Importance and Complexities of Online Business Environment

This report discusses the importance and complexities of the online business environment, including the impact of e-commerce, effective web design, and different revenue models. It also explores the role of technology in supply chain activities and payment systems.

E-BUSINESS AND E-
COMMERCE
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO1 Critical awareness of the importance and complexities of online business environment3
LO2 Develop sufficient understanding of how the internet technology, Electronic Data
Interchange (EDI) and Networks work for supply chain activities, transferee of funds and
payment systems and business management..........................................................................5
LO3 Different e-business models that can be used to generate revenue for a business.........6
LO4 Understanding and application of effective web design structure for e-business and e-
commerce...............................................................................................................................9
LO5 Impact of a well-designed website to an e-business....................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
This report revolves around importance of technologies in business operations and how
technologies are contributing in E-business operations. Current market scenario help in
understanding that technologies used by organisation for procurement of products and services,
supplies and transport, handling of goods and functioning of organisation. These days e-
commerce is one of the effective mode of business and various organisation are selling their
products to consumers by the help of internet. E-commerce is considered as effective mode of
buying and selling of products for consumer. This report help in understanding about importance
of online business environment and complexities involved in this type of business environment.
This report gives information about e-commerce and help in making understanding about e-
business (Hu and Haddud, 2020).
MAIN BODY
LO1 Critical awareness of the importance and complexities of online business environment
Current market trends shows that e-commerce is one of the effective mode of business for
organisation and it is considered as one of the efficienct mode for organisation in reaching out to
their consumers. E-commerce help consumer in analysing products and choosing best product
according to their need and preference. E-commerce also help organisation in selling their
products and generating high revenues for organisation which make positive impact on
productivity and profitability of organisation. Electronic commerce have made impact on social
and economic environment which made impact on business of organisation and also made
impact on business environment for organisation. Electronic commerce have changed
marketplace for business and it also made change in the ways business is conducted in market.
Electronic commerce contributed in introducing new products into market and also contributed
in development of new market and products. Electronic commerce helped in making effective
relationship among consumers and organisation which played vital role in organisation
productivity and profitability (KORČEK and et. al., 2018). Effective relationship with consumers
have helped organisation in increasing their market share and also assisted in growth and
development of organisation. There might be some changes needed in electronic commerce to
make it more effective as introduction of new channels and increase in interaction among
consumers and organisation have to make electronic commerce more flexible and adaptable.

Electronic commerce have contributed in development of local vendors and retailers which are
focusing on expanding their business and electronic commerce have provided them the platform
to reaching out to more consumer by providing them products according to their need and
preference.
Electronic commerce also affected economy of different nations as it boosted the changes
which are under progress in economy such as reform of regulations, establishment of links
between different businesses, globalisation of economic activity and demand of workers which
are highly skilled. Electronic commerce have made an effective impact in different sectors such
as electronic banking, booking for travelling etc. Electronic commerce have influenced online
transaction and different applications are used by consumers to complete their transaction with
help of internet (Kwilinski and et. al., 2019).
Electronic commerce have given advantage to small businesses as their products can be
reached to consumers without spending large amount on marketing and electronic commerce
provided advantage to small businesses by reaching out to large number of consumers. People
are also influenced by the effectiveness of electronic commerce as people can do their business
online and make any kind of transaction related to business and transactions can be made from
anywhere and at anytime.
Electronic commerce have also contributed in reducing time for organisation to reach out
to consumers by marketing or advertising as electronic commerce have made transactions fast
and made process effective and efficient. Electronic commerce have reduced time by speeding
up cycles of production and help organisation to prepare product according to consumer needs
and operates in close coordination with consumer which also help consumer in making
transactions around the clock. Change in time is affecting structure of business and social
activities which are making major impact on organisation and their business.
Electronic commerce may have made its impact on business positively but still there are
some issues which needs to be resolved during conducting a business as electronic commerce
have issues related with security of personal information and security of transaction. Government
policies have questioned efficiency of electronic commerce and electronic commerce have
important implications for consumer protection, tax collection and policies related with trade
(Lin and et. al., 2020).

LO2 Develop sufficient understanding of how the internet technology, Electronic Data
Interchange (EDI) and Networks work for supply chain activities, transferee of funds and
payment systems and business management
Internet is explained as system of interconnected computer networks globally which use
Standard Internet Protocol Suite to link several devices worldwide. It is a network of
various networks which have millions of business, academic, public and government networks
from local to global scenario. Internet have information of every type which belongs to high
range of information services and have access to various applications worldwide. Internet is
referred as global system of IP networks which are interconnected and people refers Internet and
world wide web but these terms are not similar as World wide web is one of the services of
Internet. Internet carries most of services which includes World wide web, electronic mail, file
sharing, e-transactions etc. E-commerce is possible by the help of internet as it help consumers in
understanding about different types of product and assist consumer in choosing best product for
them out of several other choices. Internet have made E-commerce efficient by providing option
of making transactions and delivering high quality experience of products for consumers
(Moriset, 2018).
Electronic Data Interchange is explained as exchange of business information from
computer to computer and exchange of information is done in form of electronic format among
business partners. Email, fax and post mail can be processed by the help of human but
documents which are processed by EDI move from sender computer to receiver computer
directly. EDI contributes in exchanging information related with business which includes
purchase orders, shipping details and billing of products etc. and EDI is used to process this type
of data. EDI is also considered effective and efficient because it saves time and cost included in
other processes and it is considered as environment friendly option (Samarasingha and Perera,
2020).
Every organisation network help in determining efficiency of supply chain and assist in
satisfying its customer. Developing an effective supply chain help in meeting the long-term
objectives of organisation which assist in growth and development of organisation. During
development of supply chain various steps are involved and organisation focuses on
implementing steps effectively such as:
 Defining business objectives

 Defining scope of project
 Form of analysis must be determined
 what tools will be used
 Completion of project
Effective implementation of these resources help in determining path and help organisation in
gaining benefits from implementing designed approach effectively.
E-commerce payment system help in providing electronic payment system for online
transactions. It does have subsystem which is explained as electronic data interchange. These
days electronic payment system are very effective as people use internet based shopping and
banking more. Credit cards are one of the effective mode of transaction related with E-
commerce. These days online merchants have complied with banks and other financial institutes
which provides credit and debit card to consumers (Sijabat, 2017). There are several companies
that specializes in financial transaction over Internet as Stripe for credit cards processing and
different other companies such as Smartpay which facilitates direct online bank payments and
Paypal is one of the alternative for making payments. Transfer of funds by use of internet
sometimes considered risky as it does have issues of security related with personal information,
passwords etc.
LO3 Different e-business models that can be used to generate revenue for a business
E-business models are used by e-commerce organisation in order to generate revenues and to sell
their products and services to consumer online. Revenue models include product and online
advertising, information sales, subscription services and transaction fees. There are five basic
models which are used to generate revenue for business are mentioned below:
 Advertising Revenue Model – This model focuses on advertising products and services
on platform which is usually used by consumer for shopping. This method is categorized
under Advertising revenue model as it focuses on using the huge traffic on websites and
by the help of ad getting redirected to actual site. This model help E-commerce
organisation in boosting their revenues and engaging consumers with products and
services provided by organisation. Payments for products and services are also made on
hosting platform which is based on fixed commission (Avinash and Babu, 2018).
Organisation which follows this structure generates their revenues by Cost per click, and

Cost per action. Google Adwords and Adsense is among one of the effective options for
placing the ads.
 Subscription Revenue Model – This type of services are based on providing subscription
to consumers and charging an particular amount for their services. Examples of this type
of model are Netflix, Amazon prime, YouTube premium etc. In this model services
which are offered by companies are videos, TV channels, magazines, music etc. There
are some examples of types of subscription included in this model which are mentioned
below:
1. Premium Membership – In this type companies focuses on providing premium services
and products to consumer. Information and updates regarding any products or services
delivered to premium members.
2. Content Services – In this type subscription is needed to access content of websites such
as Amazon prime, Netflix etc.
 Transaction fee revenue model – This model focuses on charging a fee to seller every
time transaction made by them. Companies which charge fees for every transaction made
by seller are companies that provide payment gateway services to E-commerce business
platforms. Operator provide platform for E-commerce market where transaction can be
made and completed (Labus and et. al., 2020). Important points under this model is to
register vendor and operator which help in keeping identities of both parties in case
required later for business. Paypal is one of the effective example of this model where
organisation charges a transaction fee to seller once transaction is completed. Amazon is
also considered as effective example of transaction fee revenue model. Sales Revenue model – This model is commonly used by retailer and wholesalers which
sell their product over internet as it help in reaching out to large number of consumers.
This model is effective for both seller and consumer as it save time and also convenient
for both parties. Prices which are offered by sellers are often competitive in comparison
to stores. Online sales model comes with marketplace which is considered as entry point
and help in dealing in various products which help vendors to expand their market and
generate more profits. Examples of this model can be taken such as Amazon, Otto etc.
which follows catalogue based business on internet. Companies which sells product over
internet to consumers by using online platform (Oh, Lai and Woo, 2019).

Quality, trust and security, the use of the internet for recruitment and building of internet
communities
Every organisation focuses on providing security to users which are using online
platforms to made their purchases and buying products for their needs and wants through online
platforms. Different security issues are raised with online shopping and continuous increase in
number of people which are using online website as an tool to make purchases. With the
increased number of users concerns about their security have raised and it does created doubt
among consumers which buys their products from different online websites. There are several
question which arises when it comes to security of users such as can websites be trusted and can
information of consumers transmitted safely etc. These are some questions which comes into
mind of people when they use online shopping to buy products. Trust is also one of the security
issue in making online transactions and doing online shopping (Soegoto and Eliana, 2018). It is
important for users to trust others which can help them in making transactions and help in
trusting online websites to make any kind of purchases. Every organisation have to make sure
that there should be quality in products and consumers can trust about the security of their
personal information and people safe when they are making transactions or purchasing any
product. For any online site it is important to understand consumer needs and provides
appropriate products according to consumer needs. Consumer may hesitate when making
transaction or buying any product and it consumer can only feel comfortable when security of
website should be effective and consumers can trust on organisation regarding their information.
It is important for organisation to create notion of trust with consumers which encourages them
to make purchase and make transactions. E-commerce industry size is getting bigger and bigger
as numerous consumers are engaging with online websites and making online transactions. Trust
is one of the biggest factor which is needed in every business as it help organisation in retaining
its consumers and it also help in boosting its revenues which contributes in maximization of
productivity and profitability of organisation. Trust between organisation and consumer can be
made by focusing on doing everything in public and without any barrier (Soegoto, Marbun and
Dicky, 2018).

LO4 Understanding and application of effective web design structure for e-business and e-
commerce
Effective web design for E-commerce is crucial to attract consumers as it help in
generating revenues and also assist in maximizing productivity and profitability. Website
designer focuses on making websites effective and efficient by putting in quick and easy process
of purchasing and make sure that experience of shopping should be good for consumer. There
are several points which are considered under effective web design features which are mentioned
below:
 Keep user in mind – E-commerce website should be designed by keeping in mind user
needs and preference as it help in making effective design for website. Product images,
contact etc. are some examples of making an website effective which attracts consumers
and also them in understanding about products. Website design is considered as first
impression on consumer and every website designer focuses on making user experience
effective.
 Simple design for website – Websites which have simple design are considered as most
effective and more visually appealing and trustworthy (Stanujkic and et. al., 2019).
Organisation focuses on making their websites simple and it is possible by taking away
any kind of unnecessary information. This is also considered as one of effective points
which help in converting potential consumers into buyers.
 Pricing – Products which are available at website should be clear and their prices should
be mentioned on website. Organisation have to make sure that information which is
available on website should be authentic and easily accessible by consumers. Consumer
shouldn't feel that they are being tricked by website information. Pricing and Shipping
cost for products should be available on website which help consumers in making their
decision regarding purchase of products (Tamilarasi, R. and Elamathi, N., 2017).
 Quality photos – Photos which are available on website should be effective by which
consumer can understand about products and quality photos also help in developing
image of products offered at website. Having high-resolution photos at website is
important as blurred photos can affect customers perception about product and consumer
may think that product is cheap. Effective images help consumer in understanding about
attributes of product which help consumer in making decision about product.

 Reviews and Testimonials – Consumer before buying any product read reviews of
consumer which have used that product previously. Positive reviews of consumer help
promoting products attributes and also help in boosting sales of product. Effective web
designs include review of consumer which are related to product specification and
product description.
 Product organisation – Effective web design includes keeping products organised into
specific categories which can help consumers in accessing products according to their
needs. It is easy to find products when they are organised according to categories. It also
help in narrowing product options for consumers.
 Search Bar – Having a search bar in website help consumers in finding any specific
product and also help consumers in finding their product without facing any problems. It
is quickest and effective way to find any product on website.
 Contact Information – Consumer queries and concern can be solved when there is contact
mentioned on the website as it help consumers in understanding about product and also
help consumer in resolving any queries about product (Wang, 2019). It is best to include
contact information at website as there are several options which can be used such as
email address, phone number, contact form, hours of operation etc.
LO5 Impact of a well-designed website to an e-business
Effective web design helps in maximizing productivity and profitability of organisation and also
assist in creating goodwill of organisation in market. Digital marketing have made huge impact
on effective design of website and tools of website design also evolved by the time. Well-
designed website is considered as key which helps in boosting growth of business and also help
reaching out to higher number of consumers. Well-designed website focuses on gaining attention
of consumers which are associated with organisation and which can help organisation in
boosting their revenues. Well-designed website should have images, videos and graphics which
helps in engaging consumers with organisation. It is been analysed that strategies which are
related with SEO and SMO have focused on promoting landing pages and it is important that site
landing pages have most effective web design (Rezaei, 2017). Well-designed website also help
in making impression on consumers and impression is the key to attract consumers towards
organisation. It is been analysed that if consumer have easy and smooth experience while
viewing website consumer is already satisfied by business of organisation. Effective web design

also focuses on making it fast and make sure that it should comprises of impressive features and
have suitable navigation for consumer which visits website. Website should present products and
services of organisation effectively as it will help consumers in understanding about attributes of
products and services, clear image of products help consumers in engaging with products of
organisation. Conversion of user into consumer is possible by filling out a form, purchasing and
signing up for newsletter of of the company. Effective web design also make impact on business
by consider higher ranking of site in different search engines, Increased visibility of site landing
pages, Effective utilisation of time at website, Improved conversion of user into consumers and
also boosting revenues of organisation. Well-designed website also assist in improving consumer
service by getting feedback and review of products which are sold organisation. Website is
considered as consumer representative which help in resolving consumer queries and issues
related with delivery of product. It will help consumers in understanding that organisation
focuses on welcoming new consumers and also help in engaging new consumers with website.
These days website are also considered as digital face of business and organisation. An updated
and effective website is effective and beneficial for organisation. Well-designed website also
help in creating trust among consumer and help in increasing market share of organisation
(Avinash and Babu, 2018).

CONCLUSION
This report concludes about effect of digital technologies on business of organisation and
how digital technologies have contributed in boosting organisation revenues and also contributed
in maximizing productivity and profitability of organisation. This report also concluded about
importance of e-commerce in current market scenario and how different organisations are using
e-commerce as effective platform to sell their products and how e-commerce have affected
business operations of organisation.

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