Introduction
The recent phenomenon in all industries is a continued shift towards adopting e-commerce as a business strategy in order to compete effectively and still achieve business objectives. E-commerce is generally described as the act of buying and selling services and commodities through electronic means i.e. internet. Being an aspect of e-business that can be looked at as a business strategy that firms are adopting in carrying out most of the business obligations, e-business has been looked at as one way that e-business can be implemented by business firms. E-commerce has changed perspectives in terms of jobs in various sectors such as agriculture (Slovenia, 2001), as well as investments.
The agricultural industry in New Zealand gives a typical case study that can be used to analyze the effects of e-commerce on any industry’s growth. When it is projected that e-commerce will significantly change the shape of business-to-business trade in the agricultural industry in New Zealand, several approaches can be used to analyze the possible effects. Although it is possible to analyze the impacts of e-commerce on agriculture, data and information sufficient to do this may not be available, and this hampers the analysis (The International Development Research Center, n.d.). This only represents a fraction of the limitations of such an analysis. An analysis can be done to the decision-makers in the industry, agricultural and food products, business processes, firms as well as the interaction that results in the marketplaces, the structure of the market and the overall change in the economy due to the changes in the agricultural industry being witnessed. A workable plan to analyze the effects may be proposed to follow the following steps:
- Technology level and network externalities
- Business process level
- Market level and intermediation
- Role of government
Change in Technology level and network externalities
To analyze the effects of e-commerce in the agricultural industry in New Zealand, an examination of the changes in the technology right from the point of production to the point of selling of the commodities to the consumers. While looking through this approach, it is possible to find out how the e-business has enables interrelation of different firms with each other in matters concerning sharing of information, the level at which consumers have been allowed to engage in businesses with the firms electronically, as well as the impact of such changes as compared with the results obtained when firms had not established roots in using e-commerce as a way of implementing e-business strategy (Kauffman, n.d.).
Business process level
In analyzing the effects of e-commerce in this approach, one should try to find out the extent to which business forms have tried to forge customized products that particularly attract their customers to purchase their products. In this case the analysis should be done on how the customer’s preferences are communicated to the firms through the internet. In addition this approach looks at how business firms are able to design higher quality goods and be able to sell to the customers at a higher price than its competitors and still maintain its market share, (Kauffman, n.d.).
Market level and intermediations effects
In the analysis of the changes in the market, there are a number of aspects that require to be looked at. First, the productivity gain which is the changes in the level of productivity that is proposed to be due to reduction in the prices of inputs. This aspect also involves the farmers being able to compare the market prices to be able to make choices on where to sell their products and through which channel. Secondly, the effects can be analyzed by the ability of the market to maintain margins or the extent by which margins are eroded. Thirdly, market effect can be analyzed by considering the market power. The introduction of e-commerce is projected to cause market power erosion of the agri-business firms since consumers will now be able to compare market prices and probably order from overseas. Lastly, the effect of e-commerce can be analyzed by looking at the new business opportunities being created or eroded for both local as well as overseas businesses dealing with agricultural commodities, (Ministry of Agriculture and Forestry, n.d.).
Role of government
The involvement of the government in controlling the agri-business firms as a result of e-business can be considered as a way to analyze the effects of e-commerce on these business firms. This can be due to regulation on businesses, formulation of legal framework and coordination activities. The information in procession of government agencies can give good information on the effects of e-business on the agricultural industry (Ministry of Agriculture and Forestry, n.d.). The impact of policy on both e-commerce and agriculture is an important aspect of analysis in this respect (The International Development Research Center, n.d.).
References
Kauffman, R. (n.d). Electronics and Electronic Commerce: Survey and Directions for Research. In Impacts of E-commerce and Information Technology on Global Agricultural Markets: Implications for Research Priorities, Policy Issues, and Data Needs. Web.
Ministry of Agriculture and Forestry. (n.d.). Analysis of policy implications. Ministry of Agriculture and Forestry. 2010. Web.
Slovenia, B. (2001). The Employment Impact of eCommerce and the Global ‘New Economy’: What does it mean for Jobs, Workers and Unions? Web.
The International Development Research Center. (n.d.). Impact of policy on development of e-commerce in Vietnam. Web.