Comparison Between E-Business and Traditional Business

INTRODUCTION Electronic Business (E-Business) is a perplexing practice due to the numerous aspects it involves. In forthwiths rapidly changing environment, organizations adopt E-Business to respond to several byplay drivers. The progressions of the macro-environments are creating innovative business environments, in which E-Business is depended a normal practice. This paper attempts to theoretical account the business environment and evaluate its competitive characteristics by comparing the handed-downistic business with E-Business. Kreplin.K, et al (2000), identified Reality and Virtuality terms these terms differentiates traditional business from E-Business. According to Kreplin. K, et al (2000), E-Business is based on a virtual (digital) business process with a virtual agent, and virtual product. Traditional Business is a physiological business process with respect to the macro-environments. The macro-environment components can influence the modality entrepreneurs use the internet to coordinate export businesses. Analysis of the macro-environment comprises of cultural, economic, competition, political and legal factors that affect the way business transactions are made today.CULTURAL CHALLENGES In the cultural dimension, traditional business entrepreneurs leave alone face a major challenge. In this case, infrastructure comprise is what worries traditional businesses of today. As opposed to E-businesses, online business transactions incur stripped-down cost (Robertson. B & Sribar. V, n. d. ). Whereas, traditional businesses volition have to incur a substantive amount of cost in order to remain competitive in the market. This is due to the fact that there is a paradigm shift towards a more than innovative market alongside the consumers.Through the report it is assured that in the long term infrastructure cost will be the key obstacle for traditional entrepreneurs as newer technological innovations take place (Robertson. B & Sribar. V, n. d. ). Op posing to the traditional method of business, E-businesses also have their share of cultural challenges. Firstly, entrepreneurs will experience a win over in the nature of workforce (Parreiras. F , n. d. ). According to Heerwagen. J, Kelly. K, Kampschroer. K (2010), the structure of work is now more cognitively complex, team-based, nd time pressured. This attempt causes entrepreneurs to be more competitive. Secondly, there is resistance to change when an organization moves towards adopting E-business (Parreiras. F, n. d. ). In a research done by Ahmed. Z and et al. (2006), it was determined that the resistance to change will cripple the organization. Thus, it is important for the entrepreneurs to adapt to rigid cultures. ECONOMIC CHALLENGES In the aspect of economy, the nations currency plays a vital role. Thus, it also poses as an obstacle for traditional businesses.In areas of importing and exporting, entrepreneurs need a mutually agreed upon currency (e. g. U. S dollar) due to different payment methods. Furthermore, being sensitive towards interchange rates of currencies is vital as it will affect the buying decisions (Kavas. F, 2011). As compared to E-business transactions, the fluctuation in currency is harder to depict thus, becoming a challenge for traditional businesses. On the other hand, E-businesses also experiences economic challenges. Firstly, the free entry into the digital market will be a problem for entrepreneurs.As there are minimal barriers to entry, it would mean that E-businesses are operating in a highly competitive market whereby competitive advantage is almost impossible as highlighted by M. Hassan & E. Harris (2007). With this close competition among entrepreneurs the issue of imitation of products will arise. As described in the related research paper, it was revealed that a massive amount of imitation took place as it was a cost effective method to most entrepreneurs. Therefore, it becomes an obstacle for E-business entrepreneurs . COMPETITIONWhen it comes to traditional businesses, entrepreneurs will definitely face competition. One major factor that entrepreneurs have to consider while exporting their products is the difference in time partitions. An article written by Henricks. M (2006) explains that the time zone differences will cause a solidifying of difficulty in terms of decision making, planning shipment, organizing logistics and more. As opposed to E-business, E-business have online softwares that enables smooth communication through digital platforms regardless of time zone differences.For E-business entrepreneurs, the first challenge here is the difficulty to obtain capital large enough for any ventures. This includes the research and development needed for the product. In the report Managing cosmopolitan operations & Communications with Information Technology (2007), it was highlighted that many venture capitalist will incur higher risk with large sums of capital. This is because there is hig h perplexity of success for entrepreneurs to compete in an open market environment. In addition, another factor arises which is also known to be labour market exuberance.This is described as an irrational competition that arose with the increasing need of technical skills (e. g. software programming). Therefore, firms will likely experience a short supply of skilled workers (Wright. P & Lee. D , 2000). POLITICAL & LEGAL CHALLENGES In the area of political and legal, there is a major concern of the countrys policy for traditional businesses. Entrepreneurs need to deport by both the local and the other countrys laws and regulations while selecting to export goods over. This is due to several laws are made according to the countrys culture and beliefs (Kavas.F, 2011). For instance, products that contain pork are restricted in Islamic countries due to their religious beliefs. Apart from that, there is an essential concern of the security and silence of E-businesses (Parreiras. F, n. d. ). A research on Security and Trust in E-Business by Valmurugan,M. S (2009) discussed the unawareness of E-business transactions and the degree of confidentiality of E-business transactions. Without the trust of consumers, entrepreneurs in the E-business line will be facing serious competition to obtain their share of the market.Another major concern is the organization regulations. The government needs to play a role to harbor the consumers against unfair and deceptive trading especially when it comes to Internet banking (Kay. A, Hafeez. K & Siddiqi. J, n. d. ). Therefore, this would become a small obstacle for E-business entrepreneurs as they need to adhere closely to government policies. CONCLUSION This research paper covered numeral aspects of traditional businesses and E-businesses with respect to the macro-environmental challenges faced by the entrepreneurs.Because we live in a rapid changing environment, businesses will continuously face multiple challenges. The traditio nal way of business may have been successful in the past, but now is the time for change. E-business enables organizations to reach orbiculate markets thus, crossing borders with less restraint from trade barriers. Evidently illustrated by Fleenor. C & Raven. P (n. d. ), the adoption rate of internet is growing tremendously and that governments of international countries recognises much(prenominal) growth hence, promoting it as well within their country (e. . E-government). Although there may be areas that E-business is a challenging area to pursue however, without such obstacles businesses will never revolutionalize. Therefore, it goes to show how businesses have evolved over the decades. Business entrepreneurs need to be more innovative as traditional business will soon be uncompetitive. 1,111 lecture Reference List Ahmed, Z. et al. (2006)RESISTANCE TO CHANGE AND ERP IMPLEMENTATION SUCCESS THE MODERATING ROLE OF CHANGE MANAGEMENT INITIATIVES. online Available at http//web. usm. my/aamj/11. . 2006/AAMJ%2011-2-1. pdf Accessed 26/9/2012. Fleenor,, C. and Raven, P. 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