Provide an Assessment of the opportunities and challenges afforded by

  e-business from a business perspective 

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Provide an Assessment of the opportunities and challenges afforded by e-business from a business perspective

E-business and associated technologies continue to have a major impact on the way organisations conduct business. The Internet and new technologies have transformed commerce and allow traders and consumers to transact irrespective of time, place and device. This new commerce also presents new challenges, because traders now need another set of expertise and tools, and often opt for partner solutions such as online marketplaces.

The eBay marketplace is an example of how the internet and technology lower trade costs for merchants of all sizes, by enabling them to connect, find a match, establish trust, transact and pay. We can see how these lower trade costs also lead to traders expanding their operations to foreign countries. European Union cross-border trade via the eBay marketplace has grown six times faster than offline cross-border trade for the period 2004 to 2010. Moreover, lower trade costs translate to consumer welfare gains.

The lower online trade costs stem from, amongst other things, the way in which the Internet and technology can help establish trust between trading partners and between buyers and sellers. This is done by facilitating communication throughout the transaction process and providing transparent, interactive ways of displaying and sharing information between parties.

The mobile device is fast becoming perhaps the most important channel empowering both merchants and consumers. Retailers whether large or small need to embrace this evolution in order to stay relevant in today’s commerce landscape. We also see the emergence of a consumer, using his or her mobile phone to research and purchase products, as well as to receive advertising and promotional messages.

The uptake of mobile technologies is causing a change in the dynamics of commerce. There is a shift away from the traditional retail store and towards the consumer who is empowered by their smart phone and who can purchase items any place, anywhere and at any time.

The adoption of e-business can be considered from two different perspectives, namely the threat perspective and the opportunity perspective. The opportunity refers to the situation of adopting new business initiatives such as internet technologies, making it possible to achieve advancement to overall business. Business threat refers to how businesses or new market’s entrants will ultimately fail if they do not go for e-business competitively. They will have to invest in e-usiness to offer services to customers who have come to expect from them.

The exponential growth and rapid changes of e-business technologies bring both new opportunities and challenges to businesses. The market has forced companies to focus once again, on the basics of cost, quality and profitability. This presents unique challenges (and opportunities) with conducting commerce via the Internet.  The business model should enable the cost, quality and profitability necessities, while utilising a long-term profit-based business plan, and simultaneously accommodating the unique business issues associated with e-commerce.  

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