Theinternet has no doubt changed every aspect of our lives including howwe interact, work, how we do our vacations and even the way we dobusiness. The effect of internet on business models has had positiveinfluence on business (Zott,Amit & Massa, 2011).However, for those businesses that have not been able to completelytap the advantage of the internet, they are facing challenges amidstthe internet revolution of business models.
Iwill go through this study by exploring different sources includingbooks, journals from credible databases as well as educationalwebsites. All the sources that will be used will be within the lastfive years, so that they can provide up to date information on thesubject. I will organize the information obtained in order toestablish the most suitable information to use for the topic.
Theinternet has three salient effects on traditional business. First, ittransfers power from sellers to buyers by minimizing the cost ofswitching vendors, (as the next supplier is just a mouse-click away)and freely making available a broad range of information regardingprice and product (Andal-Ancion, Cartwright, & Yip, 2012).However, buyers can feel overpowered with this new power at theirdisposal. They need one stop shopping information they perceive to beaccurate and they can trust.
Secondly,the internet mitigates transaction costs hence stimulates economicactivity. For example, a banking transaction online may cost one centas opposed to 27 cents over an ATM. To process an air ticket onlineis cheaper than through travel agencies (Wirtz,Schilke & Ullrich, 2010).This savings are however possible for large businesses like banks andcompanies which reach their clients directly.
Thirdly,the speed, range and availability of information online and the lowcost of distributing and having it create new business possibilities.
Inmy position, I believe that the internet have had significantcontribution in the world of business. The positive influence of theinternet on businesses is undeniable. The cost of doing businesstoday has decreased significantly. Unlike in the traditional businessmodels where companies spent so much on marketing campaigns, theinternet offers a platform where the business can reach customers forfree. Social media platforms such as Facebook and Twitter have becomepopular for businesses to reach their customers. In addition,customers are able to talk directly to businesses and have theirgoods delivered of services without necessarily visiting a store or abusiness premise. Consequently, businesses today do not need a brickand motor kind of office, as they can operate a virtual officethrough the internet (George& Bock, 2011).
Nevertheless,I believe that the internet have had negative effect on somebusinesses. In traditional businesses for example where people visitthe market place on a market day to buy farm produce or animals, theinternet does not offer this unique experience. Many are times thatbuyers feel that they need to visit the market sample the variousproducts before paying for what they have settled for. During Ramadanfor example, Muslims visit the market to find the best goat toslaughter for the occasion (Beck, Demirgüç-Kunt & Merrouche,2013). Despite businessmen posting photos online for these goats,customers still believe they are not getting the best if they haven’tseen the products on a real situational basis.
Andal-Ancion,A., Cartwright, P. A., & Yip, G. S. (2012). The digitaltransformation of traditional business. Image.
Beck,T., Demirgüç-Kunt, A., & Merrouche, O. (2013). Islamic vs.conventional banking: Business model, efficiency and stability.Journalof Banking & Finance, 37(2),433-447.
George,G., & Bock, A. J. (2011). The business model in practice and itsimplications for entrepreneurship research. Entrepreneurshiptheory and practice,35(1),83-111.
Wirtz,B. W., Schilke, O., & Ullrich, S. (2010). Strategic developmentof business models: implications of the Web 2.0 for creating value onthe internet. LongRange Planning,43(2),272-290.
Zott,C., Amit, R., & Massa, L. (2011). The business model: recentdevelopments and future research. Journalof management,37(4),1019-1042.