Five Strengths Of E-Commerce

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What is Ecommerce? Electronic commerce that is truncated prevalently as e-business is characterized as the purchasing and selling of products or services over electronic media like the Internet or other Information Technology dependent systems. E-commerce, in its initial period of business transactions, occurred in the late 1970s. Today, organizations have started to exchange business documentation electronically among them. Looking into history of E-commerce, the overall population was acquainted with the Internet in 1994, yet it took four more years to make the security protocols fundamental for a prepared Internet connection. By 2000, organizations in America and Western Europe were displaying their products and services on the web. This…show more content…
Michael E. Porter in his article How Competitive Forces Shape Strategy characterized these market forces for us. Porter's 5 strengths they comprise of: 1. The industry- it is such a force that is the struggling part for position among current competitors, this can consists of competitive price, introduction of a new product, advertising and promotional advancements, etc. 2. The threat of new entrants - the significance of the threat of entry depends on the barriers to entry into a particular industry and reaction from the companies that already exist in the market. There are 6 major barriers to entry. First barrier is economies of scale that is hard to achieve for new entrants. Second is product differentiation. Thirdly, capital requirement is a barrier. Fourth, cost disadvantages independent of size. Fifth, access to distribution channels is not easy and sixth barrier is government policies for new…show more content…
The business model include the internal workings of the business; this may add to the execution of a specific business strategy, however it constitutes one and only component. Remembering this when building up the model for a business is critical in the sense that it will help in the execution of a strategy that takes advantage of the business model, for example, an execution of effective product promotion. Also, it will help build up a business model that contributes to the business strategy, for example, the capacity to process customized orders. The one to be started first will depend fundamentally on the industry where the business exists, the competitive environment it works in and the competitive advantage that the business
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