Benefits
The benefits that e-commerce will give to the company are stated below:
- Individual access to customers (this procedure entails the use of COOKIES, this is a profile on the individual that visits a website, this allows the company to work around the needs and requirements of the consumers.
- Shortening of the supply chain.
- Possibility of global access to the website.
- The location of the business will become unimportant to the customer.
- Reduction in costs, due to removal of the need for premises.
- E-commerce breaks down the barriers of market entry.
- Maintains a competitive edge.
- There is also a possibility of low promotion cost to the company, so there is less expenditure.
Barriers To Overcome
There are many potential obstacles, which can affect the development of e-commerce within a business. In most cases, these obstacles can be overcome. E-commerce also has many barriers that the company will have to overcome if their website is to be a success. They are as follows:
- Lack of commitment to the project.
- Need for technical skills to maintain and to keep the site up to date.
- Organisational culture might discourage this change.
- The organisation may have very few employees with the appropriate skills.
- There is no clear promotional or marketing strategy.
- The cost of carrying out this operation is very high demand for their products. This can be caused by e-commerce.
- Lack of trust, in the Internet being a safe and secure way for conducting business.
- The effect on the company image, if the site is not constantly updated.
Methods Of Overcoming These Barriers
For some businesses, barriers to E-commerce may appear to be impossible to overcome, for example when products cannot be sold electronically, the company cannot deal with such high demand or response rates.
Many of these barriers can be overcome by carrying out the following procedures:
- Using government support
- Recruiting new staff
- Customer education and awareness campaigns
- A good business plan
- Training and development of staff
- Commercial websites that offer help and support, for example Price Waterhouse Coopers, IBM
- Help from organisations such as AEV (Alliance for electronic business)
These methods will help any organisation to overcome any barriers that they will have to overcome, in order for their E-commerce strategy to be a success.
Potential For E-commerce
E-commerce has a much more greater scope than the popular image it gives about dot com businesses. The growth of E-commerce has been very rapid over the past years. It is also predicted that this growth is expected to continue for the foreseeable future, especially as people can access the Internet nowadays through many different channels such as the following:
- WAP phones,
- Computers,
- Internet TV
- Digital TV
Business organisations have different levels of involvement and potential in e-commerce, for example, some do not trade on the Internet but may use it as:
- Another advertising tool,
- A brochure to provide product details for customers,
- E-mail newsletters
- A way in which the company can gain market research on their customers.
Some business trade only on the Internet, an example of this type of company is WWW.LETSBUYIT.COM. Others will just use it as one of many sales channels, an example of a company this type is a supermarket, travel agents etc. A businesses involvement in E-commerce may be progressive, for example a business may start using the web, to advertise their products, then slowly move towards providing a service, which allows customers to buy their products online.
Business buying online is known as e-procurement and forms part of supply chain management. The supply chain management includes:
- Procurement
- Inventory management
- Forecasting
- Warehousing
- Logistics/distribution
Most businesses that are not successful in their E-commerce strategy fail because of poor distribution systems or stock levels that cannot cope with demand. Both of these factors may be the result of the company not forecasting properly.