Benefits and Limitations of Ecommerce

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

o eg. Netscape allowing you to download instead of waiting to get the CD by mail

o costs of processing (orders from the customers)

o repeat activities and information processing

o of handling customer phone calls

o of handling sales inquiries

o determine 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

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Basic

Benefits

of

eBusiness

eCommerce

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