The Internet has grown so much since its inception decades ago. To the point that it influences our daily life, school and the work environment. 1/3rd of humanity uses the Internet presently. Due to this the business environment has changed immensely due to how many people log on every day in order to communicate with each other. The Internet has been implemented by business for marketing and promotion of products and services as people are leaning towards doing all their shopping online, or as much of it as possible.
Porter’s Five Force Model
This offers frameworks to measure industry competition and analysis, and helps to build business strategies. What are threats from present and future competition and existing substitutes? How much bargaining power do customers have and measures negotiating power of suppliers?
Threat New Entrants: There is a lower entry barrier in being able to set up new businesses due to the Internet. Increasing competition lowered margins too.
Threat New Substitutes: There has been a reduction of the product life cycle due to the Internet. Encouraging innovation and new shelf lives of products are now the norm for customer serving.
Bargaining Power Customers: The customer is now well informed in what products do and what may be good substitutes. In this businesses have to watch what they put out there dealing with differentiation and pricing.
Bargaining Power Suppliers: Suppliers are in the same boat as the customer is now too except focusing on the industry they are in.
Threat of Competition: It is now extremely important to be transparent and honest in order to become successful. The customer knows more about the business, and the Internet lowered cost of searching for new products.
Internet and Business
How the Internet changed business can be measured in many ways. The main thing is that it opened new avenues to be able to conduct business more smoothly, timely, and cost efficiently depending on the situation.
Communication: There are now a lot of new ways to connect to others and disperse information. Email, Instant Messaging, Intranet, Skype…
Collaboration: There is no such thing as geographical boundaries as the Internet allows for ease of collaboration now. The only thing that has to be considered is time zones as not everyone might be working in the same time zone. Meetings would have to be scheduled around that…
Business Transactions: There is now a culture of online businesses. Many stores have been opened up online. Now Internet banking and payment gateways are a normal part of supply chain transactions.
Work Flexibility: Now it is possible to work from home or in remote locations. Employees can now remain in touch with the company while away in order to know what’s going on at work. They can also complete work from these locations through logging into the secure business Intranet.
Web Based Applications: Here is where cloud computing comes to play. It saves so much space and money depending on what the company buys into.
The Internet is both a good and a bad thing for business. It’s good as the company can spread their products or services all over, or locally depending. They can learn more about their competition, learn more about what their customers want, what their suppliers might suggest. It makes communication a lot easier than ever. On the bad side though it allows for hackers to find ways to attack them and steal information. Security has to be high priority in order to make sure that this doesn’t happen. Employees and customers don’t need to worry about identity theft to name one vulnerability. The pluses outweigh the negatives though…