E - Business: Success or Failure?

Technology has been able to change our lives incrementally and sometimes drastically. According to Chanaron & Jolly (1999), this impact is more pronounced on businesses, as computers and other technologies are here and not going any time soon. The proliferation of technology in products and services show an insight into how many companies across industries are investing in technology (Papers4you.com, 2006). This insight provides a lesson for managers on how to run and grow a business in a volatile and competitive market place. This has resulted in the rise of electronic businesses across the globe in the last decade.

The diffusion of the internet and commerce has been the center of discussion both by the academics and the practitioners due to its growing importance in the developed countries. This has largely been contributed due to the high penetration of internet connectivity and online transactions of business-to-consumer (B2C) and business-to-business (B2B) nature. E-businesses have evolved from plain text websites to interactive e-commerce hubs that use internet and mobile technologies to reach their current customers and attract the potential customers (Karen, 1996). Theorists (Chang & Kyungdoo, 2005) believe that the evolution of internet itself has been staggering in the last decade and therefore more ways to conduct businesses have emerged. The use of internet has provided firms with the ability of ‘lean’ and ‘agile’ value chain, which means that firms can keep their operating costs at minimum along with the flexibility to grab any window of opportunities.

Current improvements in the internet services and its inherent characteristics like improved security, reliability, user friendliness, two-way communication, low costs, accessibility and customizability, have been the driving forces for e-commerce (Papers4you.com, 2006). The use of internet offers value to all the stakeholders. Drawing upon Dawes & Rowley (1998), it reduces the operating and distribution costs of the businesses and provides products and services to the customers sitting at home at any time.

The use of internet has opened new avenues for the adoption of innovative business models based on the proliferation of this technology. Tendering via reverse auction also called “e-reverse auctions” or “B-2-B reverse auctions”, for example, have been a common method to source production and non-production goods and services by many Fortune 2000 companies since 1995 (Richards, 2000). Similarly internet has provided the opportunity for affiliate marketing, which optimizes marketing spending by only paying when the particular marketing objectives have been met. Another example of e-business is online bartering, which according to Copeland (2006) is the process by which two parties strike a deal to exchange goods or services without money changing hands.

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