E-Trade Strategy and Electronic Commerce

E-Trade Strategy and Electronic Commerce

Table of Contents

Introduction………………………………………………………………………………..3

Part I……………………………………………………………………………………….4

Part II…………………………………………………………………………………….23

Conclusion……………………………………………………………………………….27

Bibliography……………………………………………………………………………..28

Introduction

In this report we are tiring to find out the advantages and disadvantages of using e-commerce for exports and imports in the garment industry worldwide.

The statistical data found will help us analyze how different companies operate around the world, in different markets. In order for us to establish our own e-commerce trading firm we need to be familiar with the competition in order to achieve an advantage. We need to be familiar with the customers as well to be able to provide them with what they would want. Assessing these factors can help us in utilizing the resources and capabilities the company has in order to the greatest return from them. The questions that we are looking to find answers to are the following;

• How did the e-commerce industry develop

• The value of e-trade around the world

• How is the competition

• Threats of new entrants

• Key success factors

• How to establish an e-commerce firm and make it successful.

Part I

Background of Electronic Commerce

E-commerce is the buying and selling of products over electronic systems such as computer networks and the Internet.

The face of e-commerce has changed dramatically over the past 30 years. In the 1970s it was used only to facilitate the sending and receiving of commercial documents from one company to the other. New inventions, such as the acceptance of credit cards and the use of ATM machines in the 1980s expanded the use of e-commerce. From the 1990s e-commerce has further expanded into information mining and warehousing, as well as into enterprise resource planning. The first pre-internet online system was introduced in 1991, American Information Exchange, in order for people to trade information and for online consulting.

The main boom in e-commerce came about with the development of the Web. Between 1998 and 2000 most major companies developed their own web sites. This allowed them to trade on the Internet with the use of secure connections, credit card payments and e-shopping carts.

E-commerce has lowered the barriers of entry hence allowing many smaller companies to enter the market, even for some to operate from home. The estimated increase in the use of e-commerce is 18% per year in the USA only.

Advantages of Electronic Commerce

E-commerce has several advantages. Transaction costs can be significantly lowered as this method eliminates the service costs and lowers the order taking costs. Sellers do not have to set up shops and employ people to keep them up. People can shop without having to leave their houses whenever they want to as the “online shops” are open all the time. Online stores allow you to see what items go well with your purchase or what products did other people purchase who bought what you have. Amazon.com for example uses this method and manages to sell more books than what people would have originally bought. Companies can integrate e-commerce into their business cycles. For example FedEx on-line package tracking where people can check exactly where their items are. This gives customers more information then what they initially had. People are more willing to put money into something they trust and the increase in information increases the customers’