The power of Internet will change fundamentally the way in which organisations do business. It can help to boost revenues, cut production cycle times and costs, improve customer service and broaden market share. Interactive relationships with customers and suppliers enable new products and services to be delivered faster and better at a substantially lower cost. To date the major benefits from the Internet include improved internal and external communications. The Web has specifically brought a new marketing medium and enhanced information resource. There are other benefits too as email and file transfer functionality. Web utilisation not only gives a company Internet presence but also provides opportunities to develop and expand new services.
The interactive marketplace will significantly improve the productivity and competitiveness of all participating companies regardless of whether they are customers or suppliers. The Internet provides access to an on-line global marketplace, which operates on a 24-hour basis, with millions of customers and thousands of products and services. It also provides companies with new, more cost effective and time-efficient means for working with customers, suppliers and development partners.

The interactive marketplace is a highly personalised one, with every consumer’s experience being unique-bringing with it the advantages to business of one to one marketing. Businesses in this marketplace can anticipate the customer’s requirements, and can in fact evolve their offerings in tandem with the growth and changing needs of the customer’s family. The customer, in turn, inhabits an environment of extraordinary flexibility, able to wander free, to be guided by experts, or to explore the marketplace with people having similar interests.

A range of complementary, maturing technologies support the construction of this interactive marketplace networks supporting increased bandwidth to the customer; ever-faster processors and methods to combine multiple processors to act in concert; advanced messaging; security and encryption; streaming media; Internet telephony; neural networks; profiling systems; and smart agents. But the viability of the interactive market has less to do with technology than with content, with little commitment to fixed assets, with short product or service life cycles, and with the essential ability of buyer and seller to interact directly and intimately.

It’s easy to see that the interactive marketplace, which mirrors the physical marketplace, will make it easier for companies to transfer information, and make financial transactions quicker and more efficient. The real point about business on the Internet is that it allows completely new ways of doing business to develop.

“The real revolution is going to happen in the consumer space.
It is here that the business systems have to change most dramatically and traditionally assets can become completely worthless.
Previously unthinkable models, combining ‘high delivered value’ (convenience, product range, service)
with ‘low price’, not only become possible, but are expected.
For example the built-to-order approach to personalise PCs or customise clothing,
where the avoidance of time-perishable stock makes the economics work.” (Birch, Gerbert & Schneider, 2000: 3)

The interactive marketplace will enable companies to:

shorten procurement cycles through use of online catalogues, ordering and payment
cut costs on both stock and manufactured parts through competitive bidding
reduce development cycles and accelerate time-to-market through collaborative engineering and product implementation
gain access to world wide markets at a fraction of traditional costs

The interactive marketplace allows companies to move from mass marketing to mass customisation.

Through E-Commerce five major trends will have an impact on business. Companies will: (Linder, n.d.)

Extend and accelerate familiar business models – changing business dynamics in the process.
Change channel partner relationships.
Shift focus towards services.
Establish new frontiers of sales and service efficiency.
Expand global trade.

Extend and accelerate familiar business models – changing business dynamics in the process.
Change channel partner relationships.
Shift focus towards services.
Establish new frontiers of sales and service efficiency.
Expand global trade.

The table below compares traditional, early web and dynamic commerce. (Linder, n.d.)

Business Overview	Traditional	Early Web	Dynamic Trade
Value Proposition	Product	Information	Service
Speed	Weeks	Days	Minutes
Scope	Local, regional	National	Global
Products and Services
Product Attributes	Seller-selected	Seller-selected	Buyer-selected
Prices	List	List	Market
Production	Presale	Presale	Post-sale
Service Availability	9 a.m. to 5 p.m. weekdays	24 x 7	24 x 7
Daily Consumer Interactions	100s	10,000s	1,000,000s
Value Creation
Focus of Marketing	Product Position	Customer acquisition	Customer Retention
Customer Relationship	Standard	Targeted	Customized
Strategic Asset	Location	Visibility	Customer Database
Source: Forrester Research, Inc.

Table 2.2 Traditional, Early Web and Dynamic Commerce

As seen it is critical for the retailer to understand the new interactive market place. It offers a lot of opportunities, but also challenges especially because the customers get stronger and stronger position.

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Kunnskapskilden – E-Business

Kunnskapskilden – E-Business – E-Business, E-Customer, Relationship and Interactivity

Dissertation The E-Business, the E-Customer, their Relationship and Interactivity

Jan Vig

Dissertation av Jan Vig om E.Business, E-Customer, Relationship and Interactivity (286 sider) i forbindelse med Masterstudie i Information Technology and Communication Juni 2000.

The E-Retailer Business, the E-Customer, their Relationship and Interactivity

Table of Contents

Chapter 2

Business in Cyberspace

2.4

The interactive Marketplace

Dynamic Trade

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Kunnskapskilden – E-Business –
E-Business, E-Customer, Relationship and Interactivity

Dissertation
The E-Business, the E-Customer,
their Relationship and Interactivity

The E-Retailer Business, the E-Customer,
their Relationship and Interactivity