Relatively Low Start Up And Running Costs

Published Date: 02 Nov 2017

As described in the given scenario Mr. Mamun has started an e-commerce business. Introducing e-commerce to his organization has important impact on his organization. The impacts on his organization are described below:

Benefits:

Global Marketplace:

The benefit of introducing e-commerce to Mr. Mamun’s organization is the business goods will be available for consumers worldwide. This could increase the number of customers because the business will be available worldwide. If the customers are increased, the revenue will be increased as well. The business could expand if more customers buy their products.

As the business expands, it will have more competition from other businesses. For example, a business could be the leading company in one country but it will be difficult for that company to compete for other businesses in other areas or countries.

24/7 Trading:

Trading online means that there is no store staff required to run the online shop and transactions can be carried out at any time. No staffs are required to make sales and all orders and transactions can be taken and acknowledged automatically.

Relatively low start-up and running costs:

Setting up an online store does not have such high initial costs compared to a traditional store. Setting up a traditional store involves buying or renting a place or location, purchasing stock, hiring staff and paying for utility costs.

Pricing opportunities:

Differences:

Generally, there is a price difference between the traditional stores and online stores. Online discounts and prices will encourage shoppers to buy goods from an online store. A product in an online store is cheaper because online stores need not to pay for renting of shop space, and utility bills and employing staff. Online stores save money from these aspects of business and passing it on to customers by lowering their prices.

Fluid pricing:

Online stores can also take advantage of fluid pricing which is increasing or decreasing prices quickly depending on circumstances. It is more difficult to increase or decrease prices quickly in traditional stores. For example, when a specific item is sold quickly and few are available, this item could become more expensive as the demand for this item rises. This could make profit for the business. Another example is if an item is not sold for its current price, they could lower the price of this item to make sure that the items are sold.

Drawbacks:

Consumer trust:

One drawback of introducing an e-commerce system to a business is the lack of trust by customers. Some customers think that a business will not keep their personal details private. Some customers also get annoyed when sites personalize their experience by suggesting products based on their previously purchased product.

Lack of human contact:

Another disadvantage of introducing an e-commerce system is the lack of human contact. Customers are discouraged from buying products online because they can’t speak to anyone from the business. Some customers find it impersonal shopping online.

International legislation:

A potential disadvantage for an e-commerce business is the international legislation or laws from a different country.

Security issues:

Another drawback with introducing an e-commerce system is the security issues. It is one of the biggest worry of consumers that their personal and financial details will not be safe from hackers and criminals to commit identity theft. They think that a business might be unsafe or not trustworthy enough for them to hand over their details to an e-commerce website.

Risks of Introducing the e-Commerce System to Mr. Mamun’s Organization:

Today's threats of Introducing the e-Commerce System to Mr. Mamun’s Organization include:

Physical threats - threats posed to the IT infrastructure by, for example, fire or flood.

Data threats - threats posed to software, files, databases, etc by viruses, Trojans and so forth. For more information on data threats and how to avoid them, see our guide on securing your e-commerce systems.

Errors by people, e.g. employees clicking on links within messages received on social networking websites that are found to be malicious or the accidental deletion of data by an employee.

Technical failure, e.g. software bugs.

Infrastructure failures, e.g. server crashes.

Credit card and payment fraud.

Malicious attacks from inside or outside your business.

Hacker threats should your computers become part of a larger group of infected, remote-controlled computers known as a botnet. Read the page on risks from viruses, Trojans, worms and botnets in our guide on securing your e-commerce systems.

Typical threats to e-commerce systems:

Risk to corporate information and intellectual property from internal staff and trading partners. It is difficult to control how sensitive information will be handled by third parties or contract workers. Few organizations have systems in place to ensure common standards in vetting staff and provide security mechanisms between trading partners.

Hacker exploitation of errors in software application design, technical implementation or systems operation. In addition, vulnerabilities in technical security mechanisms and operating systems are now widely published for anyone to read or experiment with.

Website defacement - where the corporate image or messages on the website are changed - and virus attacks can lead to commercial embarrassment and damage to the way the business is viewed by its trading partners and the public.

Denial-of-service attacks - which use a flood of false messages to crash a business' systems - can have a devastating impact upon a business, especially if it is dependent on its e-commerce system. The growth of the internet means that there are wider opportunities to mount such an attack, with the anonymity afforded by the internet meaning that there is a correspondingly lower risk of traceability. Hackers are increasingly using botnets - a group of computers infected with malicious software and controlled remotely - to cause these attacks. They are also operating the attacks in such a manner so that servers aren't crashing but slowing down considerably.

Potential impact:

Unless swift action is taken, any problems with your e-commerce site will be immediately obvious to the world. E-commerce customers typically have very little loyalty, so if your website is unavailable they will simply move on to one of your competitors. In addition, technical failure can have a significant impact, not only on your customers but also on key trading partners.

Given the prospect of this almost instant loss of revenue, taking steps to prevent problems is much more cost-effective than trying to fix them once they have occurred.

Task 2.2:

Global impact of the given e-Commerce system on society

Social impact or implication of e-commerce is how the emergence of e-commerce has affected society since they are introduced. They have become very popular nowadays. The global impact on the society discuss with both positive and negative impact.

Positive impact of e-commerce system on society

Convenience: e-commerce is very convenient for customer ,because it accepts different type of credit and debit cards and as many other forms of payment as possible . customer don’t need to go anywhere for payment ,customer can carry as many items in stock as possible to avoid backorder ,it is often convenience because the order goes hand –in –hand with in timelines to customer

Helpful for disables and aged people: Helpful for disables and aged people: as the disable and aged people are less able to walk and might be live alone , so by the e –commerce they don’t need walk to door to door of different shops   in that search of things ,whatever they need that will come to there door within the timeline, within reasonable prices and if they don’t like the product they can return it back within the time period of product.

Time saving: With e-commerce, consumer can save their time, because they can have access to their money through internet and work all from a desktop computer and save the time of going to so many different shops in search of thing they wanted, they will get so much choices on e-commerce at sitting at their home, in that mean time they can do there different works.

Information availability: e-commerce enables consumers to make price comparison so that they can make more appropriate choice depending on their needs and budget. For the availability of information they can very easily get their desired products for a committable rate. This lessens their cost for buying products.

Helpful for new business: e-commerce system is very helpful for new business. In these systems you can very easily introduce new ideas and you do not need a very large scale change in your business. A little change can be done to implement your ideas.

Jobs for society: e-commerce introduces new jobs for the society. You don’t need to much education for a job in the e commerce sector. Many unemployed persons who got sufficient skills can get jobs in e commerce business at ease showing their proof of expertise.

24 hour service: A customer can get 24 hour service from an e-commerce system. That means there is no need to think about suitable time to go to a market or they don’t need to spend time to go to markets. This helps the customer to get the thing when they need it right away.

Available niche products: A 'niche' product would be something very specific (could be a new market) which won’t be regularly sold in big stores. And you would need to go to a specific shop in order to purchase it. But you can always buy it online using e-commerce sites and you don’t need to go to the specific shop

Disintermediation: Disintermediation is the displacement or elimination of market intermediaries, enabling direct trade with buyers and consumers without agents. E-commerce systems help Disintermediation process. This lessens the price of product and the customers get it at a cheap rate

Environment friendly: e-commerce is very environment friendly. One positive effect of the emergence of e-commerce is that it may save energy. Consumers who shop online rather than drive to stores use less fuel and their cars emit less pollution. Also, because e-commerce reduces the need for warehouse space to house goods near retail stores, these warehouses use less energy. This reduces carbon emission which is responsible for the green house effect.

Negative impacts of e-commerce on society

Unemployment: As e-commerce business needs very few stuffs to run so this affects the overall unemployment of the society. Huge people related to traditional business now losing jobs as now a day’s companies are turning more and more importance on e commerce rather than traditional business.

Increase in crime: more and more e-commerce gives a rise to digital crimes. More are more fraud are engaging with crimes of this type. Hackers and Crackers are putting their trap to make a fool out of the non-technical general customers and they are hacking their online bank account and taking all of their money which is making more and more people lose their money, bank account, privacy etc.

Health concerns: As you can find practically almost anything online this is making people more and idler. Idleness has a serious health concern. As we know IDLE people gets many diseases for being inactive so e-commerce is impacting the overall health of the nations globally.

Environmental harms: More e commerce means more and more web hosting. More and more energy is needed to run those computer servers. So more power station is needed. More fuel has to be burnt in those power stations which will pollute the environment at a more increasing rate. More computers also pollutes the environment as they need more and more devices and more devices create more wastage components which is related to pollution of environment.

Wrong information: Often users get wrong information from the e-commerce websites. Often the actual information is not given by those dishonest owners of some fraud e commerce web site.

Returns and complaints: Often returns and complaints service of defected products will not be at the same speed as a physical shop or business. So often the customers will have to wait for this service. Sometimes this may create problem and make wastage of their valuable time.

Although there is some drawback of the e-commerce like Mr. Mamun’s, has great significance on the overall impact of e-commerce on the society has so many positive sides. E-commerce is keeping contribution in global socio economic condition. It is changing the way we look our society. It is enriching our business experiences. Hope e-commerce will change our global society in more and more positive way.