Sunday, August 29, 2010

Brick-n-Mortar and Online Small Businesses Negatively Affected by Globalization

In this global economy and with the constant increase of information technologies that permits access to the Internet and the WWW, information has enormous value and it has great influence in how business transactions are handled. As a result, time and distance have less meaning for most business environment; buyers have more power than ever before and are enjoying greater access to markets. And at the same time, sellers are also finding remarkable advantages in doing e-business. Consequently, these facts have greatly impacted traditional businesses and mediators to the point that many have been replaced or eliminated. For example, Brick-and Mortar enterprises have been replaced by e-retailers (e-businesses). These are some good examples: travel agencies are been replaced by e-business’s travel agencies such as Expedia, Hotwire,, etc. For these reasons, many traditional business and retailers have combine brick-and-mortar business facilities with e-business operations called brick-and-click companies.
 Like for everything else, e-business has its advantages and disadvantages for both buyers and sellers. Advantages for sellers: More sales opportunities, decreased costs (overhead costs), 24/7 sales, access to narrow and global markets, increased speed, accuracy and information as well as data collection and tracking. Advantages for buyers: More product availability, customized buying options, 24/7 shopping, simple comparison shopping, access to global markets, quick delivery and information, access to description of products and services. Disadvantages for Sellers: growing competition from other e-businesses, constantly changing technologies, problems inherent in maintaining e-business systems, global market issues such as diverse languages and cultures, political environments, currency conversions, etc. Disadvantages for buyers: Differentiating online sellers, transaction security and privacy, dealing with possibly untruth-worthy sellers, inability to touch and feel products, concerns about vendor reliability, issues with state sales taxes, and difficulties with product returns.

Eventually, the trends rely upon technology driven advances in communications and organization. How an organization is structured will depend upon bottom line aspects, assisted by technology. Production sites can be in one physical area, while marketing, accounting, business development may be located in other corporate facilities. In yesterday's world, there were large office staffs, large brick and mortar locations and the higher costs associated with it.

Small business today can decrease cost and still operate in distant localities efficiently. If employees can work remotely, aided by technology, the entire management team can as well, and be in different places and still work as a team using technology and technology based equipment. The whole strategy is that in order to maintain profitability, it could only be accomplished by controlling costs and eliminating investment in the typical and conventional outwards trappings of a corporate infrastructure.

Careful use of technology infrastructure is very important. Using IT or communications technology intelligently can cut costs, and it can be done by eliminating expensive plant and equipment expenditures, as well as human costs. It is true that many in the media express grief over the fact that jobs are going overseas. However, it's only occurring because it's wiser to operate in that fashion in order to preserve the business as a whole.

As the e-business industries around the world progresses by the day, the small business sectors will be forced to use technology wisely, struggle for profitability and pursue many of the strategies in play with the top and largest companies (the Fortune 1000 companies). The future is hardly bleak, except for those whose jobs are outsourced. The United Sates will maintain this sector in whatever form the technology of the day leads it.

Regardless of all the changes in advanced technologies, I believe that many small businesses will survive the trend. There are many businesses that we could never go without. For instance, grocery stores and pharmacies are indispensable in our daily lives. Barber shops, beauty salons, car & body repair shops, and other similar businesses must have a physical site. However, they must follow along with the advancement of information technologies in order to compete. On the other hand, brick-and mortar industries such as travel agencies have been greatly affected by e-businesses. I remember the old way when we had to go to a travel agency physical site to make our travel arrangements, but now we can get some great deals by comparing online sites. I can go to and get the best deals for my travel plans and that includes an airplane ticket, hotel, car rental, etc.

References: - Globalization Pushes Technology as Technology Pushes Globalization - Tips for Managing Remote Worker Programs

Napier, H. Albert. "E-Business and the Global Economy." Creating a Winning E-Business. Boston: Thomson Course Technology, 2006. 8-14,17. Print.

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