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Benefits of E-Commerce

Introduction

E-commerce refers to an electronic system that allows businesses, consumers, manufacturers, and suppliers to buy or sell goods and services via the Internet. Technological advancement has made it possible for firms to interact virtually with customers and gather essential information. As Kurnia, Choudrie, Md Mahbubur, and Alzougool (2015) put it, e-commerce promotes internal and external communication, which is vital in improving organizational efficiency and productivity. Globalization has led to many companies striving to establish their influence in the international market. E-commerce enables multinationals to guarantee consistency in products and services delivery across different foreign markets. This paper will discuss the various benefits that a company can accrue from investing in e-commerce.

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Advantages of E-Commerce

The advantages of investing in e-commerce overshadow the drawbacks for many businesses. Nevertheless, Kurnia et al. (2015) argue that most organizations are not familiar with the capabilities of the Internet. They use this resource for advertising and sending emails to customers only. Knowing the benefits of e-commerce is critical to its implementation. Yu, Wang, Zhong, and Huang (2016) insist that it is imperative to make sure that e-commerce corresponds to business goals. One of the benefits of e-commerce is that it allows a business to remain competitive. Yu et al. (2016) maintain that most consumers will continue to purchase products in major outlets. Nevertheless, for an organization to remain competitive, it ought to exploit other modes of consumer buying behaviors. The rise of the Internet has contributed to most customers, particularly millennials and generation X buying their products and services online. Yu et al. (2016) argue that e-commerce is expected to comprise 17.5% of the international retail turnover by 2012. It implies that organizations, which have invested in e-commerce, will have an opportunity to boost their customer share, thus remaining competitive.

One of the demerits of the brick-and-motor outlets is that they are restricted by location, making it difficult for them to reach many clients. It is hard for a business operating under such a setting to exploit the global market. E-commerce enables businesses to reach the international market, therefore increasing their returns. Targeting the global market gives a company a chance to diversify its operations. For example, “if your business is primarily service-based, you may want to complement your local offerings with products that people can purchase online, such as a hairdresser offering specialty accessories” (Savrul, Incekara, & Sener, 2014, p. 37). In other words, investment in e-commerce helps a company target the global market by identifying other business opportunities.

E-commerce allows an organization to tailor its products and services to the needs of individual clients. Savrul et al. (2014) argue that the Internet supports digital selling and marketing platforms that enable a business to gather information from customers. The data collected from clients is helpful in understanding their tastes and preferences, thus enabling a company to improve its products and services to suit consumer needs. E-commerce enables an organization to monitor consumer buying behavior. In return, a company is able to formulate effective promotional and target marketing strategies.

Reduction of Production Cycle

In the past, procurement, design engineering, and production departments communicated via paper-based approaches. This mode of communication was ineffective and contributed to an increased period of the production cycle. The introduction of e-commerce has enhanced communication among these departments, therefore enhancing efficiency. One of the companies that use e-commerce to enhance the duration of the production cycle is Toyota. The company’s engineering department, procurement division, and assembling unit are situated in different locations across the globe. E-commerce helps Toyota to connect the different divisions to expedite production processes (Stanowska, 2018).

The design engineering division sends blueprint sketches and specifications to the purchasing unit via the Internet. The move hastens to buy of the necessary materials that are shipped to the assembling plants, thus guaranteeing prompt commencement of the production processes. Another company that uses e-commerce to enhance production cycle time is Apple Inc. The company sources components from the United States, China, Europe, and Asia (Marinagi, Trivellas, & Sakas, 2014). All the materials are delivered to China where they are assembled to get the final product. Apple uses the Internet to promote communication between plants located in different countries. The production units are also connected to the assembling unit. Communication between the assembling unit and the various plants makes sure that components reach the former on time (Marinagi et al., 2014). It helps to improve the production cycle time and to ensure the timely release of products into the market.

Conclusion

Businesses benefit immensely from investing in e-commerce. The technology enables an organization to boost its competitiveness by identifying and exploiting diverse business opportunities. A company gets a chance to grow its customer base by targeting clients who purchase products online. E-commerce helps businesses target both local and global markets. Additionally, it enables firms to tailor their products and services to the needs of individual clients. The technology is helpful in the formulation of promotional and target marketing strategies. Manufacturing firms use e-commerce to improve the production cycle. They utilize the Internet to expedite communication between different units that are involved in production processes. It helps to ensure that the production divisions receive requisite information and resources on time, therefore speeding up their processes.

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Reference List

Kurnia, S., Choudrie, J., Md Mahbubur, R., & Alzougool, B. (2015). E-commerce technology adoption: A Malaysian grocery SME retail sector study. Journal of Business Research, 68(9), 1906-1918.

Marinagi, C., Trivellas, P., & Sakas, D. P. (2014). The impact of information technology on the development of supply chain competitive advantage. Procedia – Social and Behavioral Sciences, 147(1), 586-591.

Savrul, M., Incekara, A., & Sener, S. (2014). The potential of e-commerce for SMEs in a globalizing business environment. Procedia – Social and Behavioral Sciences, 150(1), 35-45.

Stanowska, N. (2018). An investigation into the development of Toyota’s e-commerce customer journey. Journal of Undergraduate Research at NTU, 1(1), 146-181.

Yu, Y., Wang, X., Zhong, R. Y., & Huang, G. Q. (2016). E-commerce logistics in supply chain management: Practice perspective. Procedia CIRP, 52(1), 179-185.

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