Ecommerce Strategy: Advantages and Disadvantages

This essay discusses the advantages and disadvantages of ecommerce strategy for contemporary business organizations to remain competitive in the market. It highlights the benefits of ecommerce such as increase in traffic of customers, offering larger product portfolio, and operating in foreign markets without added risks. It also discusses the challenges such as requirement of extensive infrastructure and targeting offline customers. The essay concludes that ecommerce will only help the business organizations in gaining competitive advantages in the market only when there will be proper integration between it and the traditional business model.

Running head: ECOMMERCE STRATEGY
Ecommerce strategy
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Introduction
In the current business scenario, it is important for the business organizations to be
competitive in order to survive in the market. This is due to the reason that in the current
business scenario, competition is increasing in leaps and bounds and it is becoming more
important for the business organizations to initiate different means in enhancing their
competitiveness. In the recent time, e-commerce is one of the major trends being followed by the
contemporary business organizations in gaining their competitive advantages. E-commerce refers
to the involvement of internet and different online services in marketing and selling the products
to the customers.
Thus, in order to determine the extent to which e-commerce can be used by the
contemporary business organizations, it is important to identify the major benefits and the
challenges for it. This essay will discuss about the different aspects of e-commerce and to what it
can be used in order to remain competitive.
Advantages of e-commerce
There are number of views being given by different authors in regards to the advantages
to be gained from initiating ecommerce. According to Niranjanamurthy, Kavyshree, Jagannath
and Chahar (2013), one of the major advantages that can be gained by the business organizations
from initiating e-commerce is increase in the traffic of customers. This is due to the reason that
e-commerce helps the business organizations in reaching out to more number of customers
without having the requirement of investing in brick and mortar stores. In addition, it is also
being stated by the authors that in the current global scenario, internet users are increasing at
rapid rate. Thus, the market potentiality in terms of targeted customers is increasing for the

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business organizations. As per the authors, initiation of ecommerce strategy will help the
business organizations to have more target customer segments compared to the traditional
marketing mechanism. The more will be the target customer segments, the more will be the
competitiveness for the organizations.
Apart from the advantage of higher probability of target customer segments, there are
some other sources for competitive advantages can also be gained by the business organizations
from the initiation of the ecommerce. According to Fauska, Kryvinska and Strauss (2013), one of
the major advantages to be gained by the business organizations from the initiation of
ecommerce is offering larger product portfolio to the customers. This can be made possible due
to the reason that with the help of ecommerce, online portal can be used to display the offerings.
However, on the hand, it is difficult for the business organizations to offer the entire portfolio
through their brick and mortar stores. In this article, the authors have given the example of
business to business concept where the seller and buyers will have effective meeting point
through the use of the online portal. Thus, according to the authors, if the business organizations
will have the advantage offering their entire product portfolio to their potential customers, then
they will gain more competitive advantages in the market.
In the recent time, one of the major business trends is international business and cross
border trading. Thus, in this case also, initiation of ecommerce will be beneficial for the business
due to the reason that initiation of the e-commerce will help the business organizations to offer
their products in the global market without having the physical presence in the foreign market.
According to Deng and Wang (2016), in the case of cross border business, business
organizations are having the requirement of taking higher risk and investment. However, with
the help of ecommerce mechanism, business organizations will have capital requirement and

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risk. Thus the business organizations will have more competitiveness in operating in the foreign
markets without having the added risks. In addition, the authors have also stated that initiation of
ecommerce will also enable the business organizations to change their business strategies in
accordance to the market trend. This is due to the reason that in case of the ecommerce, the
requirement for bulk stocking is less and thus it is easier for the business organizations to cope
up with the change in the market trend effectively.
Disadvantages of ecommerce
Apart from the advantages of ecommerce gained by the business organizations, there are
number of challenges also to be faced by the business organizations. According to Shah (2014),
one of the major challenges being faced by the business organizations especially the small
business organizations from the initiation of ecommerce is requirement of extensive
infrastructure. According to the authors, it may get difficult for the small business organizations
in investing and maintaining for having the infrastructure. The authors have also stated that there
is no assurance of getting succeeded with the help of ecommerce and this may cause reduction in
competitiveness of the business if they incur loss. Thus, it is concluded by the authors that
ecommerce should be initiated in accordance to the internal capability of the organizations. This
will ensure that they will gain competitive advantages from the initiation of ecommerce
mechanism.
Another major challenge for the ecommerce is being stated by Kaushal and Jain (2017).
According to them, in the current time though the market penetration for online services is high
and increasing but it is still in the nascent stage. The authors have also stated that there are still
large sections of the global population who are not having the internet facilities. Thus, with the

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initiation of the ecommerce strategies these sections cannot be targeted. Thus, according to the
authors, it is important for business organizations to first identify the target market segments
prior to the initiation of the ecommerce strategies.
Discussion
Thus, from the above analysis, there are number of advantages and disadvantages being
identified that will get emerged from the initiation of the ecommerce. It is identified that
initiation of the ecommerce strategy will pose both benefits and challenges for the business
organizations. Thus, it is important for the business organizations to initiate the ecommerce
strategy in accordance to the real world situation faced by them. It is important for the business
organizations to identify that whether the internet facilities are well available among their target
customer segments. If the majority of the target customers are having internet and online
facilities, then initiation of ecommerce will be successful. On the other hand, if the target
customer segment is majority of offline customers then the probability of getting success from
the initiation of ecommerce will be lower.
It is also being identified in the above sections that ecommerce helps in enhancing the
customer convenience. However, it is also to be noted that there are some limitations also being
identified for ecommerce over the traditional business concepts. One of these shortcomings is the
lack of touch and feels facility for the customers in the case of ecommerce. In this case, they will
get the access to the products after being delivered. There are number of consumer goods that are
having the requirement of touch and feel by the customers. Thus it is important for the business
organizations to determine where their offerings are having the need of touch and feel facilities
for the customers or not. Business organizations will only gain competitiveness in the market if

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the customers are given the facilities of both online convenience and traditional touch and feel
facilities. In the current time, there are number of customers mainly in the retail sector who
prefers to choose and select their products online and purchasing it from physical stores. Thus, it
is also important for the business organizations to initiate their ecommerce strategy as a
complementary and not as a substitute to the traditional business model. Business organizations
will only gain competitive advantages in the market when the customers will be able to gain the
benefits from both online and offline sources. It can also be stated that though ecommerce is the
recent trend in the current business scenario but it cannot be implemented as the substitute for the
traditional business model. It is also to be noted that business organizations will be able to gain
competitive advantages if the ecommerce facilities and strategies can be adopted in accordance
to the business sector. This is due to the reason that there are certain business sectors that can be
easily managed with the help of extensive process of ecommerce. On the other hand, there are
number of business sectors are having the requirement of more traditional business model.
Conclusion
Thus it can be concluded that initiation of ecommerce will surely help the business
organizations in competitive advantages but with considering certain factors. In this report, there
are number of these factors are being discussed and evaluated from different point of view. This
essay concludes that ecommerce will only help the business organizations in gaining competitive
advantages in the market only when there will be proper integration between it and the
traditional business model. The more effective will be the integration of both the business model,
the more probability will be for gaining competitive advantages.

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Reference
Deng, Z. and Wang, Z., 2016. Early-mover advantages at cross-border business-to-business e-
commerce portals. Journal of Business Research, 69(12), pp.6002-6011.
Fauska, P., Kryvinska, N. and Strauss, C., 2013. The role of e-commerce in B2B markets of
goods and services. International Journal of Services, Economics and Management, 5(1-2),
pp.41-71.
Kaushal, T. and Jain, J.K., 2017. Emerging Challenges of Global E-
Commerce. INTERNATIONAL JOURNAL, 2(3).
Niranjanamurthy, M., Kavyashree, N., Jagannath, S. and Chahar, D., 2013. Analysis of e-
commerce and m-commerce: advantages, limitations and security issues. International Journal
of Advanced Research in Computer and Communication Engineering, 2(6).
Shah, J.P., 2014. Role and Challenges in Cloud Computing and Ecommerce in
SME's. RESEARCH HUB–International Multidisciplinary Research Journal, 1(3).