• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

E-Commerce: The Positive Effects of this New Business Channel

Extracts from this document...


E-Commerce: The Positive Effects of this New Business Channel Various organisations and people have given different definitions to ecommerce. OKI Technical Review (2000) has defined e-commerce as "the technology, processing, and operations, which occur when business transactions are done automatically over networks, using IT." (www.oki.com, 2000). At the same time, the World Trade Organisation (1999) defined e-commerce as "the production, distribution, marketing, sale or delivery of goods and services by electronic means" (www.asfolaw.com, 2002). E-commerce has been characterised as one of the biggest revolutions regarding the electronic business, which at the same time expresses not just the enthusiasm but also the spotlight for a fast growing market. According to a survey undertaken by the US Ministry of International Trade and Industry (1999 and 2003), the scale of the market concerning e-commerce in the USA and Japan has risen from 1998 to 2003, with the transactions between businesses and consumers reaching 650 million Yen in Japan and 22500 million Yen in the USA for 1998 while this figure increase to the amount of 31600 (Japan) and 213200 Yen (USA) for year 2003 (www.oki.com, 2003). It is evident that there has been a radical change of the buying behaviour of people, who mainly use e-commerce for travel, automobiles, buying PC's and for the provision of services in general (www.oki.com, 2003). One can, therefore, argue that e-commerce has proven to have a great impact upon the buying behaviour process of people by formulating trends in certain market areas, as in the case of travel which has risen 110% from 1998 to 2003 (www.oki.com, 2003). ...read more.


For instance, while CD's at traditional retail stores, such as Virgin Megastores, cost approximately 20 euros at certain websites cost around 10 euros (www.cdnow.com, 2003). Thus economic returns are higher as costs are low (www.servicemachine.org, 2003, p. 4). This is due to the fact that several common costs, like store rent cost, administration and employee costs are reduced significantly through e-commerce. E-commerce is also considered having a positive contribution to society's welfare as a whole. The introduction of new products in direct correlation with the growing demand for certain goods and services create new markets. The latter leads to the increase of employment and livelihood opportunities (www.info21.com, p. 2), since new market will result in additional income (Muecke, Tom, p. 2). The Philippine APEC Study Center Network (2003) predicts that during the period from 2000 to 2005, the change in the inter-industry relationships, as a consequence of e-commerce, will generate 5,900 additional jobs. At the same time there will be a rise of 29% in terms of employment for the whole national economy (Philippine APEC Study Center, p.1). Moreover, technological innovations enable companies based on developing countries to make business with low costs and high profits (www.info21.com, p. 2). Without the contribution of the Internet, this would seem impossible to do so. E-Commerce can have positive effects for all economies contributing to the mutually supportive goals of sustainable economic growth, enhancing the public welfare, and fostering social cohesion. ...read more.


1). In conclusion, it is evident that despite the pitfalls of e-commerce, this technological revolution has numerous positive contributions various parties. Consumers, on one hand, benefit from the easier access to products and services available on the Internet. There is a new horizon regarding the purchase of goods. At the same time the choice for goods has been expanded, as numerous businesses offer a great variety of products. On the other hand, companies benefit from the positive contribution of e-commerce as well. First, companies are now available to expand their businesses worldwide. Therefore, they aim at a larger target group as they go global. Furthermore, they have higher economic returns, in other words greater profits, since their daily operational and transaction costs are minimised. In parallel, society is positively affected by e-commerce. The introduction of new products and services not only increase the level of employment but also the income for the countries. In the near future e-commerce is expected to grow further regarding online transactions. In particular, Reibstein and Fader admit that online customisation of the products or services offered are going to be improved (Merrill Lynch Report, p. 5). Therefore, the percentage of online consumers is going to increase. On the other hand, Merrill Lynch experts say that: companies give up on the idea of customisation and use e-commerce as just another way to do direct marketing - a website as a catalog on steroids. For the next few years, I think, that's the only way companies should view it. They should focus on streamlining the shopping experience without over - customizing the actual products or services being sold (p.5). ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level ICT in Business section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level ICT in Business essays

  1. Marked by a teacher

    business online

    4 star(s)

    Since the mid-90s, Tesco has been investing in new markets overseas, seeking out new opportunities for growth and ways of generating long term returns for its shareholders. Today the Tesco group operates in 12 markets outside the UK, in Europe and Asia.

  2. Marked by a teacher

    Unit 4 Business Studies

    4 star(s)

    just some of it, and also it doesn't hurt the viewer's eyes when they keep looking at pages. Cars Direct are doing everything they can to make the customer purchasing life easier, but they could use pay pal for their transaction which saves time for the user and the business to make transactions.

  1. For my business report I am investigating the Co-op erative society supermarket.

    The Co-op supermarket mainly buys its goods from small farming groups who posses a stake and a share in the business. Co-op retails functional areas each have objectives which tie in with the cooperate objectives; these are goals which the business as a whole is striving to achieve in order to survive in the market.

  2. The process of electroplating and how it is used to protect products.

    how it is used in the coating of metallic products or materials Strengths The strengths of this objective were that I was able to locate most of this research form the Internet and secondary information, but I also obtained a large majority from primary sources, an interview.

  1. Advantages and Disadvantages of e-commerce in terms of easyjet

    And since the first ticket was sold they have kept to their roots and as statistics stand now, 95% of sales come wholly from the internet with just 5% coming from call centres. This cuts out the middle man essentially and prevents the need for easyjet to open stores all around the UK to sell their tickets.

  2. Business report on Marks and Spencer.

    This presents problems for organisation tendering for orders from new customers. The international standard ISO 9000 certificate indicates to potential customers that the quality procedures of the certificate holders are reliable and, by implication, they are capable of delivering consistently the promised quality product and service.

  1. E-commerce in Business Companies of Bangladesh.

    While this was happening on the technology side, one also witnessed corporations grappling with new issues - that of escalating global competition, shrinking margins demanding customers and a rapidly changing business environment. All these were forcing companies to re-evaluate the way they did business, the types of products and services

  2. In this coursework I need to produce a detailed business report on one medium-sized ...

    Tesco's main business objectives: * to provide customers with outstanding, naturally delivered, personal service * to earn the respect of its stuff for the values and appreciate their contribution * to understand customers better than anyone * to be competitive even on the basics * give customers a broad range

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work