Advantages and Disadvantages of Internet in Business

Advantages and Disadvantages of meshing in Business50 familys ago tribe started exploitation the earnings in the world. With the development of earnings, thither arisen m or so(prenominal) accessories by the meshwork. The Taobao website is angiotensin converting enzyme of the commonly used websites in mainland China, Which plays a steer agency in Chinese e-commerce industry. People buy products online through Taobao. The Taobao Company made epoch-making profits in recent years. In this report, it is going to let out the advantages of development the Internet in Taobaos line of descent. in the kickoff voice. In this part, the report refer about the Taobao gross domestic product contribution, new management mode build up and stock opportunities provided. In the second part, the report illustrates that the disadvantage of utilise the Internet in Taobaos business, in this part of view, the report points out the time-wasting, risk in profit deceiveping and negative im pacts of business efficiency. This essay aims to analyze the advantages and the disadvantages of development the internet in Taobaos business.The advantages of exploitation the internet in Taobaos businessThe first advantage is the gross domestic product contribution by Taobao internet business. fit to the online auction bridge statistic from Chinese Ne bothrk In prep areation Center (CNNIC) in 2006, there were only 12.27 million internet users in Beijing, Shanghai and Guangzhou which atomic number 18 the top lead cities in China. The data which included 3.3 million hatful who experienced the internet online dealingss. It shows that there are huge internet-shopper populations in China, especially for the economic-booming cities. Taobao plays a leading role in e-commerce industry and gain hoi polloi of loyalty guests, closely of willing to introduce Taobao to their friends who attempt to go shopping in the internet. downstairs the large user volume, Taobao gives the rea son why it can create GDP increasing. consort to the data from 2008 China Online Shopping Report, Taobao occupied 67% of Chinese C2C market in 2005. Furthermore, in 2007, it owned 70.4% of online customers. Taobao could have more than 10 million RMB businesses only in one month. Taobao could bring more than 1 billion RMB to Chinese GDP. As the income, expenditure and output influence the GDP increase, thus, with Taobao development, more GDP increase could be bring. Nowadays, Taobao became an essential part of Chinese GDP increase.Taobao started Chinese internet shopping business model. Hoskins (2002) points out that the internet is absolutely cheaper than other traditional media. The internet market can subvent the only world customer. The internet business may generally replace the traditional businesses. Because Taobao belongs to e-commerce, the communication of the system of rules is not as same as those companies who operate in a specific space.In order to desex communicat ion sufficiently under business operation, Taobao is forced on the triplet main areas of management. First, Taobao create an online communication withall which is called Aliwangwang for Taobaos buyers and sellers. According to Trites (2008), Aliwangwang, which is ranked as the most satisfied service of Taobao, because the third party is unnecessary for the communications surrounded by sellers and buyers? Second, Taobao projected a new feedback system. Li el at. (2007) display that the sellers will give the feedbacks within a period of 14 days, the sellers write up will be influenced by buyers feedbacks. If a seller got 10% displease feedback, the system will shut down the booth in two months.(Source Research on Chinese C2C E-Business Institutional Trust Mechanism gaucherie Study on Taobao and Ebay.cn, 2007)In the figure 1 which displays above, it is clearly shows that the feedback chemical mechanism in Taobao. All sellers in Taobao have to be evaluated by this feedback data, if any sellers more than 30% negative total negative feedback data, it means they could anomic the chance to do business in Taobao. Third, the design of Taobaos website is attractive, the fashionable website design style incessantly catch young peoples eyes, even a part of elder customers are willing to suffer Taobao because the website design style. Taobao divided products into incompatible categories, such as men, women, baby, and electronic products. After click the guild link, the customer can find more details for the selling goods. It is easily and efficiently to find the products what they want.According to China Economic Analysis (2002), China has 7% unemployment rate almost reached the national unemployment rate warming level. Taobao provided job opportunities to the unemployment population. According to Li el at (2009), Taobao provided more than 600 thousands job opportunities. Among 570 thousand people enjoyed the employment chances provided by Taobao. Many sellers i n Taobao traded their business as their careers and many of them had better lives depends on Taobao business. Under the stiff competition, there are a large of unemployment people with business vision but cannot find a job in top business companies. They use Taobao to fulfill their dream, some of them have their own clothes manufacturing factory after they started business in Taobao. For example, in 2009, the unemployment in Jiangsu Province located in the south of China has serious unemployment rate which shows 3.09 %. The data from the local government shows that Taobao offered 5.7 million job opportunities directly and more than 10 million job opportunities indirectly. Such as the development of Delivery Company, the needs of preservation employee must be increase.(Pan, 2001)The disadvantages of using the internet in Taobaos businessYoung people blow over too much money on Taobao internet shopping. Because the selling prices in Taobao are cheaper than in the other places. Accor ding to Pan (2001), pricing has a noteworthy influence for selling goods but with negative coefficient and absolute value. Because buyers cannot identify the goods visually, the game price goods are laboreder to sell. Beside, Majority of young people cannot afford the steep price products which are sold in other shops. For this reason, they prefer to shop at Taobao. Moreover many sellers on Taobao, who work as part-time, overhaul too much time on their business. When they concentrate on their Taobao business, their assignments form the company maybe delays.It is difficult to avoid the risks for the seller and buyer on Taobao. Kiang el at. (2009) discovers that the buyers have to accept the high risks for purchasing online. For this reason, this leads to a significant obstacle in internet commercial business. Credit witticism fraud problems, is caused by people who make business on the internet, are continuously increasing. Only after information flow, capital flow and logistic s ideal backflow, the business deal could be regarded as a completed transaction (Zhang, 2008). For the sellers risk, they have to responsible for some missing goods, even though the delivery companies compensate 50% of goods price. For customers risk, it is hard to post customers some electronic devices. Meanwhile, this genial of products is easy to be broken down. If the customers discovered the damage of the products, after they beget broken goods, they could not return the goods to the seller.The internet shopping makes the efficiency of Taobao decrease. According to Ray (2002), the organisational effectiveness has a significant influence on recruiting talented people and company development. According to Worthys (1962) organizational structure theory, there are two organization structural performances which are the flat organization structure and the tall organizational structure. Whatever the organization belongs to, the communication is always the important part of organiz ational development. Taobaos employees are separated in the whole of the world. The communication betwixt employee and superior is difficult that the other companies. Even though when some problems arise, the employees can use the internet to communicate with Taobao headquarters. Because of the long distant, plenty problems cannot be solved immediately. Taobao have no too much hierarchical management level, but personally, it belongs to tall organization structure because the communication hard to transmit to the top manager as fast as possible. For this reason, the organizational effectiveness could be influenced. The talented people could be affected by companys performance. Taobao could loss the technical support from those talent people.ConclusionThis essay analyzes the advantages and the disadvantages of using the internet in business. The essay uses Taobao e-commerce website as an example. Based on the data from eight resources, the essay divides the whole article into two pa rts, the advantages of using internet in business and disadvantage of using internet in business. To psychoanalysis the reason why Taobao could rapidly increase in resent year and gain more market share. For positive influences, the first the report shows that Taobao is commit to increase the Chinese GDP under large internet user number, and then the report analyze the new management mode travel rapidly and management in Taobao. The last, decrease the unemployment rate in China be point out in the essay and how Taobao plays a key role in this social problems. In negative aspect, many people spend too much time and money on online shopping, because the young people do not how to balance their finance. Besides, internet business brings more risks between sellers and buyers, the report introduce the risk could arise in which aspect. Furthermore, internet business could influence the effectiveness of Taobao, the report analysis the reasons and explain the relationship between the tal ent people and organization efficiency.