Global Challenges in E-Commerce (2002)

With the relentless onslaught of globalization, many American firms are faced with the daunting task of how to remain competitive not only in the U.S. but also in new and emerging markets abroad. One way in which many companies are choosing to combat this problem is through the use of the Internet as a means of selling their goods and services. By becoming more involved in the area of electronic commerce (or e-commerce), companies are finding an easier and more cost effective way to do business globally. This article examines the global expansion strategies of American companies, and how by using the Internet, these companies have become more profitable and were able to increase brand awareness worldwide. The article also looks at what a company must do in order to be successful in e-commerce and how to incorporate ecommerce into existing strategic plans. Introduction It all began at the University of California, Los Angeles, in October of 1969. Scientists there were working an experiment to see if they could send information between two remotely distant computer using phone lines. Now, this experiment could have been with two computers across the room from each other or across the country, but the goal was to create a single working system. Although the first attempt failed, the scientists created the blueprints for the way the world would communicate and do business just thirty years later. Today, millions of people around the world either own a computer that is hooked up to the Internet, or have access to it through work, school, or other outlets. As the Internet is a relatively new idea, many companies are just now finding ways to use it to help them for financial gains. Another important occurrence in the world during the last thirty years has been the opening of borders and the declining of tariffs between countries in order to build business relations. With trade agreements such as NAFTA between nations, the global economy has increased exponentially. In order for U.S. companies to remain competitive, they must find ways in which to successfully compete with foreign firms as well as stay ahead of their local competitors. Many companies now have subsidiaries or offices in various nations across the globe to help them not only maintain operations abroad more effectively, but also to get a better understanding of the local culture. As more and more countries increase their collective wealth and stabilize their economies, many new untapped markets emerge just waiting for companies to come in and sell their products. Many people feel that, in the long run, the emergence of a global economy will only hurt everyone involved. Such was the debate at the World Trade Organization meeting in Seattle, Washington, in 1999. There is a concern that the world is becoming Westernized due to the emergence of the U.S. as the dominant player in the global economy. Others will argue simply that a global economy will promote greater competition between nations, and provide new jobs and a more robust economy for all. For better or worse, the world is certainly becoming more Westernized, with one reason being the increasing use and popularity of the Internet. The Internet now allows people from all around the world to contact one another and exchange ideas and beliefs, as well as goods and services. At the present time, the number of U.S. Internet users far outweighs those from other nations, and there is an ever increasing number of people who are logging on for the first time. The vast amount of people using the Internet has created the largest market the world has ever seen. The Internet now allows a company to reach those consumers that it could not reach before. Suddenly it is much easier for a company in Texas to sell its cowboy boots to someone in South Korea. Likewise, it has become more cost effective for the company to simply send the boots directly to the consumer, rather than dealing with a. …