FREE online courses on ECOMMERCE FUNDAMENTALS - What is E commerce - Incentives of E-commerce

Firms engage in E-commerce to:

 

·         Meet the challenges of an increasingly global business environment.

 

·         Apply information and communication technologies (ICT) to an enormous range of pro­duction and distribution processes on a global scale.

 

·         Support fully automated transactions.

 

·         Minimize the economic impacts of time and distance.

 

·         Reduce transaction costs by doing away with intermediaries.

 

·         Support advanced design and manufacturing concepts like Just-in-Time, Quick Response and Concurrent Engineering - all oriented to co-ordination and integration of the production and distribution processes.

 

Create new business areas

 

This is very essential for information and knowledge-based ‘intangible' products. Links set up initially on an inter-firm basis (as between manufacturers and financial institutions), soon develop interfaces with a variety of uses and users. The links established in one sector (like shipping and forwarding) can migrate to other sectors (like retailing and manufacturing).

 

Manage transactions better

 

At the most basic level, the need is to respond to the escalating quantity and complexity of commercial transactions. In the travel sector, for example, major carriers are migrating to electronic ticketing systems. In Europe, electronic linkages are being planned between rail and airline reservation systems.

 

Cope with increase in data

 

Coping with the increase in transaction-associated data is especially critical where complex, interactive logistical arrangements must be maintained. In paper form, for example, the documentation for many kinds of complex technological systems can run into millions of printed pages. Distributing this information electronically not only facilitates more efficient storage and retrieval, but also helps to ensure that operators of these systems always access the most up-to-date manuals.

 

Introduce marketing concepts

 

New kinds of on-demand marketing concepts are applied throughout a wide range of products. Levi-Strauss now uses electronic links with retailers to supply made -to-measure clothing. Several automotive manufacturers virtually assemble cars to order according to specifications worked out between the customer and the dealer.

 

Use customer databases creatively

 

These customer information databases must be used creatively. Retail traders, use electronically gathered information on consumer buying patterns - often involving the use of ‘affinity' or ‘loyalty' cards - to assist them in targeting products efficiently to specific kinds of customers.