Small business use of electronic commerce Essay Example | Topics and Well Written Essays - 750 words

Small business use of electronic commerce - Essay Example In an environment in which time is precious the advantage to the consumer is undeniable. Not only that, but the concept can reduce costs too. For instance, Pea Pod that stores the goods which a customer wants can sort and pack these goods considerably more efficiently than the store and can be located out of town in an industrial park or other area where cheap rents are available. Moreover, staffing requirements are lower, the incidence of in-store theft is reduced, and the hours of operation can be extended. For small business companies like KOA MART, the opportunities of Internet-based commerce seem considerable, but few companies have yet succeeded in exploiting them profitably. Such success is dependent on acquiring an in-depth understanding of the characteristics of the Internet and matching these with the characteristics of existing products or services. In contrast to Pea Pod, KOA MART proposes better catalogues and more vivid visual representation of its products. It is easy to find a product and its price. Pea Pod has poor design and simpler structure; it is difficult to navigate and use this site. The majority of sites linked to "small business +electronic commerce" are devoted to potential online resources and analysis of the market opportunities. Some of the sites propose technical assistance for small business while others highlight the main trends and e-news about developments within the industry. This information can also be used by small business organizations that want to sell as well as buy (Demery, 2007). Small business companies may see that competitor's price reduction appeals only to a certain type of customer (those, for example, who have easy access to the competitor's products; in other words, the discount is not sufficient to attract customers who do not have this access). In this case, proposal would be to restrict their own price reduction so that it applies only to those customers who have easy access to the competitor products. By doing this, they can minimize the impact of competitor's actions on overall margins (Demery, 2007). Thus companies may identify that if one of competitors reduces the price of a product, volume of sales will go down; if companies reduce price at the same time, volume of sales will remain static (assuming that companies also match competitor's price promotion or other marketing tactics). One of the key characteristics of the goods and services that are capable of being traded successfully on the Internet, therefore, is that they are recognized and understood by the consumer (Howlett, 2007). This means either that they must have a strong brand (so that the consumer knows what to expect) or that the goods must be of such a nature that the consumer knows what they will receive. There are many thousands of sites on the Internet, which makes it considerably more competitive than local shopping mall or high street. Getting people to enter a site is as difficult as, if not more difficult than, getting people to purchase goods from a retailer (Howlett, 2007). The Internet did not level the playing field between large and small businesses because large companies receive great opportunities to reduce prices and tattract global target audiences. While one of the major advantages offered by the Internet is that - as a manufacturer, for example - a small company no longer has to do battle with retailers and competitors to obtain the