Few innovations in human history encompass as many potential benefits as EC does. The global nature of the technology, low cost, opportunity to reach hundreds of millions of people (projected within 10 years), interactive nature, variety of possibilities, and resourcefulness and rapid growth of the supporting infrastructures (especially the Web) result in many potential benefits to organizations, individuals, and society. These benefits are just starting to materialize, but they will increase significantly as EC expands.

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The Benefits of EC

• The new markets could be accessed through the online and extending the service offerings to customers globally.

• Internet shrinks the globe and broadens current geographical parameters to operate globally

• Marketing and promotional campaigns can be done globally at the reduced cost.

• Retaining the customer and the customer services could be improved drastically.

• Strengthen relationships with customers and suppliers ?

• Streamline business processes and administrative functions

• No added sales staff

• A catalogue which is quickly and easily updateable. This means that when prices or stocks are changed, you don’t have to have hundreds or thousands of obsolete catalogues lying around. You don’t have to wait for the printer to deliver the catalogue before the new prices can come into effect.

• The facility to advertise daily, weekly or monthly ‘specials’ and sales, or any special discounts – and they can be changed within minutes, when and if necessary.

• You can also add a marketing message which highlights your strengths, such as the range and quality of your products or services – or anything else you want to tell your customers.

 

Benefits to Organizations

• Electronic commerce expands the marketplace to national and international markets. With minimal capital outlay, a company can easily and quickly locate more customers, the best suppliers, and the most suitable business partners worldwide.

• Electronic commerce decreases the cost of creating, processing, distributing, storing, and retrieving paper-based information. For example, by introducing an electronic procurement system, companies can cut the purchasing administrative costs by as much as 85 percent.

• Ability for creating highly specialized businesses. For example, dog toys which can be purchased only in pet shops or department and discount stores in the physical world, are sold now in a specialized www.dogtoys.com

• Electronic commerce allows reduced inventories and overhead by facilitating “pull”-type supply chain management. In a pull-type system the process starts from customer orders and uses just-in-time manufacturing.

• Electronic commerce reduces the time between the outlay of capital and the receipt of products and services.

• Electronic commerce initiates business processes reengineering projects. By changing processes, productivity of salespeople, knowledge workers, and administrators can increase by 100 percent or more.

• Electronic commerce lowers telecommunications cost-the Internet is much cheaper than VANs.

• Other benefits include improved image, improved customer service, newfound business partners, simplified processes, compressed cycle and delivery time, increased productivity, eliminating paper, expediting access to information, reduced transportation costs, and increased flexibility.

 

Benefits to Consumers

• Electronic commerce enables customers to shop or do other transactions 24 hours a day, all year round, from almost any location.

• Electronic commerce provides customers with more choices; they can select. Electronic commerce frequently provides customers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons.

• In some cases, especially with digitized products, EC allows quick delivery.

• Customers can receive relevant and detailed information in seconds, rather than days or weeks.

• Electronic commerce makes it possible to participate in virtual auctions.

• Electronic commerce allows customers to interact with other customers in electronic communities and exchange ideas as well as compare experiences.

• Electronic commerce facilitates competition, which results in substantial discounts.

 

Benefits to Society

• Electronic commerce enables more individuals to work at home and to do less travelling for shopping, resulting in less traffic on the roads and lower air pollution.

• Electronic commerce allows some merchandise to be sold at lower prices, so less affluent people can buy more and increase their standard of living.

• Electronic commerce enables people in Third World countries and rural areas to enjoy products and services that otherwise are not available to them.

• Electronic commerce facilitates delivery of public services, such as health care, education, and distribution of government social services at a reduced cost and/or improved quality. Health-care services, for example, can reach patients in rural areas.

 

Disadvantages:

• Some business processes such as perishable foods and high-cost, unique items such as custom-designed jewelry might be impossible to inspect adequately from a remote location.

• Costs, which are a function of technology, can change dramatically even during short-lived electronic commerce implementation projects because the technologies are changing so rapidly.

• Many firms have trouble recruiting and retaining employees with the technological, design and business process skills needed to create an effective electronic commerce presence.

• Firms facing difficulty of integrating existing databases and transaction processing software designed for traditional commerce into the software that enables electronic commerce.

• Companies that offer software design and consulting services to tie existing systems into new online business systems can be expensive.

• Consumers are fearful of sending their credit card numbers over the Internet and having online merchants. Consumers are simply resistant to change and are uncomfortable viewing merchandise on a computer screen rather than in person.

 

 

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