Online Stores Research Paper

Total Length: 940 words ( 3 double-spaced pages)

Total Sources: 2

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Online Stores Offers Competitive Advantage

Comment by Sabina:

In an unstable economy such as our current economy every business must seek a competitive advantage. Our economy has suffered a recession in the last few years, many people have lost their jobs, families have lost their homes and disposable income has disappeared. All business must develop a strategic business plan to gain a competitive advantage, allowing them to stay in business and establish success. In this paper I will discuss how offering online services and online stores have a competitive advantage in the market.

Stores that are fully online can keep overhead cost low. Online businesses do not have to pay rent for space, and in many case they can keep cost lower without additional expenses. Store front business has many expenses such as electricity, insurance for the location and many other expenses. Online stores require fewer employees since the business is operated from a website. Since online stores can keep their cost low, they can then pass on the extra savings to the consumers giving them the competitive advantage.

Online stores offer a great competitive advantage to busy customers. Customers who do not have the time to go shopping or price shopping can go online and find the product they are looking for. Customers can gain information about the product, different brands available and find the best price. Customers can make their purchases online, and it will be shipped directly to their shipping address of choice.
This is a great competitive advantage for busy customers, they get all the service they are looking for at the best price available. In 2007 when the economy was heading downward the companies that did the best in sales were the companies that utilized online sales strategies (Lindsay et. al., 2008). Analyst believes that consumers are looking for new web technologies and online retailing.

The growth of technology also affects businesses. Technology today is much more advanced than ten years ago. Consumers can gain information about products and services through a variety of mediums, most of which are not controlled by the manufactures, stores, retailers or businesses (Edelman, 2010). Consumers are gaining information from social media websites, from blogs, customer feedback websites and many other methods. Stores that operate online are attempting to reach customers on a level of higher technology. Consumers today are utilizing a high level of technology; therefore stores must utilize a high level of technology to meet the consumers as well. Stores that operate online are reaching out to consumers who utilize technology for shopping purposes.

Online stores have a great competitive advantage which is known as the 'funnel metaphor' (Edelman, 2010). Marketers utilize the funnel metaphor to describe what happens when a customer goes online to conduct product research. The consumer begins the search at a wide end of….....

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