The Impact of E-commerce on Modern Business and Marketing

Challenges of Strategic Information Systems

Implementing strategic systems often requires extensive organizational change and a transition from one sociotechnical level to another. Such changes are called strategic transitions and are often difficult and painful to achieve. Moreover, not all strategic systems are profitable, and they can be expensive to build. Many strategic information systems are easily copied by other firms, so that strategic advantage is not always sustainable.

Unique Features of E-commerce and Digital Markets

E-commerce involves digitally enabled commercial transactions between and among organizations and individuals. Unique features of e-commerce technology include:

• Ubiquity: Available everywhere, at all times.
• Global Reach: Transactions cross cultural and national boundaries.
• Universal Technology Standards: One set of technology standards for all nations.
• Richness: Supports video, audio, and text messages.
• Interactivity: Technology works through interaction with the user.
• Information Density: Reduces information costs and raises quality.
• Personalization and Customization: Allows for personalized messages to be delivered to individuals and groups.
• Social Technology: Enables user content generation and social networking.

Principal E-commerce Business and Revenue Models

E-commerce business models include e-tailers, transaction brokers, market creators, content providers, community providers, service providers, and portals. The principal e-commerce revenue models are advertising, sales, subscription, free/freemium, transaction fee, and affiliate.

How E-commerce Transformed Marketing

The internet provides marketers with new ways of identifying and communicating with millions of potential customers at costs far lower than traditional media. Crowdsourcing, utilizing the wisdom of crowds, helps companies learn from customers to improve product offerings and increase customer value. Behavioral targeting techniques increase the effectiveness of banner, rich media, and video ads. Social commerce uses social networks and social network sites to improve the targeting of products and services.

E-commerce's Impact on B2B Transactions

B2B e-commerce generates efficiencies by enabling companies to locate suppliers, solicit bids, place orders, and track shipments in transit electronically. Net marketplaces provide a single, digital marketplace for many buyers and sellers. Private industrial networks link a firm with its suppliers and other strategic business partners to develop highly efficient and responsive supply chains.

The Role and Applications of M-commerce

M-commerce is especially well-suited for location-based applications, such as finding local hotels and restaurants, monitoring local traffic and weather, and providing personalized location-based marketing. Mobile phones and handhelds are being used for mobile bill payment, banking, securities trading, transportation schedule updates, and downloads of digital content, such as music, games, and video clips. M-commerce requires wireless portals and special digital payment systems that can handle micropayments.