0 3 Greater access to the internet has enabled buyers to search more easily for information about potential suppliers of goods and services. This has significantly affected many industries, such as insurance, banking, retailing and travel. To what extent do you think that increased internet usage inevitably reduces producers’ profits? Justify your answer with reference to organisations and/or industries that you know. (40 marks)
In recent years, shopping on the internet has become increasingly more available. Lots of companies main revenue stream is through the internet, and some companies only revenue stream is through the internet. Internet sales have reached almost £30 billion for the year 2012 which is 10% of the total sales in the UK. Internet shopping has become so big of recent times because of the technology that everybody has. The introduction of smartphones, iPods, iPads and all technology like this makes it much easier, quicker and cheaper to buy online rather than going to a store.
One advantage of internet shopping is it is now very safe and you are unlikely to get fraud on the internet with regards to buying goods and services as internet security has become much tighter, therefore consumers are much more likely to buy from the internet and if they find a brand or product they like, it is likely that they will get repeat sales. Another advantage of internet shopping is it gives the company a good opportunity to advertise your products. A majority of the UK population use the internet regularly; this is a huge market and a great opportunity for companies to get their name and their products out there. Also, it is very cheap to advertise online, this is a good way for a company to become leaner and cut their costs.
One example where a company has been hugely affected by greater access to the internet is Amazon; this may seem surprising as Amazon do all their business online. However they had to change from their usual hardback books to...
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