Electronic Commerce (E-Commerce:
The Digital Marketplace
According to the text, it is stated that the “existing and emerging web technologies are offering organizations unprecedented opportunities to rethink strategic business models, processes, and relationships. These e-opportunities are divided into three distinct categories namely: electronic marketing, electronic operations, and electronic services” (Turban et al., 2010). However, to support this preposition, Bill Gates answered in response to a question asked about how do we compete in the digital economy by stating that “competition is not among companies, but among business models” (Turban et al, 2010). Using the answer that Gates presented as a premise, this paper seeks to address the issue as to how Bill Gates’ comment can be helpful in understanding E-Marketplaces.
An Electronic Marketplace or e-marketplace is an online market, usually Business-to-Business (B2B), in which buyers and sellers exchange goods or services. According to Turban et al (2010), it can also be defined as a virtual marketplace in which sellers and buyers meet and conduct different types of transactions. The transaction could either be the selling and buying of goods or services or it could also be the exchange of goods for services or services for goods, also known as electronic bartering or e-bartering. It is significant to understand that within today’s economy, e-markets in general play a central and critical role in economic develop growth by presenting the opportunities for the exchange of information, the purchasing and distribution of goods and services at a fast, reliable, cost effective pace and also making the payment process for all transactions quicker, faster, reliable and safer.
In today’s fast economic and technological growth, the manner in which we carry on transactions also changed and this process will continue to change. Technologies have significant role in these changes. As such e-marketplace has also changed dramatically over the past decade and will continue to change as new technologies become available. Today, economic competition is not subject to our localities, company sizes and languages. We don’t need to be physically present at a specific location or speak a specific language before transacting with others. Through e-marketplaces, we are able to bridge those gaps or barriers created by the traditional system. The introduction of new technologies mostly the Internet or e-commerce and other sophisticated software, hardware and applications made marketing online easier than ever before.
Now concerning Gates’ comment that competition is not among companies, but business models and how this comment relates to our current and future understanding of e-commerce generally and e-marketplaces specifically. Before the introduction of e-commerce, the traditional system, which still exists today, was the principal means for all transactions. However, with the introduction of e-commerce and more specifically the Internet, the means of transactions diverted from solely physical to electronic. Therefore, as newer and newer technologies and applications were invented the need to transact physically and have physical malls is gradually fading away.
Different e-commerce companies employ different business models to attract buyers and other sellers to their website to transact. For example, Ford and General Motors all have excellent websites where potential buyers and other specialized retailers could build a vehicle in accordance with specific buyers choice. This system does not only benefit and satisfy the potential buyers and other sellers (retailers), but could also save the company lot of extra cash and resources by not piling up huge warehouses of unused car parts. Another perfect example of this strategic business model is how Dell.com allows buyers to customize their purchase of a brand new laptop or desktop. This model also allows that buyers to select what they want and not what some manufacturers think they will need. This allows the buyers to be part of the production cycle by selecting from an e-catalog of different choices laptop parts and eliminating unnecessary options.
The business model that a company employs as an electronic commerce has a significant impact on their performance and how competitive and successful their businesses become. It is true as Bill Gates said, “competition is not among companies, but among business models” (Turban et al, 2010). This is a factual statement, because a business models “describes the rationale of how an organization creates, delivers, and captures value. The processes of a business model design is part of business strategy”(www.wikipedia.org). New sales and “business models such as shareware, freeware, build-to-order, and pay-as-you-use are gradually emerging and as they become widely available to public access, they will significantly pervade other sectors of the business world and human life in general” (Turban et al, 2010).
1. Turban, Efraim; King, David; Lee Jae; Liang, Ting-Peng; Turban, Deborrah, (2010). “Electronic Commerce 2010: A Managerial Perspective.” Global Ed. Upper Saddle River, NJ: Prentice Hall, 2010.
2. Wikipedia (2010). “Business Model.” Website: http://en.wikipedia.org/wiki/Business_model. Accessed: 07/15/2010.