Computing (IT)- essay
by matthew foote
Will the internet keep the U.K competitive in a world market, in terms of industry?
Recently there has been emphasis for electronic business. Judging by IBM’s recent advertising campaign you would be forgiven for thinking that launching a company website leads to instant profits. IBM ‘s portrayal of a grandmother taking her olive oil business from rural Greece into global markets neatly demonstrates the potential of the internet for huge exposure and trade without the barriers of geography and at a lower cost. Unlocking this potential for any business in the U.K and elsewhere is no easy matter. Although several large firms in the U.K are now making real impact through e-commerce, although examples of profit’s being made in small and medium (SME) sized business’s are few and far between.
Even though the effects of the internet on U.K’s industry can only be predicted at this early stage, there have been incentives (rewards) offered to several SMEs generating business with their websites by the government. Firms with no more then 250 employees where asked to show how they had used e-commerce to increase efficiency or to boost their sales. The average investment that created a profit among the ten regional winners was around 20000 pounds with the cheapest being 10000 pounds, all the companies testified to the need for expert help.
Such expense results from the need to have an aesthetically pleasing website which offers in depth analysis whilst maintaining a user friendly aspect. The site must encourage people to explore and revisit and its presence on the internet needs to be developed, which generally requires the advice of a specialist.
At present time in the U.K the internet is used mainly for business to business activity with less emphasis on customer intervention. One of the main reasons for this is the transport costs, a business will normally order batch which would make it worth while were as customers only demand 1 or 2 goods. The idea of supplying customers with intangible goods, such as music, computer games/ programmes, software upgrades etc. is becoming increasingly more popular.
A telephone poll carried out across Britain based on 4000 calls found that while 39% of internet users have bought clothes by mail, only 13% would be willing to buy clothes on-line and only 2% have actually done so. 70% had never bought anything on-line – many assumptions can be drawn from these statistics i.e. the British don’t trust the security aspect or the aspect of depending on delivery without any one to one contact. These connotations of the internet could lead to the U.K being left behind on the business to customer aspect, but there still is possible scope for business to business activity.
If you want to accept credit card payments on your site, you have two basic options; the first is to purchase your own, secure web server, which will probably involve employing a technical expert to set up and maintain the system. The second is to use a fulfilment system provided by a third-party – many internet servers offer fulfilment services, processing your transaction for a percentage cut or flat rate, while taking responsibility for the security of customer data. This method is preferred as it reduces pressure on the business and lets them concentrate on fulfilling demand.
Overall, it is important to keep the issue of security in prospective. Statistics which I recovered from the internet suggested that the U.S internet market complaints beurau (NCL Internet Fraudwatch) had not received one sing complaint from a customer having their credit card number stolen.
After accessing different aspects of the internet being able to keep the UK’s industry competitive in a world market I sceptically believe that it has been unnecessarily over hyped and that in a few years the supply of internet based companies will liquidise.
I believe that large companies may have good reasons for taking advantage of the internet as they are already established and prospective customers can trust the name. This wouldn’t benefit the SME’s as an unsuccessful website launch good bankrupt the business, as the average input is 20000 pounds to produce a profit its a big risk – but on the other hand profit is the reward for risks being taken. Smaller business’s would be left behind as they wouldn’t have the capacity to effectively transport good to a world market and maybe not even in our own national market.
The intrusion of the internet I believe would have an effect on society as a whole, it would mean big business’s would become even bigger, eventually freezing out the SME’s. This would widen the gap between the upper class and the lower class’s as only menial jobs would become available in bigger firms which won’t allow scope for variation. In terms of industry though, the internet maybe seen as the easy way forward for the big business’s, as they have scope to take risks and still recover.
Reports suggest that at the end of last year there was huge optimism about e-commerce among SME’s corresponding with an increase in websites been set up. However this year has seen a slump in terms of smaller firms in terms of setting up and maintaining websites. This evidence suggests that SME’s were to quick to jump on the bandwagon last year and are feeling the effects of major loss’s. In these terms industry’s in the U.K are already suffering from trusting the internet.
At the moment the U.K is stable and up to date in terms of markets in various other developed countries, so why change a working and effective market. I believe the best approach is to step back and wait to see if he internet will develop any further. Also many business’s customer bases don’t have PC’s and there are many who will never be able to purchase such technology, let alone maintain and up date it, whilst paying the telephone bill at the same time.
Some social positive aspects of the U.K moving more into internet market’s is that it could help the elderly and disabled, in that they could be supplied with computer hooked up to hospitals, supermarkets, different companies to allow them to easily pay certain bills and also it can be used as a place to meet different people.
Although companies using the internet may results in a fall in price of certain products, or a increase in profits. This can be explained by the fact that by using the internet could lower production costs i.e. no need for CD’s and packaging when supplying music, it can easily be downloaded. It can used to cut out transport costs and communication costs. Also advertising on the internet is cheaper then any other medium – this would increase demand without much expense on advertising costs. Again this could lead to companies making a larger profit even it they lower their prices.