E-commerce is used to describe the execution of business transactions within and across countries using the internet. In simpler terms e-commerce is the process of buying and selling via the internet (Graham, 2008). These transactions may either be B2B or B2C or C2C. Generally internet usage level and infrastructure for e-commerce are very low in poorer countries (Shenkar & Luo 2008. The trend is fast changing and according to the Internet World Stats, as at September 2010, 1.97bn people, representing 28.8% of the world’s population were users of the internet
Growth and Impact
Bill Gates (2000) predicted that the internet will have ‘’profound effect on the way we work, live and learn’’ and that it will be the one key cultural and economic force of the 21st Century. Truly the internet has become a major driver in today’s global business. It has created a seamless platform of suppliers, customers and competitors that freely interact and develop into a virtual value chain (Porter 2001) and has significantly impacted management of MNEs. Koenig et al, (2004) argue that there is a high level of (internet) saturation in manufacturing, retail/wholesale, banking/Insurance.
Today E-commerce is critical to funds transfer, inventory management, establishment and management of supply chains. By this medium communication and marketing costs are significantly reduced and efficiency is increased. Customers are able to compare prices and products on-line to be able to make choices. It is also worth noting that e-commerce is not an end in itself but a means to reduce costs, improve internal and external processes enter new market (Graham, 2008).
Opportunities to MNEs
The internet and e-commerce
•Allow movement of information with reduced costs and enables easier access to customers globally without the usual costs. Michael Porter (2001) states emphatically that e-commerce can allow economic actors to significantly reduce their...