Management of Information Techniques
Executive Summary
E-business is the current normality in modern day business activities owing to advancements in technology. Firms have thus integrated their activities to the internet; the result has ignited competition in the various industries attributed by integration of ICT in business. E-commerce is currently ranked as among the most revenue generating sector. The aim of this report is to identify the role of using IT to generate competitive advantage of firms against one another. The report was drafted by using an example of the Amazon Company to identify the role of incorporating IT in the operations of a business.
The report also gives an in depth analysis of the suitability of e-commerce as well as the unsuitability based on the Amazon Company. It also offers the various types of e-commerce activities that a business can undertake. Based on the type of e-commerce activities, outlined as well are the type of e-commerce activities that the Amazon Company undertakes. The report gives recommendations to the unsuitability of e-commerce as much as it is a lucrative venture. The conclusion also gives remarks on the need by businesses as well as consumers to integrate and embrace e-commerce in selling and buying respectively.
Introduction
Amazon.com was founded on July 5, 1994 about 22 years ago by Jeff Bezos . Amazon.com is referred to as Amazon which is a firm within the internet industry. Amazon Company with a net worth of $331 billion is among the most successful e-commerce corporations in the present. Based in Seattle, Washington in the U.S, the Amazon company undertakings involve cloud computer programming, distribution of content, web hosting and electronic trading. The largest internet seller Amazon.com began by sale of books, it later diversified it’s trade to the sale of CDs, Blu-rays, DVDs, Video streams or downloads, video games, MP3 streams or downloads, furniture, jewelry, toys, food and audio book downloads or streams. The company has since expounded in the products it offers as follows; comixology, appstore, depository book, game studios, echo, woot, lab 126, twitch tv, instant video in UK and German, shop bop, aws, askville and myhabit.com (Linden, 2003).
Amazon company success can be used as an example to show for companies that use information systems to their advantage as well as to achieve success. Amazon Company having taken advantage of the environment situation it has revolutionized the field of commerce by integrating e-commerce in their trade. A consensus show that 7.4% of sales in retail in the U.S account to use of e-commerce in trading and with 10.7% of Americans population with a prime membership with the Amazon Company, business is steadily rife for the e-commerce giant. With records of up to $ 107 billion in terms of revenue in the year 2015 and an operating income of $ 2.233 billion; a net income of $ 596 million; total assets of $ 65.44 billion and total equity of $ 13.384 billion, use of information systems in business is the most lucrative enterprise in the current day as shown by the figures above depicting Amazon’s success (Mudambi, 2015)
Analysis
E-business refers to a range of activities carried out in business that involves sale of services and products on an online platform. This can simply be broken down into the selling and buying on the internet in which both parties have an electronic interaction only without physical or direct contact (Chaffey, 2007). Below are the different types of e-business activities under taken categorized according to their different characteristics;
Business to business (B2B)
Business to business model of e-business activity involves corporations carrying out their transactions electronically. This type of electronic business mainly takes place among traditional wholesalers and their producers. The business to business market has the following components e-markets and e-frastructure. E-frastructure consists of: Operational logistics such as distribution, warehousing and transportation; Deployment of service providers that offer management of software and hosting services from a centralized facility; Software that can manage the delivery and content of a website and outsourcing for functions in the e-business process. E-markets are the sites within the web where sellers and buyers interact to conduct business.
Business to consumer (B2C)
The business to consumer e-business activity is characteristic of establishment of business interactions between consumers and businesses. Business to consumer model involves the final customer acquiring information; buying of goods or services as well as receiving of the products bought over the internet domain. Common applications of the business to consumer e-business activity are in management of personal finance or investments through use of internet based tools of banking.
Consumer to consumer model of e-business activity corresponds to transactions of services or goods electronically that goes on between consumers. However, these transactions involve a third party this relates to the platform that offers for the transactions to take place between the consumers. It comes in three forms: auctions that take place over a portal that allows for bidding of items on auction online. Systems that allow for peer to peer interaction this may be in form of chat forums that allow for exchange of files and later models for exchange of cash. Classified advertisements present at portal sites where sellers and buyers interact and negotiate on a particular commodity. Consumer to consumer model transactions allow the consumer to take charge of the transactions, an example is where competing airlines offer travelers with offers on tickets and the best tours.
Consumer to Business (C2B)
In consumer to business model individuals avail their services or products available for purchase to companies that precisely require this type of goods or services. Practices involved in this model include where companies offer for designers to brand or come up with a logo of their company or their products and where only one designer is selected. Other platforms present with this type of business are those that design elements, sale of media, images and photographs without royalty charges.
Business to Government (B2G)
Business to Government transactions refer to operations that encompass public administrations and companies. It involves a wide variety of services and products this may include online procedures in licensing, operations related with the government and procurement through the public. In this type of e-business there are two features: the leading role that is undertaken by the public sector and the assumed need for the public sector to make the system of procurement effective. Web based procurements and purchases by the government help to account for the transparency of the government by reducing irregularities in the eye of public scrutiny.
Subscription
Subscription type of e-business allows their consumers to subscribe to their websites to access goods on sale, as well as to sell on their sites. It also offers for consumer interaction. Products may be in form of tangible goods or subscription to learning materials, mp3 music, videos or games. Subscription may be annually or monthly in order to have access to information, to purchase information or to as well sell information.
Vanity
In vanity e-business activity refers to promotion of an individual hobby or interest to earn revenue. An example is where blog sites allow adverts to be placed on their sites such that when people view their blogs they can as well view these advertisements from which they can generate revenue.
Consumer to Government
The consumer to government model encompasses all e-based transactions that are carried out between consumers and the government. Applications in the consumer e-business activity include: dissemination of education, through tax payments and returns. In health; this is through paying for health services, information pertaining illness and appointments. In social security’s; this is through making payments and information distribution. (Weill, 2013)
Applications of e-business to Amazon
Amazon undertakes the following types of e-business;
Business to business
Amazon acts as the e-market in this model this is by creating a platform through which a buyer and a consumer interact to carry out business, this is effected to members subscribed to their websites that allows for free interactions between sellers and buyers to transact business.
Business to consumer
Amazon also applies the business to consumer model by acting as the business by interacting with consumers to sell their products and to also avail the product on sale to the consumers through the internet.
Consumer to business
Amazon applies the consumer to business model by buying specific products from the consumers such as allowing a consumer to create a logo or brand their products
Subscription
Amazon also apply the subscription e-business activity by allowing access to information or services they offer to subscribed members only this help them to raise their revenue.
Vanity
Amazon allows bloggers to create their advertisements in their sites and in this way generate revenue through this e-business activity.
Suitability of e-business to Amazon Services
E-business activities make the services of Amazon fit for purpose in the following ways; the internet acts as a tool to market and as well to assist in consultations as well as the negotiation process, this is relevant where a potential customer may consult on the workability of a certain product this is necessitated by chat forums as provided by e-business. Online processing of the buying and selling process saving on time, e-business facilitates trade which involves selling and buying, money can be sent online and the delivery of a certain product also can be carried through the internet without physical contact. Administration services can be easily carried out effectively as the operations are carried out over the internet, which also makes it flexible as supervision can be carried out from anywhere without physical presence in the area of operation. Customer care services are also effective and online as e-business allows for real time interaction this also helps to offer quality services and products as well as improving the quality of data.
Unsuitability
E- Business may however be unsuitable to the operations of Amazon in the following ways; lack of laws and rules to regulate how e-business activities should be carried out either in a multi-national or national context. Lack of exposure of consumers to the e-business culture and thus some consumers have a myth of not trying out or consuming the products offered online. Security breaches and insecurity in the portals or sites that offer e-business activities by hackers, this tend to make e-business unsuitable as one can lose control over their portal or site through illegal entry and thus fraudulent activities can take place or lose of money. E-business also makes an entity strongly dependent on internet based operations which may be a disadvantage to a situation that requires for physical presence in order to carry out transactions. E-business may also be unsuitable where physical presence may be necessary this is for example in delivery or receiving of physical goods, this also shows that e-business activities are not fully independent and thus may depend on physical transactions.( MacGregor, 2008)
Conclusion
E-business is the current trend with changes in the environment there’s need for people to adapt to changes due to technological advancements. The globe scale will also be mitigated as it can now be easier to carry out business operations from the comfort of your home. Businesses as well as consumers should appreciate and as well advance their operations to e-commerce in order to broaden their areas of service and to as well enjoy benefits associated with e-commerce.
E-business as discussed earlier has a lot of suitability to its effect that would entice a business to engage in e-business activities. However there is needed to come up with solutions to the unsuitability of e-business to allow smooth operations. The following drawings can thus be implemented to act as solutions to the unsuitability stated; there is need to effect laws and regulations in e-commerce activities both multinationals as well as within a nation in order to regulate the operations of businesses. Need by governments to as well promote e-commerce and embrace it to mitigate the adverse culture of e-commerce to local consumers. Development of systems that have complex encryptions and securities, this is to avoid cyber crimes in order to curb online fraudulent activities that happen over the internet.
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