Chapter 3 Q8 Outline 2 opportunities and 2 challenges faced by companies doing business online?

OPPORTUNITIES FOR E-COMMERCE:


Young Jun Choi1, Chung Suk Suh(2005) reported that the development of the internet in the 20th century led to the birth of an electronic marketplace or it is called e-marketplace, which is now a kernel of electronic commerce (e-commerce). An e-marketplace provides a virtual space where sellers and buyers trade with each other as in the traditional marketplace. Various kinds of economic transactions and buying and selling of goods and services, as well as exchanges of information, take place in e-marketplaces. E-marketplaces have become an alternative place for trading. Finally, an e-marketplace can serve as an information agent that provides buyers and sellers with information on products and other participants in the market. These features have been reshaping the economy by affecting the behavior of buyers and sellers.






1:1 E-business
E-business affects the whole business and the value chains in which it operates. It enables a much more integrated level of collaboration between the different components of a value chain than ever before. Adopting e-Business also allows companies to reduce costs and improve customer response time. Organizations that transform their business practices stand to benefit immensely from innumerable new possibilities brought about by technology (www.ficci.com/sectors/task-forces/e-business/e-business.htm).
E-commerce as anything that involves an online transaction. This can range from ordering online, through online delivery of paid content, to financial transactions such as movement of money between bank accounts. One area where there are some positive indications of e-commerce is financial services. Online stock trading saw sustained growth throughout the period of broadband diffusion. E-shopping is available to all these who use a computer. Over the past year Amazon.Com, ebay India, Indiatimes have seen a rapid growth in categories such as mobile handsets, jewellery, fashion apparel, books, gift items and other items.
Naukri.com – India's premier recruitment site has captured around 50% of the recruitment market.
ICICIDIRECT.com - Stock trading simplified, Icicidirect.com is today the country's premier trading portal.
Baaze.com the country's premier shopping site started as an auction site and graduated to be the most popular platform-shopping site.
Irctc.com - One of the best things about this site is that a credit card is not an essential requirement for buying tickets here. Instead the site offers a direct debit facility having tied with most of the popular banks (www.rajindraflorist.com).
It is being estimated that the online travel market in India was estimated at $300 million in 2005 and has crossed $750 million in 2006. By 2008, it is expected to exceed $2 billion( http://www.m-travel.com/news/2006/10/online_travel_m.html).

Young Jun Choi1, Chung Suk Suh(2005) reported that the economic consequences of the death of geographical distance due to the emergence of e-marketplaces. It has shown that overcoming spatial barriers by means of e- marketplaces lowers the price level. Since e-marketplaces achieve economies of scale by aggregating dispersed demands, they allow the economy to have more varieties that did not exist before their emergence.

1.2 E-commerce integration
Zabihollah Rezaee, Kenneth R. Lambert and W. Ken Harmon(2006) reported that the rationale for infusion of e-commerce education into all business courses is that technological developments are significantly affecting all aspects of today's business. An e-commerce dimension can be added to the business curriculum by integrating e-commerce topics into existing upper-level business courses. Students would be introduced to e-commerce education and topics covered in a variety of business courses in different disciplines e.g. accounting, economics, finance, marketing, management, management information systems. To help assure that all related business courses in all disciplines such as e.g., accounting, finance, economics, marketing, management, information systems pay proper attention to the critical aspects of e-commerce, certain e-commerce topics should be integrated into existing business courses.

CHALLENGES FOR E COMMERCE:

Internet based e-commerce has besides, great advantages, posed many threats because of its being what is popularly called faceless and borderless.

Some examples of ethical issues that have emerged as a result of electronic commerce. All of the following examples are both ethical issues and issues that are uniquely related to electronic commerce.

2.1 Ethical issues:

Jackie Gilbert Bette Ann Stead (2001),reported the following ethical issues related to e-commerce.

1) Privacy

Privacy has been and continues to be a significant issue of concern for both current and prospective electronic commerce customers. With regard to web interactions and e- commerce the following dimensions are most salient:
(1) Privacy consists of not being interfered with, having the power to exclude; individual
privacy is a moral right.
(2) Privacy is "a desirable condition with respect to possession of information by other persons about him/herself on the observation/perceiving of him/herself by other persons"

2) Security concerns
In addition to privacy concerns, other ethical issues are involved with electronic commerce. The Internet offers unprecedented ease of access to a vast array of goods and services. The rapidly expanding arena of "click and mortar" and the largely unregulated cyberspace medium have however prompted concerns about both privacy and data security.



3) Other ethical issues


Manufacturers Competing with Intermediaries Online
"Disintermediation," a means eliminating the intermediary such as retailers, wholesalers, outside sales reps by setting up a Website to sell directly to customers.
Disintermediation include (1) music being downloaded directly from producers (2) authors
distributing their work from their own Web sites or through writer co-operatives.
Dinosaurs – "Dinosaurs" is a term that refers to executives and college professors who refuse to recognize that technology has changed our lives. When an executive speaks in terms of the Internet being the "wave of the future," it is a sure sign of "dinosaur.

1:2 Perceptions of risk in e-service encounters
Mauricio S. Featherman, Joseph S. Valacich & John D. Wells(2006) reported that as companies race to digitize physical-based service processes repackaging them as online e-services, it becomes increasingly important to understand how consumers perceive the digitized e-service alternative. E-service replacements may seem unfamiliar, artificial and non-authentic in comparison to traditional service processing methods. Consumers may believe that new internet-based processing methods expose them to new potential risks the dangers of online fraud , identity theft and phishing swindles means schemes to steal confidential information using spoofed web sites, have become commonplace, and are likely to cause alarm and fear within consumers.

Source: www.wto.org