Ecommerce Analysis: Internal, External Factors and Business Strategies

This report provides a comprehensive analysis of electronic commerce (ecommerce), defining it as the buying and selling of products and services over the internet. It highlights key features such as ubiquity, global reach, and security. The report delves into the PESTEL theory, examining the political, economic, social, technological, environmental, and legal factors impacting ecommerce. It identifies major ecommerce companies like Amazon, eBay, and Alibaba, outlining the advantages, such as global marketing and revenue generation, and disadvantages, including lack of physical contact and system failures. The report discusses a current event from Forbes, emphasizing the growth and importance of ecommerce in business, its role in sales growth, and the significance of customer-centric portal design. Furthermore, it explores the internal (financial strength, technological infrastructure) and external (technological factors, customer preferences) environmental factors affecting ecommerce. The report concludes with a discussion of the questions surrounding the advantages, disadvantages, and contextual factors influencing ecommerce, supported by references to relevant academic literature.

ELECTRONIC COMMERCE

DEFINITION OF ECOMMERCE
• Flanagin et al. (2014) defines electronic commerce or
ecommerce as the process of buying and selling of products
over the internet. The term products here refers to both
goods and services which are available on the digital
platforms to customers.

FEATURES OF ECOMMERCE
• Ubiquity-Ecommerce portals facilitate buying and selling of
products on real time basis. The customers can payment on
placing orders and the companies receive the revenue.
• Global reach- The ecommerce market spreads all over the
world and facilitate customers to buy products from all the
world.
• Security-The ecommerce market is subject high level of
technological security in order to prevent or at least minimise
intrusion of hackers.

FEATURES OF ECOMMERCE CONTD…
• Universally maintained standards- Companies maintaining
ecommerce to market their goods maintain a universal
standards for their websites.
• Government control-The ecommerce markets are increasingly
controlled by the governments.

THEORY-PESTEL THEORY
• Political- Ecommerce markets comes under direct control of governments and
international bodies.
• Economic-Comes under influences of economic factors like currency exchange rates
and shipment conditions.
• Social-Dependent on social preferences to purchase products online.
• Technology-Dependent heavily on technological advancements.
• Environment- The gadgets on which ecommerce portals runs like tablets and smart
phones emit radiations which are detrimental to environment.
• Legal- The ecommerce markets comes under influences of laws like cyber laws.

TOP ECOMMERCE COMPANIES
• Amazon
• Ebay
• Alibaba

ADVANTAGES OF ECOMMERCE
• Ecommerce facilitates marketing of goods to companies
round the clock to global consumer base.
• Generates immense revenue for companies.
• Consumers can gain knowledge and order about a vast range
of products.

ADVANTAGES CONTD…
• Enables companies to diversify their risks faced in one
market over other markets.
• Provides substratum to companies to manage their financial
and market risks.
• Provides launch pads to companies to launch their products.

DISADVANTAGES OF ECOMMERCE
• Lack of actual contact between marketers of products and
consumers.
• Continuous upgradation places immense financial pressures
on companies.
• System failures disrupts the total process.
• Not protected from data theft and hacking.

CURRENT EVENT: DISCUSSION OF THE
EVENT
• The Forbes Magazine points out that points out the
current event of growth of ecommerce and its growing
importance in the business generation in business
organisations in the global market.
• The article goes on to mention that companies can use
ecommerce as a formidable tool to achieve sales growth and
generate more revenue, thus achieve growth in their
business.

CURRENT EVENT: DISCUSSION OF THE
EVENT CONTD..
• The article further mentions that the ecommerce market has achieved a
high rate of growth. For example, in the United States of America has
experienced a growth 16.4 percent and generated a revenue of $ 262.3
billion revenue (forbes.com, 2018).
• Ecommerce encompasses diverse systems ranging from supply chain
management, banking portals and after sales customer care services
which companies offer to their customers. Sisodia (2016) mention in this
context that ecommerce has emerged as a driver of the global economy.

CURRENT EVENT: DISCUSSION OF THE
EVENT CONTD..
• The article mentions that companies can target appropriate
appropriate customer bases using their ecommerce portals and
personalise the attributes of the portal according to their needs.
• For example, companies selling expensive electronic gadgets can
personalise their portals which would show their technological prowess.
• Similarly, manufacturers selling premium apparel can customise their
portals to showcase their creative aspect to attract customers (Bilgihan,
A., Kandampully, J., & Zhang, T.2016).