Investigate the impact e-commerce has on SMEs (Small and Medium Essay

Investigate the impact e-commerce has on SMEs (Small and Medium Enterprises) and explore the perceived benefits gained by operating online - Essay Example There are four major categories of e-commerce, namely, Business-to-Business (B2B), Business-to-Consumer (B2C), Peer-to-Peer (P2P) and Consumer-to-Business (C2B) (Rayport & Jaworski, 2003). In addition, there is also government involved in some instances, so that there are actually three parties in such cases. This makes the total number of categories equal to nine; however, it is often omitted due to rarity of such situations ever arising (Schniederjans & Cao, 2002). Quite clearly, electronic commerce enables a two-way communication between various ports involved in a financial transaction. The history of online business can be traced back to that of the invention of World Wide Web, although, it was the least important of all causes that operated behind the invention of the latter (Chan, Lee, Dillon & Chang, 2009). In fact, it was only when researchers were contemplating different areas where the new invention could prove to be beneficial, that the concept of introducing electronic commerce was paved (O’Regan, 2008). The Internet is a common platform for a large quantity of information. Not only has it helped to make communication faster and cheaper, but has also facilitated in building up of a large database including different hardware and software sourced in different networks. This was one of the primary features of Internet that attracted firms from all over the world to try their hand in e-commerce (Schniederjans & Cao, 2002). However, as its use became more and more popular among the firms and their customers, more benefits of using the technology started peeping out. Two of the key advantages of adopting electronic commerce in making financial transactions are – reduction in the cost of accomplishing transactions and enhancing productivity of the firms. Introduction to online technology has helped in lower recruitments and lower cost of maintenance indicating a reduced cost of