BUSINESS DEVELOPMENT AND GROWTH

Total Word Count: 2396
   Send article as PDF   

<p align=”center” style=”text-align:center”>Introduction</p>
<p>&nbsp;</p>
<p style=”text-indent:.5in”>Small businesses have embraced the internet, using it to transact business and establish new markets. E-business provides businesses with the opportunity to advertise, conduct transactions with other businesses and consumers as well. Despite this, e-business faces a myriad of challenges, ranging from technical, competitive to managerial barriers. In this essay, the author shall strive to identify the opportunities and challenges presented by e-business, and also suggest ways of overcoming these challenges.</p>
<p style=”text-indent:.5in”>The internet has changed the manner in which organizations all over the world conduct their business. The World Wide Web has been adopted by these businesses to serve numerous purposes. For example, the internet is used to achieve collaboration between business, to fulfill communication needs, conduct research, and share information (Zaveri, 2014). One of the most popular uses of the internet is evident in internet business, which is commonly referred to as e-commerce. The term is used to refer to the electronic forms of commercial interaction that take place between a business and its consumers, suppliers and other parties (Morais, Pires and Goncalves, 2012, 280).</p>
<p style=”text-indent:.5in”>E-business has experienced a significant amount of growth over the past decade. This is mainly due to the reduction in the price of hosting services (Agarwal and Wu, 2015, 199). At the same time, software prices have also declined. These two factors have reduced the barriers to entry, enabling more and more companies to engage in e-business. Businesses that fail to understand the challenges associated with online business are more likely to experience significant losses. This creates a need to develop a more comprehensive understanding of the technical, managerial and competitive challenges associated with e-business. Such an understanding will not only enable businesses to anticipate these problems, but also devise effective solutions (Morais, Pires and Goncalves, 2012, 280-1). This essay shall identify the opportunities presented by e-business and the challenges associated with the same. Recommendations on how businesses can overcome these challenges will also be made.</p>
<p align=”center” style=”text-align:center”>Opportunities</p>
<p style=”text-indent:.5in”>E-business is the umbrella term for numerous elements of online business. It is used to refer to e-procurement, e-market place, business-to-consumer link (B2C), often referred to as &lsquo;e-commerce, and business-to-business (B2B) transactions (Wright and Dyer, 2000, 5). Evidence indicates that the B2B link is expanding faster than the transaction between businesses and consumers. It is dominated by big companies and the most common activity evident is e-retailing (Solovay and Reed, 2003, 4-11). Small businesses can choose to use the internet to either engage in e-business or supply software and hosting services to enable other businesses to use the internet for their own business purposes.</p>
<p style=”text-indent:.5in”>Currently, there are large internet providers, such as the America Online. There are also small businesses that provide these kinds of services. These small businesses are experiencing significant growth due to the increased demand for internet access. Furthermore, other small businesses are engaging in e-business by selling software, hardware and services that enable other businesses to remain connected. According to Davim (2013), these businesses also go as far as to offer their consulting services to other companies.</p>
<p style=”text-indent:.5in”>The most significant opportunity for small businesses in e-business is B2B. In the future, it is projected that up to 65% of all B2B electronic purchases will take place in the motor vehicles, government industrial manufactured equipment, retail trade and shipping sectors (Solovay and Reed, 2003, 4-11). &nbsp;This provides opportunities for other small businesses interested in the B2B market (Mahapatra, 2010). Small businesses&rsquo; main concern is evident in the need to increase the efficiency of a business using technology. This concern is easily alleviated by locating customers that will purchase specialized goods and services, second-hand goods, and time sensitive products. In order to benefit from B2B e-commerce, these small businesses need to work collaboratively with other businesses (Solovay and Reed, 2003, 4-12).</p>
<p style=”text-indent:.5in”>Small businesses can expand their markets using the internet. This is because it enables them to attract clients, ensure client retention as well as improve the overall efficiency of their companies (Wright and Dyer, 2000, 62). Besides this, businesses can also explore other business opportunities such as customer services. Other opportunities include data retrieval, public relations, security, payments, costs, and technical support.</p>
<p style=”text-indent:.5in”>Existing businesses stand a better chance when they adopt E-business during its early stages. This is because they can put in place infrastructures that will enable them to experience a reduction in costs and an improvement in their supplier and client relations (Qu and Yang 2012). E-business provides businesses with the opportunity of minimizing costs associated with payments. Furthermore, the billing, procurement and customer service costs also reduce significantly. Evidence also indicates that a business will experience a similar reduction in the resources used to manage expenses, manage their supply chains, and also fulfill their distribution needs (Qu and Yang 2012).</p>
<p align=”center” style=”text-align:center”>Challenges</p>
<p style=”text-indent:.5in”>The rate at which small businesses are embracing e-business is slower than big businesses. This is due to the numerous challenges they face when trying to adopt e-commerce. One of these challenges is evident in the high amount of competition and low barriers to entry seen in e-commerce. As a result, small businesses experience losses, and eventually shut down. This trend is particularly evident in companies that deal with toys, office supplies and computers (Seliger. 2012). The high level of competition and low barriers to entry reduce a business owner&rsquo;s capacity to endure in the B2C sector.</p>
<p style=”text-indent:.5in”>Another challenge presented by e-businesses is evident in the significant amount of power wielded by consumers. Customers now have the ability to manipulate the price of goods. Through websites such as <i>Compare.net</i>, consumers acquire information regarding the various companies stocking their preferred goods and the prices they are offering. In this manner, they can either ask businesses to either reduce their prices or purchase from competing companies that are offering cheaper goods (Seliger, 2012).</p>
<p style=”text-indent:.5in”>While B2B companies have experienced a significant amount of growth, they are considered nothing more than meeting places. As a result, it is most likely that the projected bankruptcy expected to affect these companies will be realized. This is because their trading partners do not find their services valuable (Becker, 2008, 105). These services include providing support for the development of RFP&rsquo;s, integrating back-end systems, and supplying particular goods for industries. Furthermore, free markets experience the additional burden of providing their clients with content that it unmatched (Dornfeld and Linke, 2012).</p>
<p><i>Technical Challenges</i></p>
<p style=”text-indent:.5in”>Small businesses require a website if they are to conduct business over the internet. They have three options to choose from, which include, hosting their own site, host their site with the help of a hosting service provider, and also use either <i>Yahoo</i> or <i>GeoCities</i> portals. The final option requires businesses to pay a monthly fee. In return, the portals help these companies develop their sites, deal with maintenance issues, collect statistical information, and also calculate taxes. However, these portals prevent businesses from having a unique domain name. For example, they are forced to use &ldquo;www.smallbusiness.yahoo.com&rdquo; instead of &ldquo;www.smallbusinessname.com.&rdquo; Furthermore, the portals do not grow with the business. Instead, they tend to encounter difficulties dealing with the increased volume of orders (Yang and Ma, 2013).</p>
<p style=”text-indent:.5in”>Security issues are also prominent in the e-business (Morais, Pires and Goncalves, 2012, 284-5). E-business faces numerous uncertainties due to increased online insecurity. The internet technology allows for the exchange of important and sensitive information. Hacking attacks often seek to retrieve consumer&rsquo;s credit information, a factor that has made consumers wary of online shopping (Solovay and Reed, 2003, 4-19, 7-11).</p>
<p><i>Business Challenges</i></p>
<p style=”text-indent:.5in”>Small businesses are also bound to experience issues with brand recognition, once they venture out into e-business. Evidence indicates that businesses need a strong brand if they are to become successful in the business world (Morais, Pires and Goncalves, 2012, 285). Some businesses find it difficult to achieve brand recognition in the relatively new market. They face challenges when trying to establish relations with consumers. They are also unable to attract new clients in the online market.</p>
<p><i>Other Challenges</i></p>
<p style=”text-indent:.5in”>Researchers have shown that human resources are an important asset for any organization (Morais, Pires and Goncalves, 2012, 285). In a bid to reduce costs, companies operating within the internet sector are dismissing employees. At the same time, there is a current demand for the highly-skilled workers, a trend that has resulted in the reduction of employee loyalty (Hadjsaïd and Sabonnadière 2012). Small businesses in e-commerce are bound to encounter challenges with attracting good employees and retaining them.</p>
<p style=”text-indent:.5in”>An additional challenge is seen in the increased theft of intellectual content. At the same time, businesses&rsquo; lack of knowledge about e-business is bound to hamper a business&rsquo;s progress. In fact, it often results in the poor alignment of the business with technology. Most importantly, there is poor coordination between the business, its employees and technology (Morais, Pires and Goncalves, 2012, 286-7).</p>
<p align=”center” style=”text-align:center”>Recommendations and Conclusion</p>
<p style=”text-indent:.5in”>Several recommendations will be made to enable small businesses to cope with the challenges associated with e-business. However, it is worth noting that there is no &ldquo;one-size-fits-all&rdquo; approach in e-business. An excellent approach to management or a unique technology does not always guarantee profitability in e-businesses (Jaccard, 2013, 78).</p>
<p style=”text-indent:.5in”>The problems associated with a lack of knowledge can be successfully resolved through training. It is important for small businesses to ensure that their employees are up to date with current information in the e-commerce sector. Training will not only increase their knowledge, but also sharpen their skills, making it possible for the company to become aligned with technology and for the personnel to coordinate properly with internet and other technologies employed in e-business. Training is also an important tool in the retention of employees. This is because it supports an employee&rsquo;s desire for career development and hence increased compensation. On this note, training can also be used to resolve issues with employee retention (Wright and Dyer, 2000, 60). It is also important to nurture employee commitment through incentives such as good working conditions, work-life balance and bonuses (Wright and Dyer, 2000, 61).</p>
<p style=”text-indent:.5in”>The issue of brand recognition can be resolved through three main approaches. First, the website should be a positive representation of the brand&rsquo;s image. It is the first thing that clients that see when they engage in e-commerce. As a result, it needs to be customized so that clients can offer their feedback on goods and services. At the same time, a catalogue of the products sold should also be included in the site (Jin and Lin, 2012). To increase user-friendliness of the site, the pictures contained in the catalogue can be placed in thumbnails so that consumers use up little space and time when downloading them.</p>
<p style=”text-indent:.5in”>Secondly, heavy advertising tends to reinforce the positive image of a business. With increased competition, e-businesses need to ensure that they maintain a heavy presence in both traditional markets and also on the internet (Jefferson and Tanton, 2015). Finally, e-businesses can employ gimmicks to attract a large consumer base. These include offers such as free shipping, and additional gifts with each successful purchase. While gimmicks do not offer long-lasting competitive advantage, they can attract new consumers, hence promoting the company&rsquo;s brand.&nbsp;</p>
<p style=”text-indent:.5in”>Intellectual theft and insecurity issues can be easily resolved through self-regulatory business practices (Solovay and Reed, 2003, 7-13). For example, businesses can use patents and copyright to protect their online content. At the same time, they should ensure that their website designers are reliable individuals. Furthermore, they should inform their users that all information they provide shall only be used to serve internal purposes and not shared to third-parties (Becker, 2008, 148). To reinforce client confidence in e-business, companies need to reassure their consumers that their information is protected. They also need to take necessary precautions to guarantee them this safety (Kačmáry and Fedorko, 2015). In the case of an attack, contingency plans should be set up to ensure that the attacks can be dealt with in an adequate manner.</p>
<p style=”text-indent:.5in”>Today, the internet has disrupted the traditional way of conducting business. It is only expected to continue growing over the next couple of decades. This growth will be driven mainly by the increase in the number of people, machines and data and small businesses connected to the internet. Small businesses can take advantage of the numerous opportunities presented by e-business. They also need to understand the challenges presented by the same so that they can address them effectively. This will increase their competitive advantage in the internet market sector, which is mired by low barriers to entry and increased competition.</p>

Scroll to Top