Benefits of an online business presence Essay

In this task I am going to explain the developments in internet technology, describe the benefits of an online presence and give examples of businesses that enjoy these benefits and finally explain the advantages of to businesses of having an online presence rather than having a purely offline presence. Broadband and other developments Nowadays, broadband connections enable data to be transferred much faster than narrowband. The connection does not tie up a normal phone line. The user can choose get online by an ADSL connection, a cable line, wireless or via satellite dish. Also the internet is low cost and is increasing in speed which benefits the commerce online. The new portable devices such as PDA offer the user easy internet access at any time. 80% of the UK can get broadband by ADSL and cable. Most of people use internet every day which enables a great share of data. Secure payments The increase of security enables the use of credit/debit card facilities. But the newspapers and magazine headlines about fraud and hackers quite obviously put people off. To be secured, all the online payments need to be private and confidential between the buyer and the seller, conveyed intact and without any changes during transmission and erased from the system after the process has been completed. The banks are increasing the security of the debit/credit cards of the user. To purchase an item online the user need to key in the password and the date of birth. Secure Electronic Transaction (SET) is a standard protocol for securing credit card transactions over insecure networks, the Internet. SET is not itself a payment system, but rather a set of security protocols and formats that enables users to employ the existing credit card payment infrastructure on an open network in a secure fashion. When the cardholder buys online the credit card company authenticates the card via digital signature. This proves that the cardholder is genuine. Web authoring tools Nowadays there are a number of web authoring tools such as the Microsoft FrontPage program which enables the user to create a website without any specialist knowledge. There are other programs such as the Dreamweaver, Fireworks and Flash technology used to create the effects and designs in a website. Businesses can easily build their website, which enables them to create a service online. Benefits of an online presence A web business presence have global â€Å"round† visibility which means they never close and are available from any location in the world at 24 hours 7 days a week. This benefit can increase the opportunity of trading of the website. Some examples of websites that enjoy this benefit are www.sainsburys. co. uk, www. amazon. co. uk and www. argos. co. uk. Some businesses operating online have opportunity of expansion to access to a wide range of customers especially from abroad. If the business offers an excellent service the opportunity is maximised. But there are worries for example the tariff barriers, quotas and environmental regulations. This is not a problem in the European Community as the goods can be freely traded between member states. Some websites that enjoy this benefit are www. ebay. com, www. hp. com, www. dell. com. A Small business with a good service and well designed can compete with larger businesses. There is an equality of presence regardless of size of business. The costumer never looks on the size of the business only on the service and product provided. Therefore a small business can compete with a larger one. Some websites that enjoy this benefit are www. zonepoint. co. uk and www. computeradvicecentre. com. A web business presence has the benefit of a rapid response to customer interest. But some firms don’t take advantage of this benefit. A web can provide several opportunities for customer contact for example the email messages. The speed of response is very important. A response over the internet is faster than the response by phone or letter. An online business presence enjoying this benefit is www. ebuyer. com. A web business presence has the opportunity to analyse online competition. It is quicker and easier to compare competitor activities online than by visiting their stores or obtaining information offline. Also the internet enables businesses to check new competitors and their market share. Businesses operating online have opportunity to keep up with customers. Businesses can check competitor’s status and then they can improve the product or service offered, speed of the delivery or the design of the website. The internet has made the life much easier. Achieving a responsive integrated supply chain A supply chain contains every single business that is involved in the eventual supply of a product or service. But there are problems associated with the supply chain. If the chain is long the price to the customer may be high and the chain is usually slow to respond to a rapid change. To combat these problems businesses tried to change the supply chain to shorten it, this is done by cutting out or by passing as many intermediaries, and to integrate it, to speed the things by changing the information in one stage to another. An example of business that has a simple and short supply chain is Dell. Dell manufactures computers and sells them online directly to the buyers. This means there are no wholesales and no need for retail shops. This speeds things up and reduces the final price to the customer. If the businesses improve their supply chain there many benefits that follows. Businesses can offer punctual delivery as a sales feature. The seller will have more control over delivery if the supply chain is short and integrated. One example of a business operating online that has this benefit is Dell. co. uk Other benefit is the opportunity for buying the products online. Businesses can improve the product delivery and reduce the time between the order and supply. Customers can check stocks online. If an item is currently out of stock many businesses put a note on the site and email the customer when stocks are replenished. One example of a business that has this benefit is ebuyer. com. Ebuyer is a business like Dell. It sells directly to the buyer; there is no need for retail shops. Online order tracking is another benefit. It enables the customers to check every stage of their order from the supplier’s website. The system sends automatically email to customer informing about tracking order. In other systems customers can check at any time the progress of the order. Ebuyer. com is a business operating online that enjoys this benefit. Businesses can reduce overheads and labour costs. A business that has a short and an integrated supply chain has more possibilities to process the orders more cheaply. This is because there is likely to be fewer staff required to process paperwork relating to customer orders, fewer shops required if the business deals directly to the customer, fewer intermediaries required and fewer staff needed to deal with the customer. Ebuyer and Dell are two examples of businesses that enjoy this benefit. Reduced stockholding Businesses can improve cash flow through fewer bad debts. Cash flow improves if the customer is paying as they make a purchase. The transactions over the internet are done by credit or debit card. The card payment is always checked and authorised before the goods are dispatched. Ebuyer. com can choose where to locate. Ebuyer only trades over the internet. It has more freedom in choosing the location than other types of businesses. A business can save money with affiliations with ISPs and portals. This works as the following: a business wants to show the location of the company, the business can do an affiliation using multimap to show it. One example is the BT website. Other benefit is the accessibility to different users. Disabled and housebound people have more advantages to shop at home over the internet. Also people who live in rural and remote areas don’t need to worry to go a shopping trip. Only one â€Å"click† can save money and time. Nowadays is increasing availability of public web access points. The internet kiosks and cybercafi s are a common feature in all large towns and cities. They enable anyone without a pc, or away from home, to access the internet easily. Also the pocked Pc’s and the portable computers, laptops, enable the access to internet at any time. Advantages of to businesses of having an online presence rather than having a purely offline presence Tesco are ale to sell a lot more groceries as they have both their stores and the home delivery service than Primark which only sells its product to customers who came into their stores. Tesco website would operate globally as well as locally for relatively little extra cost. Tesco can get a wide range of customers because they can buy online at any time. People don’t need to worry to go for shopping. Only by one â€Å"click† people can shop online. Also disabled people would prefer to shop online. Primark website only offers the information about the products and where to find retail outlets. In my point of view an online presence has more advantages than a purely offline presence. An online presence can get more customers selling online than an offline presence. The customers are very important for a business because without them a business can close. In conclusion, I mentioned the benefits of an online presence and the advantages of an online presence rather than a purely offline presence. BTEC First in Business Unit 8: Business Online.