

Say, you want to buy a mobile phone. 

Earlier, you used to visit different shops, locate different telephones, compare them and then buy. 

But now, you have to only log in to the internet, go to an e-commerce site, use its search option and voila you see a range of mobile phones. 

You can view, compare and select from rival vendors with least resistance. 


(e) Easy, faster flow of new technology and new idea across the world. 

Information flows like electric on the internet. Ideas originating in Canada can flow to China in nanoseconds through the internet. It is a significant opportunity for the organizations in the third world or emerging countries. They can use the internet to monitor the latest technological developments and to stay abreast of what is transpiring in the developed markets. 


 (f) The opening up of opportunities for reconfiguration of industry and company value chains. 

Manufacturers can instantly link up the orders of customers with the suppliers of components through the internet. It enables just-in-time delivery to manufacturers, slices inventory costs and allows production to match demand. 


(g) The Internet can be an economical means of delivering customer service. 

Organisations are discovering ways to assist in a centralized manner – online or through the telephone. Thus curtailing the need to keep company personnel at different locations or the facilities of significant customers. 


(h) Uncertain, unpredictable and unexpected growth.

Internet and PC technologies are advancing rapidly, often in uncertain and unexpected directions. Such growth often brings in new opportunities and challenges. 


(i) The e-commerce environment demands that companies move swiftly. 

In the exploding e-commerce world, speed is a condition of survival. New developments occur on one front and then on another occur regularly.


(j) Easy availability of capital.

In the Internet age, e-commerce businesses have found it relatively easy to raise money. 

Venture capitalists are quite willing to fund start-up enterprises provided they have a promising technology or idea, an attractive business model, and a well-thought-out strategic plan. 


(k) The needed e-commerce resource in short supply is human talent in the form of both technical expertise and managerial know-how. 

While some e-commerce companies have their competitive advantage lodged in patented technology or unique physical assets or brand-name awareness, many are pursuing competitive power based on the expertise and intellectual capital of their personnel and their organizational competencies and capabilities.

All said Internet and e-commerce together have a substantial and widespread impact. The advent of the Internet and online networks is changing everything.

How has the growing use of the internet by businesses and consumers changed the competitive business scenario? Can you identify the characteristics of the E-commerce environment that are changing the competitive scene?

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