Online and Traditional Businesses for Developments - myassignmenthelp

Question: Discuss about theOnline and Traditional Businesses for Developments. Answer: Introduction The recent developments in technology as well as the latest innovations have greatly transformed the way businesses are being conducted in the present world (Zikmund et al. 2013). In the present times, the various companies greatly depend on the various social media platforms and other platforms offered by the electronic media not only for the purpose of promotion of the products as well as the services provided by them but also for the conduct of their business (Wikstrm and Ellonen 2012). A recent trend seen among the major companies of the world is to go digital to cater to all the needs as well as the requirements of the customers (Armstrong et al. 2015). It is to be noted that gone are the days when globalization was considered to be the main aspect of a success business. In the present day world it has been replaced by the online or electronic forms of businesses. Impact of on-line businesses on the traditional businesses The term e-commerce or online business was coined by IBM's marketing and Internet team in the year 1996 (Cavusgil, et al. 2014). The first recorded instance of the e-commerce dates back to 1994 when IBM used it for the very first time to sell its products and services (Cavusgil, et al. 2014). It is to be noted that since then the concept of e-commerce has become the latest trend in the business world. It is to be noted that with the rise of the online businesses the various traditional businesses have been hit hard. An evidence of this is the potential threat which the e-commerce giant Amazon Inc poses to the largest retail company of the world, Wal-Mart (Zikmund et al. 2013). This is in synchronization with the changing preferences of the customers who prefer to take the services of the online businesses rather than the traditional ones. This is a reflection of the several benefits which the various online businesses provide to the customers like home delivery, payment on delivery, the variety of options which they provide to the customers, the availability of all the popular brands at one place and others. However, according to an article, the various online businesses still need to go a long way in order to win the trust of the Australian customers (Financial Review 2018). On the contrary, when the decline in the performance of the Australian company Fairfax is analyzed it will be seen that while revenue for its traditional newspaper business continues to decline precipitously, Fairfaxs digital businesses such as its online real estate arm Domain are enjoying strong growth. These are expected to account for more than 60% of EBITDA in 2017 (The Conversation. 2018). According to another source, more than 50,000 consumers take the services of the various online newspapers more than 26 nations (The Conversation. 2018). This has resulted in a remarkable decline in the readership of the traditional newspapers. This is a reflection of the preference of the people to take the services of the e-commerce over the traditional businesses. An interview conducted with 20 different people reveals than around 60% of the people in the age group 18-40 prefer to take the services offered by the online businesses in comparison to the ones offered by the traditional ones. Marketing approach The various online businesses used the platform offered by the diverse social media platforms and other platforms offered by the electronic media for the promotion of their products (Wikstrm and Ellonen 2012). In addition to this, they target the customer base in the age range of 18-40 who are more technology savvy in comparison to the customers of the other age (Armstrong et al. 2015). In addition to this they attracted the customers by provided regular discounted sales. It is to be noted that this particular strategy was used by Amazon Inc to attract the customers who originally preferred services provided by Wal-Mart. In addition to this, they provide several attractive offers to the customers as already mentioned above. In comparison to this, the various traditional businesses still depend on the word of mouth and the various newspapers for the promotion of their products as well as services. Sales, Staffing and Costs Fairfax, an Australian media company lost almost $1 billion write-down in its traditional newspaper business whereas it gained a net profit of around $132 million in its online business (The Conversation. 2018). This data clearly states that in the recent times the amount of sale of products in the online sector has increased exponentially in comparison to the sale of the same products in the traditional form of businesses. According to the same interview mentioned above, around 70% of people in the age bracket 18-40 agreed that they would prefer to buy a product over the e-commerce website than go to a retail store and purchase it from there. It is to be noted that the cost that the various online companies incur is some degrees lesser than the ones incurred by the various traditional businesses (Armstrong et al. 2015). It is true that the various e-commerce websites need to spend a considerable amount of money on the technical front but they end up saving a considerable capital on various front like the salary of salesmen and other employees, the rent of the stores and various others. The cost incurred by the various online businesses is less in comparison to the ones incurred by the traditional businesses. As already mentioned above, the various online businesses save a considerable amount of money which the traditional companies need to spend in order to survive in the business. Conclusion Therefore, from the above discussion it becomes clear that the market has became saturated for the various traditional forms of businesses and they might even become obsolete if they do not take some drastic measures to save their interests. In comparison the various online businesses are booming and very soon they are expected to become the latest trend. They are already the preferred choice of the majority of people at present. References Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015.Marketing: an introduction. Pearson Education. Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L., 2014.International business. Pearson Australia. Financial Review. 2018.Australians still trust brick-and-mortar retailers online more: KPMG. [online] Available at: https://www.afr.com/business/retail/australians-still-trust-brickandmortar-retailers-online-more-kpmg-20170113-gtqsix [Accessed 12 Mar. 2018]. The Conversation. 2018.Disrupted businesses are struggling in the valley of death. [online] Available at: https://theconversation.com/disrupted-businesses-are-struggling-in-the-valley-of-death-63878 [Accessed 12 Mar. 2018]. The Conversation. 2018.Social media is changing our digital news habits but to varying degrees in US and UK. [online] Available at: https://theconversation.com/social-media-is-changing-our-digital-news-habits-but-to-varying-degrees-in-us-and-uk-60900 [Accessed 12 Mar. 2018]. Wikstrm, P. and Ellonen, H.K., 2012. The impact of social media features on print media firms online business models.Journal of Media Business Studies,9(3), pp.63-80. Zikmund, W.G., Babin, B.J., Carr, J.C. and Griffin, M., 2013.Business research methods. Cengage Learning.