Nowadays, rapid changes have been taking place in the business environment especially in technology. There are an increased number of internet users across the globe. Occurrence of such changes in the tastes and preferences of the customers and technology forces businesses to adopt online or e-commerce business model instead of traditional brick and mortar outlets. In order to establish a new business, it is requisite to gather information related to the changes taking place in the business environment where the business has to be set up. Nowadays, entrepreneurs plan to establish an online business as customers prefer to shop online rather than visiting to the traditional retail outlet. This is because; online business provides them convenience to receive products and services at their doorsteps by placing its order online (Phan, 2003).

In addition to this, online businesses also provide them opportunity to either make the payment for the goods ordered online or can also make the payment at the time of delivery. Besides this, customers can also compare the products of different companies in terms of features, price, time of delivery, discounts offered and return policy. For example, e-bay offers online auctions of products and services. It acts as a middleman between sellers and buyers who bids and sells the products on the marketplace of e-bay.  The company uses PayPal, payment system through which the sellers and buyers can easily make the payment of the goods and services. Besides this, there is also a requirement of understanding the needs of the customers by the company in order to make decisions related to the products and services to be offered to the customers. It is essential for the companies to make significant investments in establishing strong customer relationships. The company offers vouchers and issue membership cards in order to encourage them to make repeat purchases. Along with this, e-commerce businesses also provide 24×7 customer support in order to resolve the queries of the customers in a quick and convenient manner (Comb, 2004).

Customers can provide feedback on the site which is reviewed by the employees and strategies have been formulated by considering the feedback in order to provide high quality products and services to them. This in turn helps in achieving high level of customer satisfaction. Keeping track of the trends in the tastes and preferences of the customers facilitates in providing customised products to them for the purpose of fulfilling their needs and demands. Nowadays, companies provide opportunity to its customers to provide the requirements regarding the features to be added in the product in order to provide tailored products to fulfil their needs. This helps in attracting large number of customers. This helps to achieve a competitive advantage over its competitors. Provision of customisation by e-commerce companies helps in gaining competitive advantage over its competitors by differentiating their products (Orlando, 2009).

Use of internet helps customers to make comparisons of the prices of the products with standard features. Along with this, it also help companies to gain insights regarding the designs and preferences of the customers as they have gained a track of real time information of the customer preferences. This helps them to stay ahead of their competitors. For example, Brook Brothers uses the information gathered from its customers to provide the products and services aligned with their tastes and preferences in the next season in order to fulfil their demands. Besides this, Oakley has met with the strong customer demand by making mass customisation offerings across different categories which in turn facilitates in increasing the return on investment of the company. Besides this, the online store named Serena & Lily offer the opportunity to its shoppers to design their own bedding combinations. Along with this, it is also requisite for the online business to provide secured online payment system. Customers are reluctant to provide their personal details on the online site dear to fear of unauthorised use of the information (Comb, 2004).

Online companies have made a secured payment system and promises customers that their information will be kept confidential. Along with this, e-commerce businesses also focus on making their websites attractive in visual terms. This helps in attracting more number of customers. In addition to this, if customers find difficulty in making use of the website for carrying out different transactions then company will face attracting customers which has a negative impact on the growth of the business. Customers prefer to shop online from those companies which has simple to use features on their websites and does not take long processing time to complete the transaction. This is the reason that it is requisite for the companies to focus on increasing the operation efficiency of their websites by managing traffic load in an effective and efficient manner (Phan, 2003).

The use of internet forces companies to lower their prices as customers can easily compare the prices of the product offered by different players in the market at no or negligible cost. This is the reason that companies have adopted a product bundling strategy i.e. offering a combination of products in order to differentiate it from its competitors and makes it difficult for customers to compare the prices (López, 2013). For example, Gateway offer computers along with its internet services in order to prevent the hurdle of reduction in the prices of computers. In addition to this, AOL has merged with Time Warner in order to provide different additional services like music and on demand television on computer, e-mail services on mobile phones with its existing services. This helps in selling the services at higher prices and becomes less expensive because it is sold to the existing customers. This results in reducing the threat from substitute products and competition in the market (Comb, 2004).

Along with this, use of internet for offering products and services to customers also results in reducing the cost of the business due to elimination of the middle man. In addition to this, it also provide opportunity to businesses to collect information from the customers regarding their tastes and preferences in order to provide them customised products for which they are ready to pay high prices. This results in increasing the sales and profits of the business and helps in achieving a competitive edge over its rivals (Evans, 2014).

Besides this, e-commerce companies also expand their product lines by sharing the activities and transferring of the skills such as distribution and promotion. This results in reducing the cost and increasing the profits of the business and thereby achieving a competitive advantage over others. This also helps in achieving economies of scale as sharing of the activities leads in effective and efficient use of the resources of the company such as technical expertise, market information and knowledge. For example, Amazon sells personal computers to its customers by holding no inventory and shipped it to the customer directly from the distributor. This also results in saving of inventory holding cost. In order to differentiate the products and services offered to customers, companies adopt a dialogue based marketing through which companies provide information related to products and services to customers along with the collection of the information from them and engaging them in data mining. This helps companies to customise the products as per the needs of the customers so as to fulfil their needs. This results in building strong and profitable relationships with its customers which in turn helps in attaining a competitive advantage (Combe, 2012).

In addition to this, provision of the opportunity to customers to share their experiences related to the services and products purchased from the company on the website helps in attracting more number of customers. This is because, reviews of the existing customers helps in creating an image in the minds of new customers regarding the company or the brand.  Companies such as Amazon and Dell Computers have implemented affiliated programs in order to track the purchases made by the customers and attain potential customers. Along with this, it is also requisite for the e-businesses to deliver products and services to its customers in an effective manner (Behesbti, Sangari and Engstrom, 2006). For this purpose, there is a requirement of fully automated distribution warehouses by the e-businesses so as to meet the demands of the customers through internet. For example, Amazon has made investments in physical assets in order to distribute its products in an effective manner in order to compete with Barnes & Noble in an effective manner (Orlando, 2009).

Besides this, e-businesses can also attain more number of customers by increasing the search engine optimisation. It is requisite for the e-businesses to display the name of the company in top search results by the use of some specific keywords. This helps in increasing the ranking in the search results. Along with this, another factor that helps companies to attain competitive advantage is the use of appropriate design of the sites. In addition to this, it is also the requirement of the e-businesses to focus on certain issues that can be faced by them such as access of the information electronically by the hackers and security issues related to transferring of the corporate information. It is essential for the organisations to adapt to new technologies in order to increase the operational efficiency of the websites (Pilinkienel, Kurschus and Auskalnyte, 2013). This helps in attracting more number of customers as they get faster response to their queries and requirements.

The companies also required providing training to its personnel related to the skills and expertise required to perform different tasks electronically for the purpose of dealing with is stakeholders such as suppliers and customers to achieve high level of satisfaction. This in turn results in building strong brand image and capture large market share.  Businesses can reach large number of customers across the globe by going online. In addition to this, entering into strategic alliances help businesses to expand their product line which also helps in providing economies of scale which in turn helps in increasing its profitability. Along with this, due to increase in the number of online companies, it is requisite for the companies to deliver the products and services to customers in less time in order to reduce the switching cost. Besides this, nowadays companies also provide effective return policy to customers in case if the customers are not satisfied with the features provided in the product as mentioned on the website then it can be returned back and replace it with the defined requirements (Comb, 2004).

Along with this, e-businesses also adopt viral marketing in which the links of the online sites is given on the web pages of other companies. This helps in increasing the credibility of the businesses. It also helps in creating a positive brand image among the customers. This helps in providing a competitive edge over its rivals. This promotional technique has helped in increasing the reach of the e-business to large number of audiences in microseconds (Azadi, 2011).

It can be concluded that increase in the use of internet by the customers compe companies to adopt online business model as it facilitates customers to make order online and receive products at their doorsteps. Besides this, it also provides opportunity to customers to make comparisons of different products offered by different companies virtually in terms of features and prices in order to make purchase decision. It facilitates in increasing the sales and profits of the company. It is also summarised that e-commerce businesses also track the information related to the tastes and preferences of customers and customise the products aligned to it in order to get high level of customer satisfaction. Online businesses such as Serena & Lily offer the opportunity to customers to customise the products as per their needs. This results in building profitable customer relationship which helps in attaining a competitive advantage over its competitors. Thus, it can be said that along with the maintenance of the profitable customer relationships, there is a requirement to consider other aspects as well by online businesses in order to gain competitive advantage.

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