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VALUE CHAIN ANALYSIS:BUSINESS EFFFECTIVENESS THROUGH INTERNET TECHNOLOGY

Updated on August 3, 2012

Value chain analysis in business organizations is the responsible linking of all the departments’ activities and tasks without overlapping in order to create a successful business and in result will maximize profit and avoid losses. If value chain is strategically plan ahead by managers or managements they would minimize costs. Misallocation or overspending of funds, delayed deliveries of products and stoppage of production due to delay or problems in chain of activities (in producing these products) would tantamount to loss of profit and bankruptcy or the worst scenario is closure of business. “The aim of the value chain framework is to maximize value creation while minimizing costs” (www.wikipedia.org). Sometimes organizations merge with other businesses to avoid the closure of business. Speaking of Business, various types of businesses that originate in the cyberspace and this business is called E-Commerce.

E-commerce, either B2B or B2C, has been a lucrative business nowadays, example of these are E-bay, PayPal, Google and the alike. Many rich moguls in business world come from these types of business wherein their customers, clients and business partners transact their business online. The problem of going back and forth in the business area eliminates this scenario. They have strategically embedded their business in the cyber world were workforces are minimal, working space is not a problem.

What are the factors that make E-commerce a lucrative business of today?

E-COMMERCE GROWTH

Below are some drivers that made E-commerce penetrates and grows faster like a speeding bullet.

  • The economy, consumer spending, and retail spending

Because of the recession which started 2008, consumers change their lifestyle and the way where and how they spend their money. As the oil price hikes people tend to buy online because they can save fuel and to avoid a sudden change of mind in buying things that not in the list as he or she had seen something that appeals to him or her while driving to the retail store. In fact, US online retail grows to “11% in Q1 2008 compared to a growth of 16.9% in Q1 2007” (www. Wikinvest.com)

Online taxation is a hassle-free for Tax payers but some countries don't have online taxation. Businesses in some countries don't need to have permit to operate or pay taxes if they engage in online business.


As the year progresses the internet has become necessity for students, businesses and customers. The computer knowledge becomes a subject in a class where students are learning on how to navigate and get into the internet through the computers. We might not wonder if one day computer in each household becomes one of the primary needs in the family globally.

WHO GAINS FROM THIS SITUATION?

A.) Online Travel Services

Hotel.com is one of the beneficiaries to these drivers wherein they can sell travel services packages like hotels, cruises, planet tickets and tour packages.

B.) Online Retail

Amazon is one of the leading retail online that sells their product online and that gains millions of profit.

C.) Consumer Electronics

Apple, Sony, Blackberry and other gadgets industry increase their sales incrementally because of online marketing and consumer’s active participation online.

D.) Financial Transaction Services

Sending and paying money from abroad has never been easier because of internet. We can send money to our love ones through PayPal and pay for the items we bought in EBay.

E.) Travel Agency

Reservation and booking of your flights have never been a problem. Nowadays, travel agencies have website for the customers to transact their flights, pay for the reservations and bookings. This is also convenient in the side of the customers because they won’t literally go to the travel agency office and they could save time and fuel.

F.) Shipping

Traveling back and forth to the shipping company to follow up if the orders have been delivered or been received and filing complaint if not is frustrating and annoying to do. Like if you sent a package to your love ones in a post office. The post office has a website that will allow you to track your package if it has been delivered or in other words the status of your package. This move is convenient both the post office and the customers.


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