the internet and its effect on business (examen primera parte)

8/7/2019 The Internet And Its Effect On Business (examen primera parte)

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The Internet And Its Effect On

Business

Ma. Daniella Garcia A.

Friday, July 30

th

, 2010

Writing

Teacher: Alberto Mahuad-

Campodnico

Coordinator: Yamne Fayad

Liceo Los Andes

2010-2011


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INDEX

Opening Statement4

I. Electronic Commerce..4A. New ways of doing business..5

1. E-care2. Bitability and e-commoditization

B. Emerging principles of electronic commerce ..61. New principles of commerce2. Electronic commerce is changing the face of business

C. Problems in search of solutions..6

1. Privacy issues present a different set of challenges 2. New methods of establishing order, efficiency, and decency

will have to be created

II. Subcategories7A. Business-to-consumer (B2C)..8

1. Use of internet and e-mail to substitute a catalogue2. Save money and reduces costs

B. Business-to-business (B2B).81. Business between companies2. Buy and selling of goods and services

C. Consumer-to-consumer (C2C).9

1. Selling the product that I want to sell 2. Mercado Libre

III. Social Media..10

A. WhyCare...10

1. Is the largest media that people use around the world 2. Many people think that every company should have a

presence in social mediaB. Dialogue not monologue11

1. Social media playtime is over2. Public relations, customer service, loyalty-building,

collaboration, networking, thought leadership and costumeracquisition

C. Opportunities.12

1. Dont assume social media is the answer to everything 2. Listen, engage and measure

Closing Statement..13


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INDEX

Opening statement14

I. Andres Vera (coordinator of the administration area in theschool)..14

A. About e-commerce.15

B. E-commerce and business16

C. Social Media and characteristics..16

II. Ricardo Garcia (constant buyer in internet) .17

A. Internet and e-commerce18

B. E-commerce and its characteristics.18

C. Buying in internet..19

III. Jorge Manzo (Owner of the company FUMITEC, he offers the

companys services by internet) .19

A. About e-commerce20

B. E-commerce and business..21

C. E-commerce in your company.21

Closing Statement22


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Background

Introduction

Since internet appeared in United States, the world has witnesses many

changes. It first appeared in 1969, many thought that it was stupid to try to

communicate with other computer by the red. But what they didnt know is that

internet, with the pass of the years, will become the most important technology

and the most famous media. All the continents in the Earth use internet. In

United States, 3 of 4 people use this media. Every day more people join this big

world that offers us many advantages. The best thing is that everyone can use

it, from kids of 5 years until our grandparents and more. With internet you can

talk with someone who is in the other side of the world, you also can see that

person through a webcam. You can find information about any topic you want

to. You can even watch TV in the computer because with the new technology

the signal reaches interne. There are so many advantages that if I name all of

them I would never finish. But one of the most striking benefits is the e -

commerce which is an on-line market where we can buy any kind of products or

services.

E-commerce

E-commerce is the buying and selling of goods and services on the

Internet. It is an open market where you can find an extensive catalog of

products and services that you can buy. This commerce has changed and

improved the bussines of many markets. This happened because of the way

internet is accessible to many people around the world. It is a comfortable way


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of buying what you want because you can do it from your house without going

to a mall. You just have to give you credit card number and the company where

you bought the product or service, will deliver it to your home. Obviously this

benefit has a cost but many people dont care about that because who wouldnt

pay the cost of a good service in the door of your house. E-commerce has

saved many companies from bankruptcy. 77% of people, who use internet, buy

on-line to save time or to avoid tiredness looking for the products that they want.

New ways of doing business

The marketing, advertising, and care triad are the core of the

phenomenon. One to one marketing is very useful for doing business. With a

data base in internet, companies know every person who is using internet, so

they know who they can send their advertisings because they will know the age,

preferences, likes, occupations, interests, and more about every person. This is

called e-care. Companies care about the people who they are selling their

products or services. Whit this service people feel attended because they know

that someone is caring about them.

Two major factors affect the speed of change in terms of product: bitabilit y and

e-commoditization. The company has to see if the product is bitable or not. It is

bitable if it can be selling on the internet, if it is not, you cant sell it in the

internet because people wont care about your product. On the other side an e -

commodity is a product that we dont need to touch, see, try on, or taste before

buying. It is a product that you just buy on line and you have the guarantee that

this product is going to be delivering in your home in a certain time and safe.


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Emerging principles of electronic commerce

An entirely new set of principles of commerce is emerging. First is the

realization that internet is giving way to a place where information is abundant

and eyeballs limited. Second is that technology is giving things away for fr ee,

not protecting software against privacy, and paying for visitors. Third, the

meaning of the words competitor and industry are changing. Now-a-days both

are one's competitors and one's allies. Finally, pricing models are changing and

are creating new business models. Technology gets most of the credit in the

business, but successes are usually based on the triad of: technology, business

model innovation, and a family of facilitating services. Electronic commerce is

changing the face of many businesses because of three dominant facts:

(1) disintermediation, to take out the money in the banks to invest in order to get

more money; (2) re-intermediation, when an electronic intermediary is between

the buyer and the seller; and (3) cannibalization, when busines s give up their

traditional business and gets into the superior electronic model. An important

fact is also the entire world is connected to internet so everyone have access to

this commerce and also it is easy to use so a person of any age could be in thi s

market.

Problems in search of solutions

The security problems of the e-commerce infrastructure have been well

publicized: Viruses, security intrusions, and inability to provide services because

of volume attacks. Every day many people try to gets in the system of many

organizations, to cheat many people to win money. The same technology that


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facilitates business activities and provides wonderful services is also a major

threat to individual freedom. Every company has a database where they save

important and specific information about every client, like information about the

family, address, purchases, banking activity and more. This information

provides advantages in the time of making new products and marketing

because the company knows the life of the clients, what are their preferences,

where do they like to go, etc. so they can make a product or advertising directed

to and specific group knowing that it will call the clients attention. But this also

brings disadvantages because hackers always try to get into the database and

steal all this information. Many companies are trying to solve this problem by

adding more security to the databases. But as everything in life, it is no easy.

So companies should unify to make only one database for everyone so there

will not exist the need to steal information.

Subcategories

E-commerce has reached many markets. It flows more in developed

countries but developing countries also get benefits from this. You can apply e -

commerce in any business you want, from little companies to big industries.

You can sell tangible products or services like music and softwares. E -

commerce is considered one of the most important changes in all times

especially for companies that want to reach a bigger market by using new

technology. In Ecuador, e-commerce is not used very well because companies

dont know how to use it and get benefits of it. Also, the government doesnt

give support to the companies. However it could be very useful in our market

because, with its variety of categories, it is applicable in many ways. E-

commerce is divided in three categories: B2C (business to consumer), B2B


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(business to business), and C2C (consumer to consumer). Below I will explain

you each category so you can understand each one.

B2C

B2C or business to consumer or client means the way that companies

reach directly the client or consumer by internet. The producer sends a

catalogue by mail to the client so he can choose the products that he wants and

the amount. So the producer saves money sending a catalogue and also saves

time because the consumer has more access to choose in a faster way and the

order gets faster to the company. B2C is applicable to financial institutions that

have a direct relation with their client by internet. B2C has a lot of advanta ges

like: the purchase is usually faster and more comfortable; the customer service

centers are integrated into the web; telecommunications have improved

experience, the offers and prices are always actualized, and much more.

Amazon.com was one of the pioneers of B2C but now a days this web page has

a lot competition like ebay.com, yahoo.com, and mercadolibre.com. In Spain in

2007 there were more than thirty one million of transactions making online

business the principal way of making business and buying commercial in the

country. And this happens in many countries in the world because e -commerce

is reaching and trespassing many borders in the world.

B2B

B2B or business to business is the negotiation between companies

trough internet. Companies could exchange information or databases of clients,

business markets, products, and more. This is one of the most promising

concepts financially in internet but it is a big challenge for the companies that


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want to use or test this method. The costs of the companies depend on this

method because of the delivery of the products and other things. Is extremely

complex involving countless trans-actions along the supply chain. B2B offers

strong possibilities to reduce transaction costs, enhance sales and distribution

processes, deliver and consume value added services and streamline customer

management. This method also helps buyers and sellers to find and meet each

other on a safe place or area so they can commercialize between them. Without

B2B market buyers could have great difficulty in finding suppliers with the right

qualities and prices, and suppliers could have difficulty finding buyers that want

their products. Some of the advantages that companies have for using B2B are:

speed and security for communications; direct integration of database into the

computer systems of the company; possibility of receiving more offers or

demands, increasing competition; less commercial visits; the process of

negotiation is faster; and more.

C2C

C2C or consumer to consumer is the method where you can sell your

product in any place or web page. This is an easy method where companies

could start, by selling their products in web pages an d they slowly gets into the

market they want and in the future they might get recognized and grow as a

company. Geographical and physical barriers disappear in this market. The

purchase and sale of products or services are reduced to a simple mouse click.

C2C users have a big market that can be separated in many categories that

consumers are looking for in web pages. In the web, exists two recognized

pages, these are, mercadolibre.com and ebay.com. In these pages you can sell

your product to any of the users that are registered or not in the pages. This is


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how it works: you make your product, you take a photo or photos and make and

account in one these pages and you upload the photos and information about

you and product. Then any person can see this and contact with you and you

make the transaction and you sell your product. Easy as that. This is how little

companies start their business and little by little they grow.

Social media

Social media is the social interaction between the societies using

technology. Businesses refer to social media as user-generated content (UGC)

or consumer-generated media (CGM) which are various kinds of media content,

publicly available, that are produced by users of internet. Social media have

been modernized to reach consumers through the internet. Social media have

become recognized to big and small businesses. Many recognized companies

and brands are utilizing social media to reach customers and to build or

maintain reputation. With social media, companies are able to reach ma ny

countries that use internet, trespassing borders and getting to developing

countries. Social media have become the new "tool" for effective business

marketing and sales. There are a lot of web pages that reach big social Medias

like Facebook, Twitter, MySpace, and others, where you can find users of any

age and from any part of the world. Social media is very important when you

want to make a business.

Why care

As I mentioned before many people use internet in the world so

companies should care about social media because with this, they can reach a

big market around the world. 3 of 4 Americans use social technology and a of


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the global internet population visit social networks. Also, visiting social sites is

now the 4th most popular online activity, ahead of personal email. The most

popular social media is facebook. Is facebook were a country it could be the 8 th

most populated country in the world, ahead of Japan. So this is where

companies can get clients of different cultures and traditions that may be

interested in the products that are selling. You can also put you advertisement

in facebook and many people can see it and at least know about your product,

with this you are getting clients and recognition. 93% of social media users

believe a company should have a presence in social media, so clients want

companies to advertise them about their products. And thats when companies

uses databases, they can separate or organize the users in categories so

companies will know which advertise they can send to a person knowing that

this advertisement will call this person attention.

Dialogue not monologue

Many companies that are in social media just send and send

advertisement to the users. Sometimes, users think this is good because they

are letting the client, know about the product, but others think this is totally

annoying. I believe that no one wants to receive every day many advertise of

products. Many time clients actually dont get to understand the advertisement

that companies send so marketers should care about what they send. This is

what frequently happens in companies: the people in charge of talking are in the

marketing department, the people in charge of listening are in the research or

service or sales department and they hardly ever talk to each other. So if the

marketing department doesnt know how people will receive the information

they are sending they should talk with the department that is in charge to listen


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what the costumers think. The thing is not send information and information

about the product; clients want to talk with the company so they feel care, that

the company cares about you. Companies should stop sending a lot of

advertisement and start caring about what their clients think about the product.

If companies do this, there would be more dialogue between the consumer and

the producer.

Opportunities

Social media brings many opportunities for the ones that use this. As I

mentioned before, many people in the world uses internet and of these, uses

social media. So if I want to sell my product via internet I should use social

media because I can reach many people. Another opportunity that social media

brings is that companies can get to know what users want. So companies can

create a product which is based in the preferences and likes of the users and

they will be sure that the product is going to be sold and reach many people.

Companies can also meet other cultures around the world so they will know to

whom send the advertisement. Other opportunity is that social media creates

competition between companies. As you know thousand of brands are

registered in internet so companies got a lot of competition. But this is good for

users, because they got different choices and companies will try to call your

attention offering better products and services. Social media brings a lot of

opportunities and companies who use e-commerce should take them. Many of

them dont know how to use tem and in most of the cases they fall.


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Conclusion

Internet will become, with the pass of the years, the most famou s media

in the entire world, it will improve in many ways. One internet advantages is e -

commerce. E-commerce is the buying and selling of goods and services on the

Internet. It is an open market where you can find an extensive catalog of

products and services that you can buy. Is a way of doing business that has

revolutionized the economy in many ways. You can apply e-commerce in any

business you want, from little companies to big industries. You can sell tangible

products or services, whatever you want to. Companies and organizations have

reached many markets with e-commerce. E-commerce is divided in three

categories: B2C (business to consumer), B2B (business to business), and C2C

(consumer to consumer). Social media is the social interaction between the

societies using technology. This is where companies send the advertisement for

their products and where they get their clients. Companies should care about

their clients to see if they are conformable with the product or service that they

are paying for. There is a lot of competition in internet so companies will offer

more and better offers to the clients, because this will have many choices.


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Field Research

Since internet appeared it has changed many things in the world, giving

use many advantages and facilitating almost every camp in our life. Now a days

it is so easy to contact a friend or a family member that is in the other part of the

world, just by using messenger or hotmail, when less than 70 years ago it was

so difficult to contact someone who lived in a different city than yours. Internet

has not only facilitated the way to communicate, it has also given us the

opportunity to be connected with the entire world and, with just a click, I can see

the news of France, China, and so on. But of the most effective advantages of

internet is e-commerce, which is the buying and selling of goods and services

on the Internet. This gives us the opportunity to buy any product we want in the

internet. It is so easy, companies put in their web pages catalogs fr om the

products or services that they sell, we choose the one we want, and then we

pay with a credit card or with a transaction from the bank. Then in a few days

the product is in our house. This way of making business has revolutionized

economy because it has increased immensely the sales of many companies.

Andres Vera coordinator of the area of administration in Liceo Los

Andes and teacher of business.

I interviewed Andres in his desk in the office of the school. It was full of

books and papers. The office was kind of noisy because many teachers were

there making or correcting exams, there were also some students asking for

grades or doing something else. The secretaries were making their job, calling


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the principals, making circulars, etc. Andres is an experienced teacher. He

studied Administration in the university and has been a teacher for 16 years. He

knows a lot about administration, economy and actual topics that are around the

world. He is always trying to learn more and more about actual topics and about

what he teaches. Andres knows a lot of e-commerce because once he tried to

make business in this market, so he has investigated a lot about this. We had

almost no interaction in the interview because he had the questions in his

computer. Below I will explain everything he told me about e -commerce.

About e-commerce

According Andres, e-commerce is one of the best ideas, is a way to

reach more clients getting to an international market. If you are trying to sell a

product, but in your country is not demanded, maybe in others country like

France, Taiwan or other places it is demanded. It really opens markets because

now a days we live in a globalized wor ld where we have a computer who is from

an American brand but its parts are from different countries like Hong Kong,

Korea, Brazil and others. You can sell your product creating a web page and

uploading you product. You have to promote and publish it in ot her web pages

related to your product. You can pay to famous searchers like google to publish

your web page. E-commerce has given very good results. When it first started

it wasnt so efficient but now it is manageable. Andres thinks it is a safe way to

make business but he also said that is has a lot of spam or there are web pages

that try to steal money from people by offering false business. He thinks that

there should exist the goodwill in e-commerce which is the desire to make

things right.


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E-commerce and business

E-commerce has increased economy because it creates new

opportunities of jobs. It creates new jobs for people that in their country, maybe

dont exist. It also may be dangerous for poor countries were the manufacture is

cheap or the exchange rate is less than its originating country and that

companies will be making competition in the country they entered. Andres

thinks that e-commerce has changed the history of the organizations and

business because of all the technological advances and because we live in a

globalized world. Today any company can sleep thinking that locally they are

strong when we have a dynamic and changing market. In Ecuador we dont

have a dynamic and changing market because we prefer the traditional things,

we resist to the change. We have to actualize our topics and be constantly

innovating. He thinks that international business and e -commerce push us to

improve, to look for better standers, for better products and innovate it. He

doesnt think that e-commerce can save a company who is in bankrupt because

e-commerce is a support tool that helps us to reach global markets. He said that

e-commerce had change the way of doing business because know we have to

think big, think global not local.

Social Media and characterist ics

Andres said that e-commerce has reached a huge social media. Today

we have social pages like Facebook or twitter which are not only social pages,

but also are commercial pages where people take advantage and promote their


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product and their business get s to have more publicity than they expected.

According to Andres there an international organizations that pay taxes for their

web pages. He doesnt know a lot about this but he knows that when we buy a

product and we bring it to Ecuador we have to pay some taxes in the airport.

The first things to consider when starting an online business is to think about

the business: if it is a good idea, if we got a market for the idea, we have to

make a market research locally or in foreign countries. Visit internati onal pages

related to you business, to visit what we call the Cmara de Comercio of

Europe or United States and check what are the product that people is

demanding. The important thing is to make a product that you know that it going

to be striking in the market you are planning to sell. Andres think that, in the

future, e-commerce will be more aggressively, he thinks that there have to be

more regulation in what it exposes because there are many advertisements that

people click on them but they are reall y spam and virus.

Ricardo Garcia Constant buyer and user of e-commerce.

My uncle, Ricardo Garcia, gets nervous in front of cams, so he asked me

not to film him, just only to record his voice. I interviewed him in his office. He

owns a gas station, he shares it whit his brothers but he administrates it. He is a

very busy man, he also is an engineer in airplanes, he works in Taca, he is the

man who checks the airplane before the plane takes off. The interview is a little

short because he had a meeting with some people, so he talks little and with

specific answers. I interviewed my uncle because he is a constant buyer of

products on the internet and he think that e -commerce gives us many

advantages and id the best.


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Internet and e-commerce

My uncles uses internet all the days. He believes that internet has

facilitated many camps in our life; one of them is that we can get information

about many aspects and topics. E-commerce is one of many facilities that

internet offers, it gives you a large catalogue of many products and services

from any part of the world. To enter in this big commerce, or to use it, is very

easy, you have to search on the pages that sell products what you want, look

for different pages that offer the same product so you can see the various prices

on the web and chose the one you consider is the best and more convenient for

yourself. He said that e-commerce definitely increases the sales of a company. I

researched why e-commerce increases the sales and I realized that is because

the company, not only sells their product in the local, it also sells in the internet

and in a massive way.

E-commerce and its characteristics

He thinks e-commerce is efficient if it a safe web page. We need to be

sure if the page is not virus or if someone is trying to cheat on us, before we

make any payment or transaction. He said that this way of selling is safe if we

follow all the protocol or steps that the web page requires. Normally a page

requires, if you are paying with a credit card, to put the number of the credit

card, the personal information of the owner and they always ask for the

direction or the house or place that you want the product to be shipped.

According to him, e-commerce has completely revolutionize economy because


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you can get any product or service you want, at the prices that you want and

are reasonable for you, and in any place you want. He considers that the best of

e-commerce is the availability and the variety of products you can find in the

entire world. He would add to his commerce the description and information

about the products because he considers that is minimal.

Buying in internet

When he buys in internet he usually buys electronic devices and stuff for

his house. I asked my cousins if he buys anything else and they told me that he

also buys shoes and baseball stuff for my cousins because the play baseball.

He considers that the prices are low because you dont need to have a store for

the public; you only present your product electronically and in that way the cost

reduces because you dont need personal neither a physical structure and you

can offer a better price. He said that the only problem he has with e -commerce

is how the product arrives to his house. The thing is that he buys products in

web pages from the United States beca use you can find better prices than

Ecuadorians prices, so every time he buys something he has to look for

someone who is coming to Ecuador so that person can bring the product he

bought. He also said that the shipping cost in the United States is low so it is

good to buy there. He thinks that in the future e-commerce will evolves, as

everything evolves in the world, e-commerce should evolve in a simple, faster,

and secure way so there will be a better commerce and a better development in

all the products.

Jorge Manzo owner of the Company FUMITEC who offers its service in

internet in a web page.


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I tried to interview Jorge Manzo, the owner of FUMITEC, a company that

is in charge of the urban pest control in Ecuador. For several reasons he was

out of town so I couldnt talk to him, but he answered my questions via e-mail.

He is my fathers cousin so he let me to go to the plant where they keep all the

pest and products for the work. It is not a big place, they dont have a lot of

machinery. They got like 15 cars so they can transport to the different places

that they have to fumigate. I also entered in the office. It is kind of big, they got

like 5 secretaries, and each of them do different jobs. The sister of Jorges wife

is the person in charge when Jorge or his wife are not there. FUMITEC works

with important and big companies all over Ecuador.

About e-commerce

Jorge thinks that e-commerce is one of the best options that internet has

given to us because we got the opportunity to buy and sell products and

services in any part of the world, letting companies to enlarge their markets,

having more clients. He said it is very efficient because it is easy to use and any

person can use it. The most of the time it is safe, every person, before making a

purchase, need to know if the page is trustable or not, because now a days

there are a lot of cheaters or hackers that want to steal money to innocent

people, so you have to be careful where you buy. He believes that e -commerce

has increase economy in many ways. The companies that sell their product in

internet increase their sales because they are not only selling in the store, they

are also selling in internet in foreign countries. He said that with the

technological advances that we can see every year, e-commerce will be much

better. We are going to be able to see the products in 3D, there is going to be

more options to pay, more offers and more variety of products and more things.


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E-commerce and business

Jorge considers that is important for companies to have web pages, in

fact he thinks is essential for companies to have web pages, because web

pages help companies to be recognized not only in the country where it is from,

it could be recognized also in other countries. He believes that with web pages,

companies can enlarge their market, they can get more clients, and in the same

way, they can clarify any doubt they got about the product or service. Web

pages facilitate information to the costumers. When we want to introduce to e -

commerce we have to consider some facts: we need to know if our product is

viable or not because if no one is going to buy our product why we are going to

spend time and money promoting something that no one wants. We also need

to know if the product we sell is accepted in the culture of the country we are

introducing, because we are not going to sell swimsuits for women in Iran,

where they are not allowed to show their body. We have to investigate the

market and the economical, social, and political situation of the country. We

also have to investigate if we have some competition. E-commerce is changing

the way to make business because years ago, if we wanted to make business

with someone in the other part of the world we had to send a letter or go to that

country. Today I can make a videoconference and talk with a manager of

Germany sitting on the desk of my house. E-commerce soon will get into all the

markets in the world.

E-commerce in your business


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Some of the products I use for my company are bought in internet, others

I bought them in Ecuador and others in different parts of the world. Jorge said

that e-commerce has made his page recognized. He has increased the sells

with the web page. He paid some recognized web pages to put a link and adds

of this company and thanks to this he was recognized in Quito, Cuenca and

others. He had to open another store in the Sierra to supply the demand of the

habitants over there. It is easy to contact us in our web page. There is an

option that says CONTACT us, where you click it and other pages opens, and

you put some personal data and you can ask anything you want about the

products and service, you will receive a soon answer. It is important to all the

web pages to specify the service you offer because then, if you dont do that,

people will not understand or get interested about what is in my page. Today if a

web page is not striking people wont care about it.

Conclusion

The 3 people I interviewed think that e -commerce is very useful and is

one of the best things about internet, and is true. It off ers many opportunities to

a lot of people. It creates new places of job. It opens markets. It is amazing

what we can get with technology. I have learned that web pages are important

to companies because they can help these organizations to get clients in m any

parts of the world. I can buy a product in internet in a lower price that I buy it in

a store but I always have to be careful because the page could be a cheat. We

can choose any product in a reasonable price. Web pages can help companies

to increase their sales and to be recognized. We live in a globalized world

where we can get a product from any part of the world.

the internet and its effect on business (examen primera parte)

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