E-commerce is the conducting of business electronically using a communication link. It provides exchange of goods and services by use of electronic means, especially the World Wide Web and other computer network (Coupey 2004). Acquiring e-commerce system enhances the way business is carried out. In light of this, by acquiring e-commerce, businesses and other organizations can realize the following benefits:
- Decreased transaction costs. Through implementing an e-commerce system, the costs incurred in trading goods or services can be reduced. It is easy for a company to decrease the following costs: search and information costs, negotiating and assessment costs, policing and enforcement costs. For instance, advertising a company’s products and services through the internet enables it to reach many customers therefore enhancing the product awareness.
- Disintermediation. Through the e-commerce, a business institution can be able to reach its consumers directly because the internet spans the world. In this case, intermediaries such as suppliers, distributors and retailers are reduced hence an easy management of supply chain (Gascoyne and Ozcubukcu 1997, p. 87).
- Decreased use of cash. Handling cash posses a threat to may business organization. But through online marketing, a firm can be able to implement electronic methods of money transfer. For instance, most supermarkets have implemented the use of credit cards for customers purchasing products online.
- Speed. Electronic communications facilitates quick delivery of data from the source to destination. Since electronic messages are instantaneous, a customer may not wait for long in order to get the order details by post.
- 24*7 Operation. E-commerce systems have the capability of operating daily at any time. A company’s physical stores or markets do not need to be open daily for the consumers and suppliers to engage in electronic business.
- Enhances telecommuting. Employess and other staff can be able to work away from their workplaces. This is enhanced through the advent intranets and the Virtual Private Networks (VPN).
Viral campaign or viral marketing are email campaigns that encourage recipients of advertising emails to forward the emails to their friends especially through a social network. This is a quick way of generating a large amount of buzz and brand awareness independent of the mode of message transmission; either online or offline (Coupey 2004). This type of promotion may be executed in the form of ebooks, online videos, interactive ad games, images or even text messages.
Viral campaign enables marketing managers who are willing to establish a sustainable viral advertising program to realize the objective of identifying persons with high potential of social networking and therefore formulating viral messages that appeal to this group of individuals. In such scenario, the product or service being advertised has a high probability of penetrating the market (Coupey 2004).
According to Wells (2009, p. 1) the key features of viral campaign include the following: Firstly, a company need to present the information in such a way that it is easy for the target recipients to understand and convey it along so it can spread; a good example is the Burger King’s viral campaign which is easy to understand. Secondly, the viral marketing campaign should posses some user interaction options. This improves the user familiarity to the product and thus enhances the spread of the content.
Thirdly, new or fresh ideas should be incorporated in this strategy. Since most consumers are interested in new approaches in their buying behavior, the viral campaign should be unique in itself. And fourthly, a company should be able to spread the buzz. This can be through incorporating a link that makes it easy for users to email the information to their friend or download the content in a usable format.
However, viral campaigns does not only depend on social media, which presents reliable new tools and techniques, but also assimilation with offline marketing, from street team and local advertising, to classified ad, TV, radio and print. There are also laws that govern the information content that is distributed over the internet; users’ privacy and correctness of the content.
Competitive advantage and the internet
Companies frequently incorporate innovations to attain competitive advantages. One of such innovation is the use of internet. According to Porter (1985), competitive forces model and value chain model are used to describe how the organization can formulate its strategies for competitive advantage. Competitive forces include “the bargaining influence of buyers and suppliers, threats of alternate products and new participants”. And on the other hand, the competitive strategies include cost control, differentiation, originality, growth and coalition. Therefore in the value chain model, the internet can be used by a company to obtain the competitive advantage in the following ways:
- Managers can use e-mail and other internet communication capabilities to oversee larger number of employees, to manage many tasks and subtasks in projects, and to coordinate the work of multiple teams in different parts of the world.
- The internet can alter the current distribution channels, creating openings for drawing and serving customers who otherwise would not patronize the company. For instance, web-based discount brokerages have drawn new clients who could not afford paying high fees charged by usual brokerage firms.
- For e-commerce, the internet offers businesses an even easier way to link with other businesses and individuals at very low cost hence improving alliances. For example, Cisco Systems sell switches and routers through telecommunications network in the Business to Business (B2B) space. Cisco has been a leader in utilizing the direct sell model over the internet (Haag, Cummings and McCubbrey 2002, p. 245).
- Internet cuts transaction costs of searching buyers and sellers, gathering information on products, bargaining, writing and enforcing contracts, and transforming merchandise. A company can be able to lower its market cost for products and services, hence gaining a competitive advantage.
- Through Automated Just-in-Time warehousing, the internet or rather intranet can be used in coordinating the flow of information between inventory system and controllers, making warehousing information more accessible to different parts of the organization, hence increasing precision and lowering costs.
In this light, businesses can counter the pressure of competitive forces by implementing a good internet infrastructure.
Internet and Traditional media
Commercial communications involves advertising and all other types of promotion of products and services. The media used for this task are the internet and traditional media, which include commercial television, radio, talkback radio, magazines and newspapers. Undoubtedly, the internet is the most visible, rapidly changing, dynamic, mind-bogging, and exciting emerging technology (Coupey 2004). Business world and individuals are exploiting the internet in order to meet their objectives in commercial communications.
Therefore, the internet differs from traditional media in a number of ways. Firstly, the internet is cheaper than the traditional media in information transfer. Internet knowledge is assisting firms to radically reduce transaction costs, which include the cost of transporting merchandise and collecting product information. As compared to other media such as TVs and newspapers, the information on buyers, sellers, and prices for many products is immediately available on the web at a reduced cost. Secondly, internet holds multimedia content as compared to traditional media like newspapers which rely only on images and texts. Thus, information based products, such as software, music, and video can actually be physically disseminated over the internet. Vendors of other types of products and services use internet to distribute the information surrounding their waves, such as product pricing, options, availability, and delivery time; this multi content capability is rarely experienced through traditional media.
Thirdly, the internet is a global network of networks which spans the world. On the other hand, most conventional communication media such as newspapers and radios cover regional commercial news and therefore, the information confined to an area. Through the internet a company can be able to create its product and services awareness by creating an interactive e-commerce system. This raises another difference, in that the traditional media are not interactive at all; sometimes making calls to TV or radio stations are costly. Consequently, the internet runs for 24*7*365; making the commercial information available to the audience around the globe at their convenient time.
Fourthly, on the issue of privacy; internet is susceptible to security risks as compared to traditional media. The web capability to study and target customers can demoralize individual privacy. Using website monitoring software and other technology for tracking web visitors, companies can gather detailed information about individuals without their knowledge (Haag, Cummings and McCubbrey 2002, p. 217).
Internet and Strategic Planning
Strategic planning is the organizational planning based on mission, goals and strategies. This is facilitated by the top management for strategic reasons which are implemented to form a sustainable competitive gain. According to Alberta (5) the Core Business Model can be used by companies to build up a good strategic plan in relation to the internet economy. The following are the requirements for each step.
- Understanding customer needs. By creating interactive web pages, accompany can be able to obtain customers feedbacks relevant to their requirements.
- Products and services acquisition. Through online procurement system a company can be able to benefit from volume purchases and to get the most ideal deals available; this is because of the internet capability.
- Sell products and services. Since the internet runs daily, a company can be able to increase its sales by offering after sales services to its customers.
- Deliver products and services. By using the internet, customers can place order and confirm delivery in a more appropriate manner.
- Collect money. A company should choose an appropriate method of online payment; credit cards or micro payments.
- Provide after sales support. For business sustainability, customer support is vital. Customer support may include solving problems and offering discounts and bonuses.
Therefore, internet is seen as a great technology for enhancing the company’s competitive advantage through proper strategic decision making.
Alberta efuturecentre, Strategic Planning, The Business Link, 2009, Web.
Coupey, E 2004, Digital Business: Concepts and Strategies, 2nd Ed., Prentice Hall, New Jersey.
Gascoyne, J & Ozcubukcu, K 1997, Corporate Internet Planning Guide, Van Nostrand Reinhold Company, New York.
Haag, S, Cummings, M & McCubbrey, D 2002, Management Information Systems, 3rd Ed., McGraw-Hill, New York.
Porter, M 1985, Competitive Advantage: Creating and Sustaining Superior Performance, Free Press, New York.
Wells, T 2009, Important Elements of a Viral Marketing Campaign, Website Marketing, Web.