Buss 4 E- commerce

Buss 4 E- commerce

1. 1. The impact of e-commerce on the competitive environment within industries

   • Positive Impacts
     • Removes barriers to entry, as it is relatively easy to set up
     • Reduces overheads as web-based companies do not need to have a High Street presence
     • Enables access to a wider target market
     • Trading and selling can take place 24/7 and orders can be placed from all over the world
   • Negative Impacts
     • Reduces sales and profits of traditional retailers
     • Increases redundancies as technology replaces staff
     • Potential threat of cyber attacks
     • Reduces customer interaction and need for expert advice and knowledge of trained staff

2. 2. The impact of e-commerce on businesses and their functional areas

   • Finance
     • Allows firms to sell their products outside normal trading hours
     • Relatively cheap and easy to set up - but will require constant updating
   • Marketing
     • Gives even small companies a potential global reach
     • Allows firms to advertise and promote on a digital platform that is considerably cheap
     • Has led to internet only brands being able to access markets that were previously blocked
   • Operations
     • Helps the lower overheads and makes stock control easier
     • Enables the purchase of warehouses in cheaper out of town locations with excellent transport links
     • Places greater pressure on the delivery aspect of the business
   • People
     • Has been an opportunity for people with technical ability
     • Continues to threaten traditional retail operations and has led to store closures

3. 3. The impact of e-commerce on different stakeholder groups

   • Customers
     • Access to wider ranges of products and services, which means more choice and lower prices
   • Suppliers
     • Easier to source potential suppliers and compare prices and services
   • Managers
     • Need to be able to organise and co-ordinate a new functional area of which they might have limited experience
   • Emplyees
     • Opportunities for employment for web developers and technologucak experts but potential threat to employees of traditional businesses
   • Shareholders
     • As always will be keen on receiving a return on their investment and e-commerce has proven very profitable for certain businesses

4. 4. The extent to which e-commerce creates opportunities and poses threats for businesses

   • Opportunities
     • Massive potential audience that can be reached 24/7
     • Market development- can take an already successful e-commerce model and roll it out across the globe
     • Creating new markets and ways of meeting customer needs
     • Providing time- saving solutions for customers and leads to efficiency saving for firms
   • Threats
     • Initial start up costs a consideration plus the constant need to keep up with technological developments
     • Increased competiton
     • Can lead to job losses as more and more services become automated
     • Potential for cyber attacks and a loss of reputation for parcitular firms

5. 5. The factors influencing if, why and how businesses respond to the growth of e- commerce

   • Factors
     • Nature of the industry
     • Financial resources of individual businesses
     • Reaction of competitors
     • Market conditions
     • Barriers to entry

6. 6. The impact of e-commerce on business performance and on strategy, both nationally and internationally

   • Factors
     • Ansoff Matrix
     • Porters five forces model and generic strategies
     • Internal resources
     • Competition
     • Pestel