Benefits of E-Commerce

Topic: Commerce Words: 873 Pages: 3 Updated: May 28th, 2022

Table of Contents
01. Introduction
02. Advantages of E-Commerce
03. Reduction of Production Cycle
04. Conclusion

05. Reference List

Introduction
E-commerce refers to an electronic system that allows businesses, consumers, manufacturers, and suppliers to buy or sell
goods and services via the Internet. Technological advancement has made it possible for firms to interact virtually with
customers and gather essential information. As Kurnia, Choudrie, Md Mahbubur, and Alzougool (2015) put it, e-commerce
promotes internal and external communication, which is vital in improving organizational efficiency and productivity.
Globalization has led to many companies striving to establish their influence in the international market. E-commerce enables
multinationals to guarantee consistency in products and services delivery across different foreign markets. This paper will
discuss the various benefits that a company can accrue from investing in e-commerce.

Advantages of E-Commerce
The advantages of investing in e-commerce overshadow the drawbacks for many businesses. Nevertheless, Kurnia et al. (2015)
argue that most organizations are not familiar with the capabilities of the Internet. They use this resource for advertising and
sending emails to customers only. Knowing the benefits of e-commerce is critical to its implementation. Yu, Wang, Zhong, and
Huang (2016) insist that it is imperative to make sure that e-commerce corresponds to business goals. One of the benefits of e-
commerce is that it allows a business to remain competitive. Yu et al. (2016) maintain that most consumers will continue to
purchase products in major outlets. Nevertheless, for an organization to remain competitive, it ought to exploit other modes of
consumer buying behaviors. The rise of the Internet has contributed to most customers, particularly millennials and generation
X buying their products and services online. Yu et al. (2016) argue that e-commerce is expected to comprise 17.5% of the
international retail turnover by 2012. It implies that organizations, which have invested in e-commerce, will have an opportunity
to boost their customer share, thus remaining competitive.

One of the demerits of the brick-and-motor outlets is that they are restricted by location, making it difficult for them to reach
many clients. It is hard for a business operating under such a setting to exploit the global market. E-commerce enables
businesses to reach the international market, therefore increasing their returns. Targeting the global market gives a company a
chance to diversify its operations. For example, “if your business is primarily service-based, you may want to complement your
local offerings with products that people can purchase online, such as a hairdresser offering specialty accessories” (Savrul,
Incekara, & Sener, 2014, p. 37). In other words, investment in e-commerce helps a company target the global market by
identifying other business opportunities.

E-commerce allows an organization to tailor its products and services to the needs of individual clients. Savrul et al. (2014)
argue that the Internet supports digital selling and marketing platforms that enable a business to gather information from
customers. The data collected from clients is helpful in understanding their tastes and preferences, thus enabling a company to
improve its products and services to suit consumer needs. E-commerce enables an organization to monitor consumer buying
behavior. In return, a company is able to formulate effective promotional and target marketing strategies.
Reduction of Production Cycle
In the past, procurement, design engineering, and production departments communicated via paper-based approaches. This
mode of communication was ineffective and contributed to an increased period of the production cycle. The introduction of e-
commerce has enhanced communication among these departments, therefore enhancing efficiency. One of the companies that
use e-commerce to enhance the duration of the production cycle is Toyota. The company’s engineering department,
procurement division, and assembling unit are situated in different locations across the globe. E-commerce helps Toyota to
connect the different divisions to expedite production processes (Stanowska, 2018).

The design engineering division sends blueprint sketches and specifications to the purchasing unit via the Internet. The move
hastens to buy of the necessary materials that are shipped to the assembling plants, thus guaranteeing prompt
commencement of the production processes. Another company that uses e-commerce to enhance production cycle time is
Apple Inc. The company sources components from the United States, China, Europe, and Asia (Marinagi, Trivellas, & Sakas,
2014). All the materials are delivered to China where they are assembled to get the final product. Apple uses the Internet to
promote communication between plants located in different countries. The production units are also connected to the
assembling unit. Communication between the assembling unit and the various plants makes sure that components reach the
former on time (Marinagi et al., 2014). It helps to improve the production cycle time and to ensure the timely release of
products into the market.

Conclusion
Businesses benefit immensely from investing in e-commerce. The technology enables an organization to boost its
competitiveness by identifying and exploiting diverse business opportunities. A company gets a chance to grow its customer
base by targeting clients who purchase products online. E-commerce helps businesses target both local and global markets.
Additionally, it enables firms to tailor their products and services to the needs of individual clients. The technology is helpful in
the formulation of promotional and target marketing strategies. Manufacturing firms use e-commerce to improve the
production cycle. They utilize the Internet to expedite communication between different units that are involved in production
processes. It helps to ensure that the production divisions receive requisite information and resources on time, therefore
speeding up their processes.

Reference List
Kurnia, S., Choudrie, J., Md Mahbubur, R., & Alzougool, B. (2015). E-commerce technology adoption: A Malaysian grocery SME
retail sector study. Journal of Business Research, 68(9), 1906-1918.

Marinagi, C., Trivellas, P., & Sakas, D. P. (2014). The impact of information technology on the development of supply chain
competitive advantage. Procedia – Social and Behavioral Sciences, 147(1), 586-591.

Savrul, M., Incekara, A., & Sener, S. (2014). The potential of e-commerce for SMEs in a globalizing business environment.
Procedia – Social and Behavioral Sciences, 150(1), 35-45.

Stanowska, N. (2018). An investigation into the development of Toyota’s e-commerce customer journey. Journal of
Undergraduate Research at NTU, 1(1), 146-181.

Yu, Y., Wang, X., Zhong, R. Y., & Huang, G. Q. (2016). E-commerce logistics in supply chain management: Practice perspective.
Procedia CIRP, 52(1), 179-185.