Essay by blitz-aceHigh School, 11th gradeA+, July 2005

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Every era of business yields new strategies and new ways of doing business. With the introduction of radio and television came the first mass-market advertising. Nowadays the Internet and something known as e-commerce are radically changing the business world gradually. There are some elements of commerce that are necessary for any transactions to take place, which should be available for regular bricks-and-mortar commerce as well as for e-commerce. First, whether a firm is doing business online or in the real world, it must have a product to sell or a service to offer. Then, the place from where to do business should be considered. In the conventional world of commerce this can be a physical store. In the world of e-commerce the place to do business is the Web site. E-commerce is an emerging concept that describes the process of buying and selling or exchanging of products, services, and information via computer networks including the Internet.

There are many reasons that lead companies to go for e-commerce, one is that e-commerce does reduce costs and prices. This concept allows producers sell directly to consumers over computer networks and therefore eliminates existing intermediaries as well as reducing transaction costs. These lower production costs would encourage new firms to enter the market hence increasing competition. This would then pressure the companies to pass lower costs on to consumers as lower prices. In addition, consumers would be able to survey for the lowest prices available in an online market, thus increasing the downward pressure on prices and leading to a shift in market power from producer to consumer.

All these factors would improve the efficiency of economies and increase long-term growth. E-commerce also expands the market place as an online business can reach customers wherever they are. It also helps to improve...