Archive for November, 2008
Production organization of a vertically integrated corporation stood upon standardization. Production of apiece products with variegated quality, chosen often by the buyer herself, demands that the entire chain of logistics and the supply chains get linked to the electronic commerce platform and that the stages in production are increased immensely and at each step of production each apiece product contains unique information. This has resulted in enrichment of information and subsequent differentiation of previously Read the rest of this entry »
Evidences of re-intermediation are in plenty. There are, however, other related changes in the market, such as in the emergence of a novel framework of liability (Valimaki & Martikainen, 2001), or the emergence of new relationships between the wholesaler and the retailer (Nettesine & Rudi, 2000), or in offerings of greatly dispersed prices (Pan, Ratchford & Shankar, 2001). Several databased searches and research on price offerings on the electronic commerce have shown that prices offered on Internet are often not lower
than other modes of retail sales. Internet pricing has shown personalized effects based on quality Read the rest of this entry »
Sarkar et al. (1995) indicated that Ecom necessarily engenders mediation in the following areas of search and evaluation, needs assessment and product matching, customer risk management, product distribution, product information dissemination, purchase influence, provision of customer information, producer risk management, and transaction economies of scale and for integration of customer and producer needs. This detailed listing appears to cover the three modes described by Schmitz (2000). Meck (2001), for example, Read the rest of this entry »
Issues have been conflated here, however. Accounting costs have wrongly been assumed to represent the costs of transaction. TCE argues (Williamson, 1975) that transaction costs arise because parties in an exchange behave opportunistically. The cost necessary to overcome opportunism or in other words, costs borne to protect property rights when an opportunistic exchange partner is faced (Barzel, 1989) is known
as the transaction cost. It follows that in Ecom where parties may not transact repeatedly or do not have trust such transactions costs will rise instead of disappear. Coase’s (1990) theorem shows that formation of Read the rest of this entry »
Ecom and the diffusion of information technology, in general, have been believed to contribute to transformation of value chains internal to a firm and to an industry (Porter, 1985). Such a value chain recognizes the vertical dimension and refers to an industry segment. It was argued (Malone, Yates & Benjamin, 1987) that consequent to transformation of inter-linkages there would be dis-intermediation or the shortening of the circuit in the market. A comparison between the two modes of reaching customers Read the rest of this entry »
Ecom is an innovation in trade and linkages in an economy and we would argue that it substitutes the previous intermediary-based value chain by a new coordination across several value chains and specifically along the scope dimension (North, 1989). It appears that this commerce ushers the economy to a new institutional mooring. This innovative coordination is afforded by generation of new and novel cybermediaries (Sarkar, Butler & Steinfeld, 1995). Further, Ecom brings in several layers of possible Read the rest of this entry »
It is commonly believed that electronic commerce (Ecom) reduces intermediation and the time in a business circuit. Several authors have argued that dis-intermediation resulting from the use of Ecom increases economic efficiency and reallocates resources better. Alternatively, transactions cost economics (TCE) theorists argue that electronic commerce decreases transactions cost by way of reducing the distance between the producers and the customers. Proponents of increasing economic efficiency through Read the rest of this entry »
From a theoretical perspective, small business and rural enterprises can benefit greatly with e-commerce as they gain access to more customers (even globally) and can even compete with large businesses since e-commerce is a “level playing field.” Since SMEs are known for greater internal efficiencies, they may have an advantage over large businesses. However, recent studies indicate that the adoption of e-commerce by small business (as either a buyer or supplier in B2B and/or B2C environments) has not been as rapid as would be anticipated. Reasons cited for this include the cost, technology hurdles, and lack of expertise. Read the rest of this entry »
Electronic commerce is widely expected to improve efficiency due to reduced transaction and search costs, increased competition and more streamlined business processes. Lower search costs may also lead to Internet consumers being more sensitive to price changes. By reducing search costs and increasing the flow of information, e-commerce might effectively shift power from producers to consumers and make it harder for firms to maintain higher prices (Bakos, 1997). However, empirical evidence does not support this claim Read the rest of this entry »
Internet-driven e-commerce will have a significant impact on the competitive environment of commerce. Because in e-commerce the entry cost is low, and transaction costs are lower, it allows small entrepreneurs to enter the marketplace easily. On the other hand, e-commerce especially facilitates enterprises whose success depends on network effects—“winner-takes-all” situations for companies with significant market share—which further facilitate their growth and market dominance. This effect may create problems for Read the rest of this entry »