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To What Extent Is It Inevitable That Businesses That Fail to Invest in E-Commerce Will Lose Market Share to Competitors That Do Invest? (40 Marks)

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To what extent is it inevitable that businesses that fail to invest in e-commerce will lose market share to competitors that do invest? (40 marks)

In this essay I will be discussing the extent to which businesses that do not invest in e-commerce lose market share to competitors that do invest. E-commerce is the trading of business online rather than through physical stores. There are several businesses that trade solely online. For example ASOS, whereas most businesses trade online as well as owning physical stores, these include Topshop, Next, etc. I will use these businesses to discuss to what extent is it inevitable that businesses that fail to invest in e-commerce will lose market share to competitors.

One reason why it is inevitable that businesses that do not invest in e-commerce will lose market share to competitors that do invest in e-commerce is because of the improvement in technology. Several years ago when the Internet didn’t exist or when it was very limited, in order to succeed businesses had to own physical shops, as they were the only way of selling their produce. However, nowadays everyone has the Internet, therefore it is not always necessary for a business to own physical shops as customer can purchase items using their computers, which is much quicker and easier than searching through the shops, the Internet also opens up their target audience, allowing them to target a variety of ages. Therefore if a business does not invest in e-commerce then they will lose market share because customers would rather shop online to find what they need than go to a store and search through to find what they need. An example of a business that has failed because they did not invest in e-commerce is HMV. HMV failed to recognise and adapt to the way their target market was shopping, online. Due to this, HMV were forced to shut down several of their stores

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