Benefits and Limitations of Ecommerce

Topics: Electronic commerce, Customer service, Sales Pages: 5 (1035 words) Published: June 18, 2007
Basic Benefits of eBusiness eCommerce
o increase sales - this is the first thing that people consider when dealing w e-commerce
o decreasing costs
o increase profits
o understanding that profits is not the same as sales o Expands the size of the market from regional to national or national to international o Contract the market
o reach a narrow market
o target market segmentation allows you to focus on a more select group of customers
Decreasing costs
o costs of creating the product
o marketing
o of promotional material
o costs of distribution
oeg. Netscape allowing you to download instead of waiting to get the CD by mail o costs of processing (orders from the customers)
orepeat activities and information processing
oof handling customer phone calls
oof handling sales inquiries
odetermine product availability (inventory management)
o costs of storing information
o lowers telecommunication costs o and therefore have a competitive advantages in satisfy Provide price quotes

- with a web site, you can have the prices listed, and change them - you simply edit the web page
- in a printed catalogue you are stuck with the expense of printing a new version if you need to change many of the prices

Other Benefits ....
o Pull-type processing
o enables customization of products
o allows for innovative business models
o allows for a high degree of specialization
o reduces the time exposure
o supports BPR - Business Process Reengineering
o increases productivity
o improves customer service (in some cases)
. ing t
A large component of business these days is dealing with other businesses (B2B) that supply parts and components since rarely do companies manufacture things from beginning to end - most things are made from component parts which are created by different companies. This component approach to manufacturing is true for many services also. Companies supplying services often have that service broken down into sub-contracting services eg. - a building maintenance contract can be subdivided into the following services o security service

o access control
o alarm response
o landscaping service
o summer - grass cutting
o winter - snow removal
o janitorial service
o heating, ventilation and air conditioning service
o electrician service
o plumbing service
o window washing service
Benefits to organizations that use e-Commerce with their business partners - manufacturers and service companies
o minimizes Supply Chain inefficiencies
oreduces inventories
oreduces delivery delays
oenables efficient e-procurement
......Benefits to organizations that use e-Commerce with their business partners - manufacturers and service companies
o build more collaborative and stronger relationships with suppliers. This includes streamlining and automating the underlying business processes, enabling areas such as odirect marketing,

ocustomer services, (call centres)
oreplenishment and
oinformation management.
Benefits to consumers that use e-Commerce (e-Business)
o can buy when you want, from more locations (internet connected terminals) more choices o when you have more choices you can decide on a product with better features at a more competitive price o sometimes products are less expensive online

o can receive more information about the product, make a more informed decision ogreater information leads to more confidence to make...
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