Essay: E-Commerce Management

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E-Commerce Management

Describe how e-markets are redefining organizations.

Electronic commerce is one of the strongest forces of the contemporaneous business community. Its emergence has generated a wide series of impacts on customers, organizations or other tertiary parties. In terms of academic research for instance, e-commerce has lead to increased numbers of studies linking technology to business; in terms of industry, it lead to intensifying levels of competition, and so on. An integrant part of e-commerce is the e-market, generically understood as the customer base to which products and services are electronically addressed. More simply put, e-markets represent the individuals who purchase online, or who could be persuaded to make their purchases online. The emergence of this concept of electronic market contributes significantly to a reshaping of the traditional organization.

On the one hand, the electronic market is not limited by temporal or geographic boundaries. This means that the organization will have to create a website which functions around the clock and responds to customer needs around the clock. This implies increased costs with the human resource. It could be possible to mention on the website that orders would only be processed between 9 to 5 time frames, but this could dissatisfy customers and not serve the purpose of an online store. From a geographical angle however, it means that the organization is now better able to enter new markets, address new customers and significantly increase its financial results.

Furthermore, it is not only possible to identify new customers, but also to identify new products. Electronic markets sustain communications between organizational and final buyers, meaning that they support organizational efforts in identifying new needs. This translates into an increased ability for the company to identify new needs within electronic markets and then satisfy these needs through the development of new products. This effort also increases the company's reputation, competitive position, strengths and financial results (E-Market Services).

In terms of the geographic location of the customer, the sales on the electronic markets force the economic agents to search for solutions to transport the items. Since the customer will not physically come to the physical store, purchase the desired product and carry it to his home, the vendor is forced to find a means by which the online ordered item would reach the destination mentioned by the buyer. This means that it will have to investigate several carrier businesses in order to identify the one which offers the best report between quality of services and price. It could be possible for the vendor to only offer free transportation within its home town, but this would once more generate customer dissatisfaction.

Another means in which e-markets contribute to the redefinition of the traditional organization refers to the spectrum of products and services commercialized within virtual environments. In this order of ideas, more and more companies have expanded their offer to also include complementary services. Probably the most relevant example in this sense is offered by the market of administrative services, where customers demand the integration of complementary services. For instance, online companies offering support to other companies are now requested to offer services of inventory management, financial consultancy or even supply chain planning (Simchi-Levi and Kaminsky, 2003).

Then, there is the feature according to which the electronic market forces organizations to operate in the field of business for consumers, rather than business for business (Doole and Lowe, 2008). This generally implies that the new organization has to change its perception of the client and no longer treat it as the force purchasing whatever it sells, but as the force demanding what the company should produce and sell. This increased power of the customer generates a major internal change, in the meaning of a greater role attributed to the marketing department, which, among other things, is also in charge of advertising and promotions, activities which are now handled online, through internet applications, and which target the representatives and members of the electronic market place. This also means that more resources are allocated to this division and the operational expenditures increase, but also that concomitantly, the company's chances to satisfy the customer and as such attain its goals are increased.

The electronic market changes the traditional organization also by facing it with more competition and increased demands. The electronic shopper has increased access to a wide offer of products and services, from which he can choose those that best serve his needs and wants. Given this greater access to information, it becomes clear that it is easier for a prospective buyer to decide in the detriment of a given vendor, if this vendor is less able to satisfy his needs than other retailers.

In this new context, the organization responds by better preparing itself for intensified competition. This brings about a series of processes of internal change, such as better communications with the customers, the integration of technological advancements, attention to human resource training or an increased attention to the quality of the products and services offered. Despite the fact that these modifications imply change, fact remains that they, as promoted by the electronic market, sustain the development and evolution of the traditional organization.

2) Define and discuss a supply chain.

The modern day business community is characterized, among other things, by an intense focus on the unification of all processes, from resource allocation, to manufacturing and distribution, in a means that improves customer satisfaction, product quality and organizational revenues. This approach to an integrated system represents the very core of the supply chain concept. The specialized literature relative to managerial issues is fairly conflicting relative to offering a definition. The conflicts revolve around the stand taken in terms of the offering of a definition in the meaning that some sources offer it, whilst others do not. The reasons as to why some sources do not offer a clear and cut definition of the supply chain vary from a belief that a defining endeavor is far too complex to a belief that the meaning of the concept is implied and beforehand understood by the readers.

Despite the stand taken relative to defining it, fact remains that there are some sources which offer some relevant approaches to a definition of supply chain. The following lines present these definitions, and offer some explanations considered most important by the authors:

Lawrence D. Fredendall and Ed Hill, quoting the APICS Dictionary (1995), present supply chain as either "the process from the initial raw material to the ultimate consumption of the finished product linking across supplier-user companies" or as "the functions within and outside a company that enable the value chain to make products and provide services to the consumer" (Fredendall and Hill, 2001).

The picture below is probably the most relevant graphic depiction of this dual understanding of the supply chain. On its horizontal axis, it reveals the broader meaning of supply chain as the overall process at industry level by which raw materials are transformed into final products. At this level, more economic agents are involved and each serves a specific purpose. The first link could for instance represent the organization collecting the natural resources, such as the cotton plants; the second organization could handle the transformation of the natural resources into raw materials, such as the cotton into cloth; the third economic agent could be in charge of manufacturing the cloths into apparel, whereas the final company could be in charge of distributing the clothes to the final users.

Source: Fredendall and Hill, 2001

A major benefit of the horizontal structure of the supply chain is its presentation as a cyclic system. Products not only reach the end consumer, but the residues and other remains are sent back to the vendor, who, alongside with the other members of the supply chain, are in charge of recycling or responsible dumping of the waste. This application sounds good in theory, but has yet to be fully implemented. Nevertheless, it is optimistic how Fredendall and Hill included the threat upon the environment and the need for recycling in their presentation of the supply chain.

Relative to the vertical structure (the one linked to the second economic agent), this reveals a supply chain at the internal organizational level, which generically includes the company's divisions in charge of ensuring that the raw materials are gradually transformed into finished goods and/or services and then shipped of to the next link of the broad system. Examples of such divisions include the marketing department (advertising and promoting the products / services and representing the means by which the company sells its items), the human resource department (training the staff members), the financial sector (ensuring the sufficiency of financial resources in the supply chain process) or the manufacturing division, which literally transforms the commodities into finished products.

After looking at numerous definitions forwarded by his predecessors, Jack B. ReVelle comes up with his own understanding of supply chain and presents it as "a dynamic network of interlinked organizations that converts natural resources into products or services that… [END OF PREVIEW]

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