WHAT IS INTERNATIONAL BUSINESS? – ENTERING OVERSEAS MARKETS part 10

The article on entering international markets continues, part 10

E-COMMERCE: using inter-networked computers to create and transform business relationships. Applications provide business solutions that improve the quality of goods and services, increase the speed of service delivery, and reduce the cost of business operations. A new methodology of doing business in three focal areas:

*Business-to-business *Business-to-consumer *Intra-business

It is most commonly associated with buying and selling information, products, and services via the Internet, but it is also used to transfer and share information within organizations through intranets to improve decision-making and eliminate duplication of effort. The new paradigm of E-Commerce is built not just on transactions but also on building, sustaining, and improving relationships, both existing and potential. Companies like Dell Computer, Toys-R-Us, Ebay and Yahoo have found E-Commerce a viable business model. With an estimated $50 billion expected in E-Commerce in 2002, this type of business relationship is here to stay.

PROS:
1) Quick, easy way to increase market share; if correct marketing methodologies are employed
2) Easy way to gain a “presence” in international markets;

3) After capital costs paid off, productivity, and therefore, profits increase;
4) Enables greater economies of scale.

CONS:
1) Hardware and software are essential, and these are big expenses;
2) Distribution must be very efficient;
3) Website needs constant updates, which leads to extra labor, training, and retraining costs.
4) True costs of Ebusiness difficult to calculate
5) Much less trust than “click and brick” entities

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