E-Commerce: A Global Oppurtuni Essay, Research Paper
E-COMMERCE: A GLOBAL OPPORTUNITY
In a world brimming with the pressures of economic stabilization and financial gratification, companies must adopt the methodologies of e-commerce in order to attract growth and prosperity.
E-commerce, defined as The application of advanced information technology to increase the effectiveness of the business relationships between trading partners by the Automotive Industry Action Group of North America, is a realistic tool which enables companies to evolve electronically into a corporation better suited to serve their customers.
E-commerce involves implementing regular business operations into a telecommunications network. The most common form of conducting business online is through web pages. Companies create these web pages (usually with the help of such design companies as NetDynamics) which allow customers to order goods and services from the convenience of their own home. Most new sites also allow secure financial transactions to be made. E-commerce is also used in the form of EDI or Electronic Data Interchange. This form of online business acts as a messaging system which automates and speeds the exchange of information between two linked companies. This format is usually found in the user-supplier community and automatically informs the other party of needed supplies, arrival dates and payment information.
The use of e-commerce technology presents many opportunities to companies, regardless of size, to expand and profit in the global marketplace.
Large corporations such as Intel Corp. and Dell Computers have successfully used e-commerce to propel growth. For example, Intel reports that it sells over $1 billion worth of products monthly over its website. This outstanding figure accounts for 40% of Intel s total sales. As well, Dell claims to sell $14 million in products each day over its e-commerce setup.
Another large corporation, Boeing, used the Internet and other telecommunications medians to establish an international network for designing its flagship, the 777. Japanese engineers, who were working on portions of the fuselage and wings, were linked to foreign team members across the Pacific. The entire process, which was completely computer based, linked thousands of part suppliers around the world through advanced Internet software. This software networked all parties together and allowed the automatic control and observation of inventory, financing and scheduling. This use of e-commerce allowed a totally connected and efficient environment to exist over an imposing ocean.
Furthermore through e-commerce, auctioning giant eBay, which started out with a monthly revenue of $1,000, has experienced an explosion of growth after its shares took off from $18 to $47. This e-commerce success is also reflected by the popularity of retail giant Amazon.com, which ranks among the world s most visited sites. This site allows consumers to choose a book they like, enter their credit card number and receive it a few days later. The popularity of both Amazon.com and eBay stretches past North American markets and represent household names all over the world.
Even though the success of large corporations attains to the global opportunities presented by e-commerce, small businesses also reflect this fact. Take into account the scenario of British model solider manufacturer Len Taylor and his company Trophy Miniatures. Taylor experienced many sleepless nights during which he would answer phone calls from US customers (when it was evening over there). However after Taylor decided to embrace e-commerce, his business took off.
With his own Internet site, customers from all over the world were able to book orders. He saw his sales rise from 17 000 to 30 000 (British currency). Taylor, who now has his full model line on the Internet, says The website brings in so much business from abroad…[and] our order books are filled to capacity.
On a local spectrum, the success of Halifax, Nova Scotia based Pantellic Software can further attain to the global potential of e-commerce. Through its extensive product line (sold through www.pantellicsoftware.com) and introduction of the world s first photo-sharing site, Photo-Point.com, founder Dale Cass has seen a $4,100,000 revenue figure for the year 2000 attached to a growth percentile of 621%! His company s innovative e-commerce configuration has exposed them to international markets, which, in turn, has brought them very healthy returns.
Even though e-commerce has proven to effectively expose a company s products to the global arena, it also has the potential to provide services to consumers. For example, Southern California Gas Co., which distributes gas to suppliers who then resell it to corporate and residential customers, has been operating a web site that allows corporate consumers to choose their energy supplier. The utility giant is also planning to allow residential customers to choose their own electricity provider online. Eric Baty, a project manager with the company, says We did it to provide a valuable service to our customers…[and] creating a competitive marketplace drives down prices. With this setup the company is planning to partner with suppliers in order to make money off transactions.
However, to find a globally active e-commerce service site we need only look to Schenker-BLT, Europe s largest transportation and logistics company. Schenker-BLT, which launched its e-commerce site in 1999, has greatly improved its sales and ordering system while, at the same time, saving money. The site allows customers to book orders, track the transportation progress and establish payment- all online. For further security, Schenker-BLT requires customers to confirm their order by phone. The site gives the company the opportunity to, as Johan Lisnell, product manager of information technology of the company s marketing unit says, open up a window to customers and have them do work we normally did. The international exposure of the company s website attracts a much broader market than normal advertising would allow.
E-commerce clearly represents a global growth tool for the world of business. Its advantages shorten operating cycles through the use of online catalogues, order and payment, cut manufacturing and stock costs though competitive bidding, connects companies to worldwide markets at a fraction of traditional costs and ensures that product and marketing as well as prices are up-to-date. However, the growth of the e-commerce industry, which the World Trade Organization (WTO) projects will generate $4 trillion in sales in the year 2004, also serves to improve the quality of life for consumers.
E-commerce promises to increase competition between business which will result in better prices on almost all goods and services for consumers. As well it promises to supply consumers with more convenient lifestyle options such as home shopping, home banking, entertainment and job searches. In addition to these advantages, e-commerce is able to ameliorate state of the health care sector by enabling patients to book appointments, order prescriptions and research symptoms on the next wave of sites similar to today s WEBMD and Dr. Koop s. E-commerce also facilitates better communication and information exchange between hospitals (this is especially helpful to the US health care system). Nevertheless, these advantages give more promise to those individuals in rural areas who, under normal conditions, would not be able to obtain the same quality of care available in urban centres.
This e-commerce opportunity for rural areas also extends to include education, where the use distance learning is growing rapidly, leisure services (e.g. facilities booking) and transportation (e.g. buying tickets).
However, the global opportunities that e-commerce provides doesn t stop there. E-commerce has the ability to create jobs, benefit global economic growth and improve technology.
With the evolution of e-commerce come countless opportunities for job placement- ranging from delivering packaged goods to maintaining e-commerce sites. These career prospects will also demand a higher standard of education and as, Cisco Systems has demonstrated through its Cisco Certification Programs, mobilizes a generation equipped with a wide array of technical skills.
The increased use of e-commerce also triggers an improvement in technology in particular those relating to security and speed. As businesses grow they as well as their customers will demand a higher level of security and speed, thus prompting technology developers to create more sophisticated equipment to meet these demands.
The augmentation of e-commerce, with its capacity to create jobs and improve technology, is able to bring forth-strong economic growth of global markets. With a higher concentration of e-commerce users, countries will experience higher levels of foreign trade. As a result of these increased trade levels, economic growth will flourish. This growth will also cause increased competition and promote economic diversity.
The global opportunities of e-commerce are truly momentous. E-commerce has the ability to destroy the barriers posed by a global landscape and create a harmonized electronic community. It has the potential to create jobs, provide a better quality of life for people in both urban and rural areas, strengthen international relationships, improve technology, increase market competitiveness and generate economic growth and prosperity. E-commerce is an advanced business tool which is carrying us to tomorrow’s reality.