Ecommerce Strategy: Advantages and Disadvantages

Running head: ECOMMERCE STRATEGY
Ecommerce strategy
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1ECOMMERCE STRATEGY
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

2ECOMMERCE STRATEGY
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