Taking Businesses Online

I used to think that e-business and e-commerce are just interchangeable terms to mean the same things, but now with a deeper understanding of this concept, I am able to tell them apart. By formal definition, E-business is the function of deploying technology to maximize customer value while E-commerce is the function of creating exchange, for example buying and selling, over digital media (Kalakota and Robinson 1999).

Ever since the Internet took off and stabilised as a popular media, Internet technology went from being a good to have in businesses, to the actual cause and driver.  One of the theories that I actually find very apparent through my personal experiences with online businesses is that a main goal of doing business on the Internet is to expand the market reach of the business and to obtain a much more eclectic customer base, without geographical barriers. Furthermore, doing business online creates more flexible outsourcing alliances between companies, which lower costs.

However, not all entrepreneurs are skilled enough to use the Internet to their advantage, which prompts me to reflect on successful and unsuccessful online businesses, and the reasons for their uprising or downfall.

The success of top online retailer

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Net-a-porter is a luxury fashion retailer currently valued at £350m. In the 90s, women only bought clothes they were able to see, touch and try on. Now, millions buy their designer labels online at Net-a-porter. Everyday, Net-a-porter ships out more than a thousand boxes of merchandise.

The key to net-a-porter’s success, was understanding what women desired. Net-a-porter is committed to innovations in web technology and has created a bespoke e-Commerce platform to offer its customers a fast, responsive and interactive user experience. With its acclaimed editorial format, express worldwide shipping to 170 countries (including same day delivery to London and Manhattan), luxurious packaging and easy returns, NET-A-PORTER offers an unparalleled shopping experience.

They have also manage to differentiate themselves as an e-business with the whole idea of curating Net-a-porter such that it developed as a digitally delivered hybrid between a store and a magazine, a shoppable magazine in a nutshell. Net-a-porter also has its own fashion channel, Net-a-porter TV, on YouTube which features runway shows of top designers all over the world first hand, and interviews with all who are famed in the fashion industry. The site popularised the act of bringing fashion spreads in magazines to live by presenting them in a video format.

The failure of Napster

Napster is a peer-to-peer (P2P) file-sharing site that experienced troubles ever since its debut in 1999. The company allowed users to exchange music files without any kind of regulation, and without any allowances for royalties to be paid to the person who held copyright to the files. The popularity of this service at that time only contributed to its legal problems.

Although Napster did not directly violate the copyright of materials shared on its site, it did facilitate copyright violations. In 2000 Metallica filed suit against Napster for circulating a demo song the group had performed, before its official release. Shortly after that episode, Dr. Dre also filed a suit against Napster. When Napster refused to remove the songs from its service, it was the beginning of the end. Napster settled out of court in those suits. However, the Ninth Circuit Court shut them down before the settlement was made.

Essentially, it was due to Napster’s lack of regulations that copyrighted material had been exchanged illegally on its service. Napster also did not take appropriate action in a timely manner against the users who were pirating copyrighted material on is site. In the end, the Record Industry Association of America succeeded in getting an injunction against Napster and the company agreed to pay 26 million dollars to the injured parties, and filed for bankruptcy.

E-Marketing
I have also learned that there are many different marketing mediums available to be utilized online. Hence it can be quite tempting for entrepreneurs to flitter back and forth, while trying out each one in part. Many entrepreneurs also tend to switch quickly to a new strategy if they experience quick success with one. Unfortunately, by doing that, they are not able to fully realize the potential of each marketing method. Instead, whether or not a strategy reaps quick success, entrepreneurs dabbling in e-marketing should maintain one particular strategy and give it a chance to flourish. Trying multiple marketing methods while only investing limited input into each will only ensure partial benefits. Instead, entrepreneurs should focus on one or two marketing approaches, master them and make sure they have exhausted their capabilities before moving on or adding a new approach.

It is also extremely important for entrepreneurs to network with others in their business’s niche. Entrepreneurs can increase traffic to their own site by commenting or guest posting on related websites and blogs, as well as link to authorities in their niche for exposure and networking. Entrepreneurs should also perform a traditional SWAT analysis to figure out the website’s assets and flaws. Then, determine which opportunities are out there for their sites, and decide what external factors threaten them.

Security, Privacy and Legal Issues

Security over the Internet is of immense importance to promote e-commerce. Companies that keep sensitive information on their websites must ensure that they have adequate security measures to safeguard their websites from any unauthorised intrusion. A company could face security threats externally as well as internally. Externally, the company could face problems from hackers, viruses and Trojan horses. Internally, the company must ensure security against its technical staff and employees.

Security can be maintained by using various security tools such as encryption, firewalls, access codes / passwords, virus scans and biometrics. For example, a company could restrict access to the contents on its website only through the use of a password or login code. Similarly confidential information on websites could be safeguarded using firewalls that would prevent any form of external intrusion. Apart from adequate security measures, appropriate legal documentation would also be needed. For example, a company could have an adequate security policy that would bind all the people working in and with the company.

Moreover, a company could also be held liable for inadequate security procedures on its website. For example, last year, a person decided to sue Nike because the Nike’s website was hacked and the contents of the domain were re-directed through the person’s web servers in the U.K., bogging them down and costing the web hosting company time and money.