INTERNET BUSINESS AND ELECTRONIC COMMERCE

Internet Business and Electronic Commerce

Internet Business and Electronic Commerce

Introduction

As well as buying? making? marketing? and selling products and services globally? firms can now effectively operate globally in raising capital? conducting research? recruiting staff? and executing projects. Quantum advances in technology? communication? and digital science? together with the proliferation of the Internet? have enabled firms to transform the challenges of the past into the opportunities of the future. The digital world of today assumes a borderless globe inhabited by firms that are interconnected and interdependent through networks of relationships. Globalisation is not a one-way set of flows of goods? services? and economic relationships; rather it is a complex network of processes in which local and global activities are linked together and operate in several directions (Bryson? 2001). Knowledge per se is thus not the driving force today. It is the connectedness of knowledge that is the driving force - as accomplished via networks? webs? and constellations of actors (Sweet? 2001). Product firms and service firms alike have recognised the numerous benefits that can be realised by “un-bundling” their business activities (Chase? 1978)? and then “re-bundling” these activities using networks of partners. Globalisation has thus transformed traditional business models through the advances in information technology (IT)? networks? and relationships.

Castells (2000) has argued that this “new economy” is fundamentally distinct from the traditional model? in that success now depends upon the effective use of information (knowledge)? the implementation of global concepts (business organised on a global scale)? and the creation of networks among economic agents (including interaction among various business networks). This concept of networks interacting with networks is best illustrated by the Internet itself. The Internet can best be understood as a global network of networks - a network that provides a unique infrastructure for global commerce in services (Zinkhan? 2002). The attractiveness of Internet-centric business models resides in their efficiency in:

reducing search costs by facilitating comparison of price? products? and services;

reducing lead times;

improving production and supply capability;

managing demand; and

improving personalisation and customisation of product offerings (Bakos? 1998).

Business paradigms have undergone a re-examination in the light of growing competition. This has induced a shift from “generalist” organisations to “specialist” organisations. Firms are seeking new business models in a move away from vertically integrated structures towards horizontal structures that have a specialised focus on core activities together with the outsourcing of non-core activities. Indeed? as products and services grow in complexity? it is becoming increasingly difficult for a single organisation to undertake the entire process of production? delivery? and marketing effectively. It has become clear that the old “generalist” concept of business is no longer a viable concept? and that it is important to gain recognition as a “specialist”. Modern technology and the Internet can thus assist firms to promote and serve global markets effectively through global networks and alliances? while allowing them to establish themselves as “experts” by focusing on their core competencies.

Business advantage through networks

The idea of a business network is not a new ...