Importance of E-Commerce

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1.1 The Mountain Footwear is a small company in the UK, it sells good quality walking and climbing footwear. The retailing is situated in Milton Keynes and main aim of the company is to expand the market. The hypothesis to enlarge the business through a web site will be elaborated in this report; issues such as security and privacy must be concretely analysed. Setting up a business, will bring many advantages both for customer and company. Even though those benefits come with some risks and disadvantages, such as credit card fraud. it is important to understand how the market is developing in order to determine whether there will be an active online market for the company. Overall, the expansion of the business through the e-commerce will be considerably beneficial, enlarging the market and people’s awareness of the organization.

1.2 The MD and the others directors of Mountain Footwear have requested for a report based on considerations in order to determine whether it would be an advantage or not to start up an online service aimed to allow customers’ purchases through the internet.

1.3 An explanation of e-commerce is given by Rayport & Jaworski (2001, p.3) who describe it as: “technology-mediated exchanges between parties (individuals, organizations, or both) as well as the electronically based intra- or organisational activities that facilitate such exchanges”. On the other hand Kalakota and Robinson (1999, p. 4) define electronic commerce as: “buying and selling over digital media” giving more importance to the role of the Internet in every trade. There must be considered that e-commerce also involves other activities such as marketing and advertising but only if they take a position on the Internet.

The electronic business involves both e-commerce and information technology to achieve the aim to start up or develop an existence business. The purpose is to use a wide range of technologies to optimise all business processes. When a minor company decides to engage the e-commerce path, new opportunities become accessible. The firm will enter in a complex system which can be compared to a chain. Both customer and seller are linked in order to set up a high-volume data interchange which permits trading activities to come about in real-time. The outcome is an extremely fast and dynamic response from both sides.

1.4 There is a huge and constant growing competition through the shoes’ market, this phenomenon occurs as a result of many factors. Price has become the Key concept of the market which has been “assaulted” by many non-specialists retailers. Comfort exigency has been replaced by the customer’s necessity of an extremely low price footwear. Massive retailers such as Tesco and Amazon are also selling shoes, taking the advantage of owning a large variety of goods and a huge number of customers. (Mintel)

Not only new retailers should choose a path based on good quality and durable products but also they should experiment and test new selling methods, through e-business retailers may bring more visibility and accessibility to their articles. (Mintel)

(Data source: national statistic)

The bar chart above shows the Internet households access in the UK between 2005 and 2009. The percentage has constantly grown since 2006, reaching a high of 70% in 2009. As it is shown the population who own a narrowband has decreased meanwhile the broadband is spreading, reaching a high of almost 6 times the one of the narrowband in 09’. It is relevant to process information about it in order to determine the future trend. A major household access will proportionally affect the e-purchases from home. One of the most significant aspects of buying through the Internet is the comfort, especially if the deal is done in the familiar environment.

There are many aspects to keep in mind while setting up an online business, the cybernetic world is new reality of fast communication and worldly range, yet, as any other...
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