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Moreover, imagine
the vast marketing potential! A
store that is open 24 hours a day, seven days a week, 365 days a
year and every single person with Internet access can ‘walk’
into your virtual store.
In addition, the
cost of marketing is much lower and yet further reaching. Communications with business partners are more efficient.
The website can be low maintenance and people can find out
information about your company, its products and thus boost your
company image and brand awareness.
This creates a multiplier effect for your marketing!
The Importance of the Internet for Businesses 
Email
Business messages
can be sent and received through the Internet.
It is possible to receive the messages almost instantaneously
and more importantly, on a 24-hour a day basis.
This is especially important if a business has overseas
clients.
Data Collection
The Internet has a
wealth of data. It is
possible to find information about anything through a search engine. Almost anyone around the world can look into a company’s
website, compare prices and compare products from other websites to
make a purchase decision.
Discussion Groups
Using the Internet,
it is possible for a person to join a ‘live’ discussion group to
find out more information. This
can be an advantage, especially if a commercial discussion group can
be found to find out how to conduct business to avoid costly errors.
Data Transfer
Mailing a large
document though the regular postal system to a foreign country can
take up to weeks. However,
by using emails, it is possible to attach documents and send them
straight off.
Advertisement
Search engines,
online advertising and email marketing are just new ways of exposing
your business on the Internet.
Given the amount of people that use the Internet, it is
possible that advertisement is more far-reaching than any other
source of advertisement. Furthermore, if some of your business partners open virtual
stores, it is possible to create links in each other’s websites
for free online advertisement.
Electronic Data Interchange (EDI)
Another branch of e-commerce is the use of
EDI. EDI is described
as the transfer of data in an electronic format from one computer
application to another often in a B2B situation. The definition of
EDI suggests that data has to be automatically machine readable by
both parties, a structured electronic message and follow certain
transfer standards such as ANSI X.12.
There are generally two types of EDI, Internet based and
value-added network (VAN) based EDI.
These will be discussed later.
Why EDI?
·
Technology – given the speed of today’s modern
cheap yet powerful computers, it has given rise to EDI.
·
Globalisation – rise of trade between foreign
suppliers
·
Japanese manufacturing methods such as JIT that
require fast communications.
Advantages in using EDI
·
Reduction in clerical cost
·
Reduction in inventory costs and potential reduction
in inventory storage space if a successful JIT system is put in
place
·
Improved cash flow
·
Faster and better customer service
·
Improved accuracy
Different between VAN based EDI and
Internet EDI
Traditional VAN EDI, requires trading
business partners of a company to be in the same network to be able
to trade with them. They
are required to use expensive leased lines in order to send
information (See figure 2).
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