Web for industry
With the rising competitive advantage of industries, it has become pertinent to consider the influence of internet in the implementation of corporate strategies. Most obviously it enables companies to conduct business directly with their customers and suppliers, often in a more streamlined and efficient manner.
In the automobile industry, selling a car online is different than how the traditional car sellers are trained to first meet and greet the buyer, then demonstrate the product’s features and the last thing is to give a price. While the online sales place price as the first thing. If the price is good, then the meeting, greeting and demonstration follow. Also, if another merchandiser beats the pricing, that’s where the customer places the order.
The example of single automobile industry reveals only a part of industrial trading. The internet has a democratizing effect on the modern society by bringing a digital wallet to consumers, in which they carry all of their accounts as digital tokens and then interface with a merchant to verify identity and choose which account to pay from.
Industries are fast adopting the internet as a distribution channel. The formation of distribution channels determines the growth of any industry. The internet or web carries the following characteristics to suite the industry requirements, • Web-based distribution channels cannot be controlled by companies in any industry. Distribution costs are low. Impact is limited (temporary). Predictions are made, but true impact is not really known. • It enables fast distribution of information products. • The cost of changing prices or even commercialized products is very low, thus enabling a relatively quick product rotation. Security protocols are stronger and more reliable. The potential buyers have now access to industrial database, which provides them direct comparison of prices, quality, and service received from an independent organization at the moment of decision making. This practice has significant impact on the consumer behaviour. The influence of the information can be so strong that it can possibly wipe away the positive experience of the product. This is because customers have all the information they need, and the switching cost is therefore very low.
Also, the suppliers are forced to put greater effort and obliged to lower the prices and constantly improve quality and service. Another inferred fact is that traditionally customers have a tendency to be associated with the same suppliers providing them a satisfactory service. But with internet, customers look out for more new suppliers while the level of satisfaction is never maintained.
This does not imply that the web based distribution channels are not fair; rather it has become easier for a new supplier with attractive prices and good service to enter the market. However, analysts argue over the control industry suppliers should have on how much information they are willing to disclose on internet distribution channels, in order to avoid a war in the market.
To have a closer look on industrial working on internet, the example of US government is relevant which is pushing hard for an electronic medical record in the healthcare sector by 2014. The move to electronic medical records — and a portable EMR that the patient controls —will not only shift the investment in healthcare dollars away from old processes and products and into a lot more IT systems, but it also has the potential to give patients more ownership of their own healthcare experience, which could have unforeseen consequences for pricing, provider choice, and provider accountability. Moreover, the stock trading has also been totally revolutionized. PayPal and eBay have had a major impact on the peer-to-peer exchange of goods between people and how they pay each other for them.
As a contrast, media industries are struggling through the piracy issues. In Croatian music industry, the recording labels and some Internet Service Provider (ISP) companies are searching for new models of legal music distribution. One solution is found called kiosk retailing. This business model establishes a strategic alliance between a daily newspaper and a recording label and buyers can purchase popular audio CDs together with the daily newspapers at a price which is 60 percent lower than regular retail. Based on Economies of scale, this method is bringing high profits.
The impact of web on industries needs to be regulated to maintain the enthusiasm of consumers in online selling and buying. Thus, a commercial implementation of the web is in mutual interest of the industries and the potential buyer