E-COMMERCE AND BUSINESS START-UP AND GROWTH

A. The Role of E-Commerce.

1. Both business-to-business and business-to-consumer e-commerce sales continue to increase.

2. The largest e-commerce growth occurs during the fourth quarter holiday season, although there has been growth in all quarters.

3. Factors that facilitate the growth of e-commerce are:

a. The widespread use of personal computers.

b. The adoption of intranets in companies.

c. The acceptance of the Internet as a business communications platform.

B. Using E-Commerce Creativity.

1. The Internet is especially important for small and medium-sized companies as it lets them minimize marketing costs while reaching broader markets.

2. An entrepreneur starting an Internet commerce venture needs to address many of the same strategic and tactical questions as other companies plus some specific online issues.

a. One decision is whether to run the Internet operations within the company or outsource these operations.

b. If handled in house, expensive equipment, software, and support services have to be maintained.

c. There are numerous possibilities for outsourcing the Internet business.

3. The entrepreneur can hire web developers to design the web page or use an e-commerce software package.

4. The two major components of Internet commerce are front-end and back-end operations.

a. Front-end operations are encompassed in the website’s functionality, such as search capabilities, shopping cart, and secure payment.

b. Back-end operations involve integrating customer orders with distribution channels and manufacturing capabilities.

C. Website.

1. The use of websites by entrepreneurial firms is increasing.

a. Yet the majority of small businesses do not feel they have the business ability to build their own website.

b. The entrepreneur needs to structure the website to effectively engage the target market.

c. The material must be fresh and updated regularly.

2. There are several important features of every website.

a. Each website should have search capabilities.

b. Other functions include shopping cart, secure server connection, credit card payment, and customer feedback features.

c. Orders and other sensitive customer information should be transferred only through secure servers.

d. The site should also have an e-mail response system for customer feedback.

3. A successful website has three characteristics: speed, speed, and speed.

a. A website should be easy to use, customized for specific market target groups, and compatible with different browsers.

b. If the company is targeting international markets, then translation and cultural adaptation need to be considered.

4. The website address should appear on all marketing materials.

D. Tracking Customer Information.

1. Electronic databases support personal marketing targeted at individual clients.

2. However, care must be taken to follow the laws protecting the privacy of individuals.

3. The U.S. government has generally maintained a policy of noninvolvement with Internet regulation, but the Federal Trade Commission has also pressed for new laws to protect minors.

E. Doing E-Commerce as an Entrepreneurial Company.

1. The decision to go online for the first time and develop an e-commerce site needs to be strategic one.

a. The products should be able to be delivered economically and conveniently.

b. The product has to be interesting for a large number of people, and the company must be ready to ship the product out of its geographical location.

c. Online operations have to bring significant cost reductions compared with brick-and-mortar operations.

d. The company must be able to economically draw customers to its website.

2. Conflict between traditional and online marketing channels can lead to a hostile, competing position of once partnering companies.