A2 Business Studies essay

With reference to organisations, markets or industries that you know, to what extent do you think that the internet is a threat rather than an opportunity for business?

We live in the age of a digital progress, which is spreading all over the world with an unbelievable speed. Every day thousands of people get access to the internet and, therefore, are able to shop online. This makes running an online business very attractive to many entrepreneurs: the internet gives them many opportnities, which are unavailable for the so called 'offline' businesses. Online businesses are easier to start up and manage, the costs are much lower (no need to pay for the rent or electricity, labour costs are also low compared to real businesses) and the internet by itself means more extended market. With a correct and successful marketing campaign, any online business can fastly develop, cover all start up costs and start to make actual profits. That's why the number of online businesses grows each day. For some businesses switching to 'online' mode may help avoiding failure. The famous example of this is the network of shops Woolworths, which became bancrupt over Christmas, but after that 'reincarnated' online. It seems that online businesses are much better than the real ones. But is this actually the truth?
Online businesses have their 'dark sides'. Shopping online means that customers have to leave their confidentional info like address, phone numbers and other contact information as well as credit card numbers and bank accounts information. Online shops are trying to protect this information, however, they do not succeed all the time. As a result, the customers may find that somebody is using their credit card or their e-mails are full of spam and viruses. If a business wants to succeed online, it has to provide a high level of security to protect their customer's information or they will lose all customers and may even be closed down. Other security problem is hackers, which may take over the website and all the stock, account and customer information, and there is nothing that an entrepreneur can do with this. Providing a high level of security costs a lot. However, hackers and virus programmes are becoming stronger and more complecated, therefore, no-one's information is safe in the internet. Other thing that may stop businesses from developing and making profits is very tough competition. No doubt that all online markets are taken over by monopolies like microsoft, amazon or e-bay, because they were started a long time ago and had a huge place to develop as they were first online. Competing with those online giants might be impossible for small unnoticable businesses. Even very interesting business find it difficult to take a small part of market share just because of consumers' lack of information. Also it is difficult to do an accurate market research, as online people tend to use fake identitites and lie about their interests.
The internet might be a threat for many ambitious businesses which aim to make profits because of tough competition, lack of security provision and information failure about an online market that they want to enter.

I suddenly realised that I have not enough knowledge of online industries and failures to write a good essay. But it's a good practise anyway.

No comments: