business essay online

business essay online

The Impact of Online Business in the Modern Economy

1. Introduction to Online Business

The new generations, born with technology in their hands, look differently at the way others do the shopping for fear of internet fraud. This reluctance will be lower in the years to come, and the growth of online purchases will be increasingly pronounced. This study aims to demonstrate the positive aspects of online shopping, as well as convey information on various types of electronic fraud presented, since there have been many complaints from various people questioning the security of the online sales method and the business operating online. On the other hand, businesses that want to be leaders in their sector, being able to reach customers in all parts of the world, businesses that can operate 24 hours a day, businesses that can have a reduced cost structure compared to a traditional retail store, businesses that do not need to pay a fee to a host municipality. Since an exclusive store does not operate on the street, it is possible to convey ideas on how to open a business with fewer costs, as long as the business has the same or better management than any traditional store.

No one can deny the technological revolution that is currently taking place. Every day, new applications become available to all companies and industries in general. Information technology has changed the way of doing many traditional activities. Even purchasing management, one of the most traditional activities, has undergone numerous changes due to computer programming and communication revolution. If before, the buyer needed to go somewhere to buy something, now it is possible to do so through the comfort of their mobile/smartphone, computer, or through a service that allows automatic purchases. This purchase on the internet through a website is something that is relatively new, using a virtual card or a bank card to make the payment for the purchase. There are today a large number of shops offering a vast range of products. As a consequence, the buyer begins to migrate to the internet.

Introduction

2. Key Advantages of Online Business

Distinctive advantages of online business include effective online advertising, wider choice of suppliers than previously, provision of online pricing information and bidding opportunities, linking to potential partners in other countries, company recognition and sophistication. To achieve success, the business must be carefully targeted. Online advantages such as advertising pricing information and wide supplier numbers can be particularly important features of successful internet businesses for small, start-up businesses or those benefiting from economies of scope. While well-tailored advertising is more likely to succeed if it reaches potential customers at the right point in the industrial purchase cycle, other benefits, such as pricing details, would seem to be less dependent on an efficient online harvesting of consumer interest and are of general use to all competitors in an industry. Thus, those business units that can make the best use of these unique online advantages might be those that benefit from small scale, rather than large-scale advantages from their intrinsic finiteness or from market frictions.

Nowadays there are more and more businesses turning to operating and striving on the web, but the internet still offers unparalleled opportunities to anyone wanting to explore them. Building and operating a business on the internet has many advantages, with its global reach and low cost of setting up. Websites are effectively online brochures and links to businesses from anywhere in the globe can bring both sales and prestige.

3. Challenges and Limitations of Online Business

Added to those many general business challenges and limitations are others that arise specific to a business that is conducted online. For the traditional business, the most important barriers to entry are the costs of buying or building the traditional, bricks and mortar business infrastructure and the costs of employing sufficient staff to run that business. Factor circumstances, material costs, and a lack of skill only increase an owner’s barriers to entry investment costs. In contrast, one attractive feature of online markets is that the fixed costs of building an online business infrastructure are very low. The first and most important limitation of an online business is the need for an IT-savvy owner or a first-in-command with far more than only a basic traditional business education. Any potential owners and/or senior managers must be intimately familiar with the prevailing market environment, niche they wish to fill and the very advanced features and benefits of the online research and organizational tools that are necessary for success on the buy side and the website investment protections, sales management, and the site-wide organization needs found on the sell side. The successful owners must also develop and monitor legal/business guidelines that not only protect, enhance and control inventory levels and sales volume but also protect the online business itself and its reputation.

Several challenges and limitations could deter the start-up or hinder the growth of an online business. Before describing those possible challenges and limitations, I should point out that many of the challenges and limitations that become barriers to entry or growth for an online business also apply to a traditional business regardless of its business model or the number of employees involved in running the business. Those general business issues face all business owners, large or small, and include the well-known issues of raising capital and then knowing how to use that capital efficiently and effectively in order to achieve superior profits. The same thing is also true on the demand-side of the business because all businesses have the tenuous legal standing of being price-takers rather than price-makers. The limited number of potential customers or the customers’ limited disposable incomes determine how much a business can prosper.

4. Emerging Trends in Online Business

The variety of uses for the web demonstrate the emerging trends in electronic businesses. The web makes it possible to improve and extend business relationships in revolutionary ways. It permits a business to extend its sales network by creating an electronic retail outlet in hypertext form on the web. This virtual storefront costs less than an addition to a brick and mortar outlet that would be necessary for the added sales. Some companies are trading in the currency of cyberspace. These pioneers are using the electronic connections of the internet to build new business relationships, and even to do transactions in virtual currencies such as Cyber-Cash. These transactions can be as trivial as downloading software or as significant as buying a car. The web growth has altered the importance of several trends in telecommunications.

Businesses use the web in a variety of ways. Beyond creating their own web sites, the use of search engine services, mailing lists or new hardware and software are some ways that companies more frequently use the web. Some are creating products that are available only through the web. Others are creating virtual storefronts that permit customers to browse products interactively. Some companies are using the web as a channel for customer service and support, thus decreasing the cost of their support. Others are using it to efficiently distribute sales literature to their field sales personnel or collaborate with their suppliers to manage the supply chain more efficiently.

5. Conclusion and Future Outlook

The immediate conclusion from the economic structure referred to in the last chapter is that the current global tax framework is partly incoherent. It simply does not reflect all the key features of modern digital activities which have made a significant impact on the Gross Domestic Product (GDP) of most tax jurisdictions and international transactions carried out within. Among those features, the most essential ones must be that a small number of giant players based outside the taxpayers’ home markets have made big business accesses in the local markets with huge internet users.

The rapid development of online activities and related intangible business has made a great contribution to fundamental economic development. This paper summarizes the key features of online platforms, such as the provider-consumer relationship, free economy, network effects, data-driven policy and technology, and international reach with regard to the global economy. It goes through online featured business with actual cases involved and concludes the modern economic outlook of such business from the point of view of business model and accounting practice. We then look at the growth of the related tax liability and policy debate and introduce a few key points of tax policy development targeting such sort of business in certain tax jurisdictions in the long run. Finally, we point out the important international co-operations to address better effectiveness of tax law enforcing among others.