- Firms are increasingly engaging in electronic commerce to gain competitive advantages such as improved customer service, improved supplier relationships, and increased returns for stockholders.
- Electronic commerce can be defined narrowly as online business transactions with customers and suppliers. The main benefits firms expect from electronic commerce are improved customer service, improved supplier relationships, and increased returns for investors.
- Initially, firms were hesitant to adopt electronic commerce due to high costs, security concerns, and immature software. However, these constraints are decreasing over time as technology advances and becomes more affordable and secure.