E-Commerce Essay, Research Paper
With the rapidly advancing technologies that are occurring in modern business, organizations are required to be ready, and able to adapt within their ever-changing environment. It is true across all diverse industries that in order to stay competitive, organizations must be able to utilize the various tools that technology has to offer. Technological factors have been of growing importance, particularly in recent years. A major factor involved in these technology issues is the use of the Internet as a major issue to modern organizations. The Internet has been rapidly growing since it’s inception and is now commonly used in all sectors of societies, in all corners of the globe. The Internet has quickly become one of the most valuable assets in modern technology, and as such, is developing as an integral part of modern commerce. As with past technologies, the internet will have future technological advances develop from its own growth. The Internet has lead to the birth and evolution of electronic commerce or E-commerce. E-commerce has now become a key component of many organizations in the daily running of their business. Simply defined, electronic commerce is a system of online shopping and information retrieval accessed through networks of personal computers. E-commerce challenges traditional organizational practices, and opens ups a vast array of issues that the organizations must address. By focusing on the varying levels of an organization, it soon became apparent the effects that E-commerce can have. An understanding of the implication E-commerce has on such organizational divisions can help businesses gain understanding and plan for it’s inevitable continuing evolution. As the Internet, and in turn E-commerce has developed, and continues to evolve and grow, it is vital that any organization, in any particular industry, must base it’s strategic planning around such a rapidly growing medium. The growth of the Internet is an environmental influence that must be embraced and understood so to successfully plan for future marketing implementation. The next crucial element is to gain an understanding of E-commerce itself, as well as the current and possible future developments. In understanding E-commerce’s impact on strategic foundations, an organization s strategies can be more clearly focused. Once the organization and E-commerce’s respective environments are clear it is then possible to understand E-commerce’s implications in regards to fundamental purchasing strategies. By focusing on tools such as the competitive strategy framework we can gain a better understanding of strategy formulation. By reviewing traditional purchasing theories and practices, it’s possible to see where, if at all E-commerce fit into current frameworks. This will provide relevant conclusions that can be made based on the strategic implications of E-commerce, and it’s attributes in the purchasing process. In doing so, this adds a vital dimension to the purchaser in an ever-growing technology based society, of which must be clearly understood. In order to gain an understanding of E-commerce’s impact to the modern organization it is imperative that the environmental issues are analyzed and understood. The understanding of the environment in which an organization is involved is a fundamental element of its strategic plan. In order to be successful in any industry the organization must have a sound understanding of influences that effect its product or service offer. When conducting an environmental analysis in regards to the Internet, it may seem that many of its attributes are present in traditional consumer markets. However, E-commerce provides organizations with a unique medium to analyze, requiring information relating specifically to it’s environment. E-commerce ideals place particular emphasis on environmental factors, due to the high rate of change and development it constantly undergoes. An understanding of both environmental influence on the Internet and E-commerce, and that of a particular organization is imperative basing any strategic formulation. Technology is ever changing, and as such E-commerce is absolutely influenced by its evolution. In terms of strategic formulation, technology is a huge issue that any organization must be aware of when realizing E-commerce’ s strategic implications. World economies another key environmental influence is an awareness and understanding of global activity such as world economies. As the Internet provides a basis for global communication, the awareness of world economies must be understood in regards to E-commerce. The linking of the Internet worldwide, in turn effects the way in which E-commerce behaves, and therefore makes an understanding of world economies imperative. As with the need to understand world economies, global integration of E-commerce highlights fundamental environment issues such as legal and political influences. As independent countries operate different legal and politic systems, it is obvious that an understanding of such ideals is also important in addressing E-commerce. Failing to recognize possible repercussions of E-commerce use, in a political or legal manner could prove catastrophic for an organization. It is imperative it is carefully looked at, particularly in regards to E-commerce. The growth of E-commerce has transformed the way in which consumers purchase products as well as how organizations operate. The Internet provides the necessary tools; easy operation and exchange of information; and therefore effects all diverse industries and organizations. The Internet has become a useful tool for selling, buying and distributing goods and services globally in a rapidly growing supply chain. The potential market that the Internet provides has little or no restrictions by either geography or time, and therefore poses a huge impact on any organization considering E-commerce in it’s strategic purchasing formulation. Opportunities in E-commerce are enormous, as present growth and development have proved. The Internet provides a virtual marketplace, providing huge opportunities in the purchasing strategies that an organization my wish to develop. The trends of Internet users and in fact the use of E-commerce in general is extremely valuable information that the organization must be aware of. By knowing how the advances of the Internet are being used, a marketing strategy can be focused keeping these ideals in mind. As E-commerce provides different uses to varying companies or industries, user trends and their relative importance differ. For example Business-to-business electronic communication would represent different characteristic than communication relating directly to the end-consumer. Ideals such as customer tracking can be found as an integral advantage in the use of Internet based purchasing. Information regarding “users” use of resources can be tracked reasonably easily on the Internet, and is a direct result of the information-based platform the Internet provides. For example Amazon.com provides e-mail announcements when a new product or service become available to its customers. Such understanding and manipulation of user information is beneficial to both consumer and suppliers. In keeping in mind the limitations of various consumer analysis information, it should be understood that there is still a place for its use in strategic formulation and planning. Having an awareness of the varying user trends aids in strategy formulation in a number of ways. By understanding how the users of information tools such as the Web act, for example, it is possible to forecast or predict future behavior and base strategies accordingly. Therefore user trends are an integral environmental issues that must be identified, in order to achieve successful purchasing success. Consumer analysis is possibly the major factor in understanding the effects of E-commerce towards purchasing within an organization is the awareness of who in fact has access to such resources. By having an understanding of users of the Internet and E-commerce resources, the purchasing strategy can be further advanced, and tailored in a favorable direction to the organization. Various factors make-up the analysis of the consumer when addressing both E-commerce and the more tradition means of commerce. Ideals such as demographics and cultural influences must be identified when assessing the characteristic of any market. It is important that the users of Internet technology are identified, and the relevant consumer attributes understood. In terms of E-commerce, this aspect of the environment provides a basis for how an organization would structure their purchasing strategies based on the attributes that make up the general Internet consumer. It is imperative that awareness of the consumer does not limit organizations to just the end-consumer. Business-to-business relationships must also be taken into account when planning strategy based around the E-commerce framework. By being aware of how industries and organizations utilize tools such as the Internet, a purchasing strategy can be further guided in the right direction. Having provided a situation analysis and environmental analysis, an organization must use the information, in order to implement its strategic plan. In implementing a strategic plan is it appropriate to identify the four key elements in an organization s environment. They are the internal strengths and weaknesses, and the external opportunities and threats. By matching the organizations resources, and any apparent opportunities it may be possible to conclude an effective match, and hence, a favorable outcome. These four major environmental factors are important for the organization, and are vital in assessing its strategy in an E-commerce situation. E-commerce provides strategic advantages and disadvantages that have been widely discussed and challenge. As opportunities and threats can often be rather blurred, these E-commerce or Internet advantages or disadvantage pose some interesting question. In having a comprehensive analysis of the environment in which the organization is face with when dealing with E-commerce, the task is now rather simple. The organization must identify how to use the Internet towards a useful business advantage. There are huge amount of interesting approaches to achieving such an ideal, and the basic ideals varying across different industries and organizations. While it is obvious that dynamic organizations possess varying attributes, there are some general advantages and disadvantages that E-commerce offers across all different industries. As E-commerce advances at a rapid rate, it is clear that no industry will be exempt from its impact. Therefore key issues in its possible uses must be address across all diverse industries. Virtual stores are another significant ideal in which strategic planning can base significant interest in, when addressing E-commerce. Virtual stores can provide an inexpensive form of direct sales or help to supplement existing sales channels. By using the Internet, manufacturers are possible to reach the end-consumer without going through intermediaries. When aligning a strategic plan based around the development of a virtual store, there are some key issues that must be addressed. As with any strategic development, there are usually threats, and virtual stores pose considerable threats due to intense competition. In a marketplace such as the Internet, other company can apply huge pressure, perhaps due to a sustainable competitive advantage. Electronic Cost-cutting by replacing existing print and publishing cost, organization can use E-commerce for their electronic publishing. Distribution on the Web, as opposed to mail, for example can have a huge impact on cost, and may be a strategic driver. The initial strategy might be for lowered cost of the product offer, and hence lowering cost in documentation distribution may help in the financial control of such a strategy. An understanding of the critical make up of organizations, and how they develop their strategies, helps to close the gap between E-commerce and strategic purchasing. An organizations strategic planning process helps to cover the vital issues that any new paradigm may invoke. This structure helps provide a basis for assessing the impact of E-commerce and its relationship with purchasing strategy. By understanding the organization as a whole, it becomes clear what initiates strategic development, and hence provides clear reasons why E-commerce may become prevalent in strategy formulation. Such an understand allows the organization to develop E-commerce strategy that is in sync with the organizations corporate strategies. Such fundamental comparisons help to gauge the effect E-commerce has and will have on modern organizations. If organizations gain an understanding of E-commerce and its relationship to marketing and operational strategies, they will be better ready for future development and technological change. In order to be competitive in modern business it is imperative that the organization s corporate strategies are constantly review, and environmental influences addressed. As organizations implement their strategic plans in respect to E-Commerce, it must be realized how this will effect other part of the organizations. It is also important to understand how society is impacted as a result of their strategic plan. E-commerce is changing the shape of competition, the speed of action and the nature of leadership, therefore, it is important for purchasers to implement a very useful strategic plan.