Question

Briefly discuss any five advantages of e-commerce over traditional commerce.

Answer 1

Benefits of E-commerce over traditional commerce are as follows:

1. Global Reach/Global Choice: The boundaries of electronic business are not defined by geography or by national borders, but rather by the coverage of computer networks. Since the most important networks are global in scope, electronic commerce enables even the smallest suppliers to achieve global presence and to conduct business worldwide. Access to global market place helps to improve operations of business firms. 
   The corresponding customer benefit is global choice-a customer can select from all potential suppliers of a required product or service, regardless of their geographical location.
2. Improved Competitiveness/Quality of Service: Electronic business enables suppliers to improve competitiveness by becoming "closer to the customer". As simple example, many companies are employing electronic commerce technology to offer improved levels of pre- and post-sales support, with increased levels of product information, guidance on product use, and rapid response to customer inquiries. The corresponding customer benefit is improved quality of service.
3. Mass Customisation/Personalised Products and Services: With electronic interaction, suppliers are able to gather detailed information on the needs of each individual customer and automatically tailor products and services to those individual needs. This results in customised products comparable to those offered by specialised suppliers, but at mass market prices. One simple example is an online magazine that is tailored for the individual reader on each access to emphasise articles likely to be of interest and exclude articles that have already been read.
4. Shorten or Eradicate Supply Chains/Rapid Response to Needs: Electronic business often allows traditional supply chains to be shortened dramatically. There are many established examples where goods are shipped directly from the manufacturer to the end consumer by-passing the traditional staging posts of wholesaler's warehouse, retailer's warehouse and retail outlet. The cycle time involved in a transaction is considerably reduced due to high speed of e-business. Information can be exchanged at the click of a mouse.
   The extreme example arises in the case of products and services that can be delivered electronically, when the supply chain can be eradicated entirely. This has massive implications for the entertainment industries (film, video, music, magazines, newspapers), for the information and "edutainment" industries (including all forms of publishing), and for companies concerned with the development and distribution of computer software.
   The corresponding customer benefit is the ability to rapidly obtain the precise product that is required, without being limited to those current in stock at local suppliers.
5. Substantial Savings/Reductions: One of the major contributions of electronic business is a reduction in transaction costs. While the cost of a business transaction that entails human interaction might be measured in dollars, the cost of conduction a similar transaction electronically might be a few cents or less. Hence, any business process involving "routine" interactions between people offers the potential for substantial cost savings, which can in turn be transacted into substantial price reductions for customers.
6. Novel Business Opportunities/New Products and Services: In addition to redefining the markets for existing products and services, electronic business also, provides the opportunity for entirely new products and services. Examples include net work supply and support services, directory services, contact services (i.e. establishing initial contact between potential customers and potential suppliers) and many kinds of online information services.
7. Convenience: On the Internet transactions can be made 24 hours, 7 days a week and 365 days a year. One can access anything from anywhere at any time. Such flexibility provides great convenience to sellers, buyers and employees.
8. Paperless Society: E-business reduces dependence on paperwork and the attendant red tape. Tax payers can file returns electronically. Government can grant licenses and approvals without much paperwork.
9. Speed: Much of the buying and selling involves exchange of information. On the Internet, information can be exchanged at the click of a mouse. E-business substantially reduces the cycle time of a transaction.
10. Lower Investment: lt is much easier to start an e-business than a traditional business. Capital required is much less. A small firm can obtain the same benefits of Internet technology which are available to big business. In e-business, networked firms are more efficient than networthed firms.