Electronic Commerce Viability by Industry Group

Use of the internet is growing at a phenomenal rate. For instance, it took 38 years for radio to reach 50 million users, but it just took 5 years for the internet to do the same (Press, et. al, 1998). Currently, the fastest-growing use of the internet is shopping online (Donthu and Garcia, 1999). Electronic Commerce (EC) is defined as any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods or services (Parker and Grove, 2000). By 2001, EC Electronic Commerce (EC) is expected to exceed $70 billion in Europe alone (Micossi, 1998). Of the households with personal computers, 1 in 10 has made an online purchase (ZDNet, 1998). More recently, Bayan indicated that 57% of North American internet users (approximately 45 million potential customers) have shopped online. These internet users spent an average of $460 each year on online purchases (Bayan, 2000). On the other hand, Uchitelle (2000) suggests that EC transactions between organizations will far exceed consumer EC transactions. Uchitelle (2000) reports that EC transactions between organizations totaled $90 billion in 1999, as opposed to $16.7 billion for consumer EC transactions. Acceptance of the security and usability of electronic funds is low but growing (Komp and Walstrom, 1998). Both of these infrastructures, (the net itself and an acceptable payment mechanism) are necessary precedents to a vibrant world of Electronic Commerce (Evans 1999). Electronic Commerce is changing the value chain from manufacturers to retailers to consumers by altering the way people communicate (Donthu and Garcia, 1999). While it is clear that EC will change the face of buying and selling products, what is not clear is who will be the big winners and losers. As Parker and Grove (2000) note, The growth, integration, and sophistication of information technology and communications are changing our society and economy. Although the expanding use of computers and other electronic tools is widely acknowledged, their effects are largely undefined and, therefore, hidden or poorly measured in official economic statistics. While it is clear that EC will change the face of buying and selling products (Gogan, 1996-1997), what is not clear is who will be the big winners and losers. The strategic use of EC techniques may well change the basis of competition in many industries. Although it is impossible to accurately see the future, this article presents a basic framework for evaluating the use of EC in different industries. The framework could also be used by individual organizations as a decision tool to evaluate the potential benefits of entering the EC world. Wouldn\u27t it be wonderful if we had a nice accurate crystal ball that would show us the future? Then we could see all of the ways in which EC has reshaped the competitive business world. There is no crystal ball, but what is offered here is an attempt to reveal some portion of what might be shown by such a marvel. Many technological innovations have come along to change the landscape of the business world. Frequently they were not perceived as having much potential impact. For instance, many observers thought that the telephone would not greatly influence business practices. As President Hayes said, Business people will always want to have face-to-face contact. Gogan (1996-1997) suggests that marketing and sales techniques change in response to technological advances. They present a summary of these changes based on past technology along with an early examination of the influence of the World Wide Web on marketing and sales techniques. DePrince and Ford (1999) in highlighting obvious distinction between the goods sector and the services sector, point out that the subsectors of specific goods and services require individual attention. These prior works represent a call for the current paper\u27s research into industry-specific EC impact. This project is designed to assist in the analysis of industry segments and product types that can be expected to have the greatest EC potential. Based on that, it should be possible to identify those industries that can expect the greatest amount of change as a result of the growth of electronic trading