To What Extent Is An E Commerce Strategy The Best Way For Businesses To Increase Their Profits? (40 Marks)

1432 words - 6 pages

To what extent is an e-commerce strategy the best way for businesses to increase their profits? (40 marks)

E-commerce is the online transaction of goods and services, which has completely revolutionized business and the way in which businesses can operate. It’s now easier for customers to compare prices/products with a little time spent browsing the Internet opposed to dragging themselves to the stores. This means that e-commerce is having an impact on what and how much businesses sell, therefore influencing the profits the business gets. In this essay I will consider whether an e-commerce strategy is the best way for a business to increase their profits, or whether e-commerce is not the ...view middle of the document...

g. Amazon). The new website was highly successful and ‘saw HMV return to profit’ (The Telegraph). This shows how an e-commerce strategy is the best way for a business to increase their profits as it illustrates how e-commerce can bring a business from administration to planning to expand into 10 new markets due to increased profits.
Despite this, e-commerce doesn’t guarantee a business profit increases, as instead it can pose severe threats. One such threat is the risk of cyber attacks. A cyber attack is an attempt by hackers to damage or destroy a computer network or system. If a business falls vulnerable to one of these attacks it can severely damage their reputation. This reputation damage can lead to a loss of trust in the company by customers, as they will potentially have personal details such as bank cards/addresses accessed. This loss of trust will decrease brand loyalty and so the business will lose customers to competitors meaning lower sales and so decreased profits. Talk Talk shows a very recent case of a cyber attack. In October 2015 Talk Talk found themselves exposed to a cyber attack. Around 4% of the companies 4 million users were affected by the events. With More than 15,600 bank account numbers and sort codes were stolen, the company said. The scandal resulted in a £35 million pound loss for the company. This points shows how e-commerce can provide huge threats to companies despite the number of opportunities it provides too. These big risks that come alongside e-commerce mean that e-commerce is not necessarily the best way for businesses to increase their profits as one bad event for the company can lead to huge losses.

However, e-commerce is allows businesses to reduce the intermediaries in the distribution process and sell directly to consumers. This is because the products are not moved from manufacturers to distributors to physical stores then the consumer. E-commerce cuts out the need for the physical store and so saves transportation costs. This process is called disintermediation. Disintermediation allows greater efficiency and reduced costs, which due to reducing the number of transactions and processes involved. The business is therefore left with an option to either reduce the price of their products, which may lead to more consumers buying the product (PED), potentially allowing an increase in profit. However they could maintain their selling price. This will allow them to increase their profit margin and so potentially increase profit. Dell used e-commerce to apply a disintermediation strategy into his business model in the early 2000’s. As a result of the venture into e-commerce the business increased their sales to $4 million a day. This combined with the money saved through cutting out the middleman resulted allowed Dell to increase their profits. This point shows how e-commerce provides numerous opportunities to businesses to allow them to make processes easier, lower costs and therefore create bigger...

Other Papers Like To What Extent Is an E-Commerce Strategy the Best Way for Businesses to Increase Their Profits? (40 Marks)

‘The mass media do not control their consumers; the consumers control the media.’ To what extent do sociological arguments and evidence support this view of the mass media today? (33 marks)

1062 words - 5 pages ‘The mass media do not control their consumers; the consumers control the media.’ To what extent do sociological arguments and evidence support this view of the mass media today? (33 marks) When looking at ownership and control of the media it is useful to study developments and trends in this context. There has been an increased concentration of ownership into a few transnational corporations. Media companies have also become

To What Extent Is It True That the Amount of Profits Earned by a Business, in an Economic Downturn, Depend Upon the Industry in Which It Operates?

1389 words - 6 pages managed a $0.16 billion increase in sales according to a news story published on July 22nd 2009. This shows that even though there was a strong recession and it was only the second quarter in 2009 and the recession was coming to an end they still managed to battle on through increasing their market share and also managing a rise in profits. This shows that it does matter which market you are in but, to contradict myself here, in a story posted

To What Extent Can Improvements in Productive Flow and Product Quality Lead to an Increase in Sales and Profit?

1430 words - 6 pages To what extent can improvements in productive flow and product quality lead to an increase in sales and profit? Introduction Both of the sales and profit are the most crucial factors in the operating of a business. High sales and profits help the business to keep operating so that is the reason why businesses are continually seeking methods to increase the sales volume and profits. Sales volume depends on a variety of factors such as the

Discuss The Extent To Which All Businesses And All Business Activity Is The Same

1119 words - 5 pages and manufacturing fits into secondary industry. Tertiary section is more of a service sections which concludes transport, banking, teaching, nursing and police. It all sums up what the company provides into these three industries.In the end, all business operations can be reduced to three words: people, product and profits. That is what a business is on the surface but when looking into any business one will see that no single decision is clear. There is a Chinese proverb which states, "To open a shop is easy, to keep it open is an art". Every business tries their best to keep that 'shop' open.Bibliography:Business Studies Book AS/A2 levels

Reading Is the Best Way for Student

2258 words - 10 pages bad habits. To provide background knowledge, the easiest way is to introduce students to the text directly to the title, author or article in the relevant background knowledge. Should pay attention to introduce appropriate to introduce the students to think for too long will make dull; introduced the topic would get pulled away from the more distant would not achieve any effect. Introduction should be brief and concise, both aroused their

To What Extent Is Security a Necessary Precondition for Development?

3117 words - 13 pages To what extent is security a necessary precondition for development? Introduction It is put forward that security is not necessarily a precondition for development, but rather, both concepts of security and development are inextricably linked. With neither one being predominant over the other; rather the influence of both oscillate, dependent upon the individual circumstances within the State or region. In essence, what this answer

To What Extent Is Inflation Damaging to the Economy? 18

1048 words - 5 pages banks low interest rates, they therefore move their money around to find the best was to increase the value of their money, this involves a lot of time, this time could otherwise be spent increasing output and is therefore a major problem of inflation. ‘Wage spiral’ is another consequence of inflation, this is when prices rise and workers then demand a rise in pay, the firms then agree but the raise prices again to compensate for the rise in costs

To What Extent Is Friar Laurence Responsible for the Deaths of Romeo and Juliet?

1095 words - 5 pages treats Bruno not being sensitive to his needs and feelings. That is one example on the way the chapters explain the negativity of the chapter and it works with most of the headings in the book that is what I have noticed from John Boyle also trying to get across with a couple of words gives you a brief summary of what lies ahead for Bruno and the family, it makes the reader excited. I think that is one way of narrative structure, tone

Evaluate the Usefulness of Labelling Theory to Our Understanding of Crime and Deviance (40 Marks)

1340 words - 6 pages Evaluate the usefulness of labelling theory to our understanding of crime and deviance (40 marks) Synopticity – Crime & Deviance and Theory Labelling theorists such as Becker and Lemert argue that because of the diversity of different values in society, there can never be a universally agreed definition of what constitutes ‘normal’ or ‘deviant behaviour’. What is deviant for one person may not be deviant for another. Labelling theorists

Best Way to Study

3071 words - 13 pages good news, and the good news is indeed promising! An efficient classroom teacher will tend to teach in many different ways in order to reach all of her/his students. Teaching something only one way (such as lecturing to one's auditory learning channel) will miss all the students who do not learn best in that manner. Simply put for this web comment, good teaching is teaching through a variety of learning channels. Most students can learn the same

The Best Way to Manage People

1108 words - 5 pages attitudes of people towards their particular organisation and to analyse the ‘health’ of an organisations cultural climate. However a problem with this study undertaken was that it was hard to measure and interpret information gathered and in a diverse cultural society would be hard for managers to establish a single way of doing so in terms of management. What issues does a manager of groups and teams need to consider? As discussed above, a

Related Essays

To What Extent Is Targeting Emerging Markets For Sales The Best Way For Businesses To Achieve Major Growth In Their Profits?

579 words - 3 pages growth in profits, as they create loyalty, therefore becoming an integral part of that market, increasing sales in the long term. However, this depends upon external factors such as the state of the market and the ay the business handles this. If the business manages these well, they can succeed in an emerging market, if they do not they could fail. But overall, it is the best way to achieve major growth in a businesses profits.

To What Extent Is It Inevitable That Businesses That Fail To Invest In E Commerce Will Lose Market Share To Competitors That Do Invest? (40 Marks)

951 words - 4 pages To what extent is it inevitable that businesses that fail to invest in e-commerce will lose market share to competitors that do invest? (40 marks) In this essay I will be discussing the extent to which businesses that do not invest in e-commerce lose market share to competitors that do invest. E-commerce is the trading of business online rather than through physical stores. There are several businesses that trade solely online. For example

To What Extent Do Urban Areas Create Their Own Climate (40 Marks)

955 words - 4 pages To what extent do urban areas create their own climate (40 Marks) An urban area is the region surrounding a city. Jobs are those in a non-agricultural field, making urban areas very developed causing a high density of human structures such as houses, buildings, and transport links. Urban areas contain microclimates which measures the average weather condition in a small area. Due to human activity, temperature in an urban area is a

With Reference To Your Own Research And The Item Above, To What Extent Do You Think That Targeting Emerging Markets Such As China Is The Best Way For Businesses To Achieve Profit Growth?

1422 words - 6 pages – With reference to your own research and the item above, to what extent do you think that targeting emerging markets such as China is the best way for businesses to achieve profit growth? An emerging market is a market which is experiencing rapid growth and becoming highly profitable which becomes open to many businesses to enter. Achieving profit in China can be achieved through many ways by increasing revenue through changing the way the