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What are the Bottlenecks in Electronic Commerce?

By Edited Jan 17, 2016 0 0

Remember that, e-commerce is not as simple as we imagine, there are a number of other factors involved in this process. Long ago, people used to waste hours and hours visiting various outlets of the city in search of a desired product, and in many cases, they used to fail. However, the emergence of Internet and technologies and the growth of development has given rise to Ecommerce which became an alternative to peoples shopping problem. With a plethora of products and different modes of payment, this form of marketing products and / or services are being sought by business owners and entrepreneurs to increase their sales revenues and achieve a growing consumer public.

However, contrary to what many think, e-commerce is not just creating a website and start selling your products, there are several other charges and dilemmas involved, apart from the competition be happening globally. However, due to high demand for this market, companies are adapting to this medium. Despite the direct selling certainly be the first way of thinking to make a profit in a relationship between consumer / seller, use the Web as a vehicle for e-commerce began to allow viewing from a number of other ways to add value to a business.

According to studies and developments in this market sector, today the e-commerce can be put into following three types:

  1. Business-to-business (B2B): Two or more companies make transactions electronically. It is considered the main type of electronic commerce;
  2. Business-to-Consumer (B2C): Vendors are organizations and the buyers are individuals;
  3. Mobile commerce (M-Commerce): Electronic commerce occurs in an environment of wireless communication such as the use of mobile phones to access the internet.

Barriers

New technologies require new concepts, new frontiers and of course, limitations to the new trading systems. There is a rapid and fundamental change in the way commerce is conducted, arriving early in the e-commerce gives companies the outset, an experience that translates into a significant competitive advantage. A pioneering experience is essential to acquire and maintain a breakthrough in the Internet arena, interactions with customers on the Internet is different from traditional business interactions. For e.g., electronic advertising and promotion are more personalized, adaptive and directed and availability of services and service on the network should be structured differently, to guide customers through activities like "to help themself." And, due to this increasingly idle and demanding environment several barriers occur when it comes to improving customer service and conveniences for customers, which are explained below:

Technological Barriers

Variations constantly in this area, such as changes in maintenance costs and transaction, are therefore producing major changes in the way these organizations and the economy itself are restructured. And with this steady and rapid growth of the means of communication and transport, this branch of trade has spread to all corners of the world. However, along with this growth and change with the needs and requirement of customers, see the technological barriers, i.e., deadlocks, or even difficulties encountered by entrepreneurs in the maintenance of this trade process.

Today, that can provide good care and maintain good customer / company relationship, it is necessary to have available to computers equipped with specific interconnection, hardware & software appropriate for the management and monitoring of communication and at least one line common telephone that allows the interconnection via computer with a service provider that enables connection. However, although the Web has greatly simplified the use of the Internet, it is still essentially a network of computers where if one considers the multitude of services that can be implemented to meet online consumer and must be scheduled by the users make use of it often complicated.

Cultural Barriers

This spread of e-commerce, willing or not, implies certain life changes and consequently the consumption habits of the people who were not yet adapted to the new methods of shopping and all this practicality. Other barriers, such as language and small cultural habits, although more complicated to evaluate, can also present obstacles to the growth of these online transactions globally, but do not invalidate the use of electronic commerce in geographically defined regions. Thus, the accommodation of these cultural differences, often are not recognized. This must be taken into account when developing an e-commerce systems.

The case of products where the information is contained in them, such as books and CDs, for example, has become the habit of buying linked to physical assessment of the product, before purchasing it. The transmission of product information, despite being affordable, quality and accepted by many depends exclusively on the wide acceptance of all consumers, even having the possibility to choose the product electronically has the desire to possess it physically.

Already, when referring to the acceptance of electronic commerce in the software business, we present different implications, because this has required the multiplication of programs and companies that have several new options to facilitate the use of the internet. Another difference that transformed the idea behind this provision was the letting of services rather than the sale, characterized as "selling subscriptions" and with the limited time use.

A big factor, if not the most important, is the issue of consumer confidence towards the availability of your data to effecting the transaction. The lack of this is derived from the uncertainty of hosting ecommerce. Therefore, there is a perception among consumers that computer networks are subject to constant attack from persons or groups interested in stealing or mis-represent information.

Organizational Barriers

It is not enough just to have an ecommerce and make sales in order to have a competitive advantage over other companies in the sector. You should also take some other factors in to consideration as not to get lost in this constant oscillation of information and competitions. It is necessary to have a sustainable competitive advantage, namely, that create a customer loyalty with the service, guaranteeing quality in providing a good level of relationship between the parties, among others.

The development and implementation of these systems, in turn, will require much investment in human resources with strategic vision, knowledge of business processes, technological capabilities and graphic skills. The ability to manage teams with cross-functional skills and the definition of what should not be outsourced are critical elements. If, on the one hand, the Web environment can allow low cost of entry for a company willing to invest in e-commerce, on the other hand keeping systems running will require a flow of resources that should be extremely valued. It is not without reason that many early entrepreneurs are being takeover by large companies as a way to meet this need of resources.

Structural barriers

By adopting the Internet as a vehicle mass, requires a series of regulatory devices to facilitate the proliferation of commercial transactions, settings best suited to the digital distribution of information property rights, forms of monetary exchange secure and easy to use and also offer guarantees to find and punish the violators of the rules for the functioning of the online world. It is clear, therefore, that trade via the internet can be frustrating if the regulatory transaction systems do not develop at the same pace of technology.

We know that private companies are investing to achieve establish security and gain the confidence that can help develop ecommerce. However, the lack of marking in structural issues and the creation of regulatory mechanisms poses a serious barrier to the development of this area. If private communities, formed electronically, shall have the force to keep the level of regulation required for commercial activities can flow through the Web, as some suggest, can not be predicted yet.

Advantages and Disadvantages

The growing number of virtual stores and e-commerce in general, derives the competition which consequently cause a reduction in prices. Considering and analyzing all the pros and cons of using virtual branch to the transaction and marketing of products, you can list a number of advantages and disadvantages for with this service.

Advantages:

  • Gives the customer more choice and customization;
  • Decreases the time and cost, and choose, for both customers and suppliers;
  • Expanding local and regional to national and international markets, with minimum levels of capital stock and staff;
  • Facilitates the production and just-in-time payments, reducing overhead and inventory through increased automation and reduced processing times;
  • Decrements the high costs involved in transport, storage and distribution, as well as to identify and negotiate with potential customers and suppliers;
  • Improves effectiveness in serving the customer, including on-demand delivery.

Disadvantages:

  • Partial solutions: Current electronic commerce systems automate only part of a process, a fully integrated solution facilitate control over cash flows, storage etc..;
  • Hard Requirements: The first generation of ecommerce systems used dedicated communication lines and highly structured protocols. The time involved and costs incurred due to this stiffness can become barriers to dissemination of these systems;
  • Limited Access: In the present E-Commerce systems, the user can not communicate and interact with vendors direct and free form. The Intelligent Agents and other mechanisms will increasingly closer buyers of websites;
  • Limited interoperability: An Infrastructure for Electronic Commerce interoperating facilitate private transactions, reducing the need for intermediaries unless they are some kind of value-added providers, such as financers. This infrastructure enables increased range of services and consumers;
  • Insufficient Security: Despite all the existing resources devoted to encryption, authentication and certification, there is still effectively a "Currency of the Internet" adopted by everyone. Means of payment such as cheques, are used with restraint in online shopping. The security in electronic transactions is actually one of the aspects of greatest concern to all involved with the Electronic Commerce;
  • The Delivery: Over the time, traditional multinationals will be destroyed by electronic commerce. The delivery of goods, services, repairs, spare parts and maintenance, via ecommerce, will require a different organization from department that multinationals have today. They will also require a new mindset, a different type of management at the board level and finally, new performance settings.

In fact, even the way of evaluating the performance will change. In most companies, delivery is now considered a function of "support", a routine under the supervision of subordinates. Only gives attention to it if something goes very wrong. But, in the age of electronic commerce, the delivery becomes the area that will make the difference between one company and another.

Conclusion:

As you can see, the electronic commerce has its permanent development and through it companies seek better ways to achieve competitive advantage. Several opportunities are offered in it, causing consumers to buy worldwide at a very low cost and offering companies the opportunity to participate on equal terms.

However, with the lack of many things in this area, there are several dilemmas for these trades remain active, always providing a good quality product and a great level of service. However, due to all these security systems developed nowadays, have made it safe to buy products / services via the Internet, taking basic care of personal information only on trusted sites, analyze conditions and rules thereof, etc..

There are great opportunities for countries that are in development process, as they enter the global market, the gap between the rich and poor countries will reduce, bringing increasingly the world into the hands of the population, with the information and products just a click away.

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