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  Abstract: Small and middle enterprises play an important role in the international economy and social development, and governments attach much importance to them and adopt various policy measure to help them develop. This paper introduces basic concept of small and middle enterprises and e-commerce, characters of these enterprises,benefits that e-commerce brings and analysis on e-commerce of these enterprises abstractly and feasibly. And then, on the base of analysis on the development of SMEs e-commerce transaction cost theory, it is discussed that e-commerce can reduce the cost of small and middle enterprise"s commerce. Finally,it analyses the feasibility to improve e-commerce for small and middle enterprises.
  Key Words: Small and Middle Enterprise E-Commerce Strategy Style
  
   1、ANALYSIS OF E-COMMERCE DEVELOPMENT OF SMES IN CHINA
  Small and middle enterprises play an important role in the international economy and social development, with more and more attention from the world, and governments attach much importance to them and take various policy measures to help them develop. In China, SMEs have become the important base of economic development, market prosperity and employment expansion, accounting for half the rate of economic contribution. In particular, with the growing group of SMEs, it plays an prominent role in stimulating economic development, optimizing industrial structure, increasing revenue and employment opportunities, prospering urban and rural markets, helping farmers increase income, maintaining social stability. According to statistics, it is reported that 99.3% of Chinese enterprises ale small and middle ones,which offer 55.6% of GDP, 74.7%of industry production value,58.9% of social sale, 46.2% of revenue and 62.3% of export quantity[1].In the central macro-policy context, each province pays more attention to small and medium enterprises. In order to meet diverse market needs, and further grow the enterprise, SMEs are also looking forward to improve conditions of the financial, information, personnel, technology, and management. As information technology develops and social information environment becomes mature, the information technology tools highlights in the development of SMEs. To enhance their level of information becomes SMEs’ inevitable choice of competition and challenge, and an important strategy to promise a sustained, rapid and healthy development for SMEs.
   2、THE CONCEPT AND CHARACTERISTS OF E-COMMERCE
  2.1 The concept of e-commerce
  Although e-commerce is growing at incredible speed to penetrate into people"s daily lives, so far there is no fixed definition. Divergent views of governments, academics, businessman which are according to their position and level of participation in e-commerce, they given many different interpretations to e-commerce, the following is a few more representative and authoritative definition:
  International Chamber of Commerce held The World Business Agenda for Electronic Commerce in Paris in November 1997. Experts and representatives give an authoritative concept of e-commerce: Electronic Commerce refers to the entire trading process in various stages of the electronic trading activities. From the coverage area it can be defined as: Parties to the transaction in electronic trading exchange rather than any form of commercial transactions through face to face or direct interviews conducted. From the technical aspects it can be defined as: e-commerce is a collection of multi-technology, including the exchange of data, access to data, and automatic data capture, etc. E-commerce services covers information exchange, pre-service, marketing, electronic payment, transportation, the formation of virtual enterprise, the methods of company and trading partners can jointly own and operate a shared business[2].
  American scholar Ruiwei ? Kara Dakota and Andrew ? B ? Whiston say that e-commerce is a modern business method to improve the quality of products and services, increase speed of service delivery to meet governmental organizations, manufacturers and consumers by reducing cost in "the forefront of e-commerce". This concept is also used through the computer network to find information to support decision making. Generally speaking, today"s e-commerce is connecting the information, products and services of buyers and the seller through the computer network, however, the future composition of the information superhighway through the numerous computer networks in a line will link buyers and sellers.
   European Parliament gives the definition is: E-commerce refers to conduct business activities by electronic means, which electronically processes and transmits data, including text, sound and images and involves many activities, including e-commerce goods and services, online data transfer, electronic funds transfer, electronic stock trading, electronic shipping documents, commercial auctions, collaborative design and engineering, online information, public goods available, etc. HP Company believes that e-business simply refers to all aspects of the service from pre-sale services to post-sale support become electrification and automation. IBM"s views that e-commerce refers to the activity which use digital electronic data exchange for business, is a correlation emerged dynamic business activities which in contact with the Internet"s vast wealth of traditional information technology systems in the context of combined resources,
   2.2 Features of e-commerce
  E-commerce is different from traditional commerce, which advantages are obvious. Enterprises can not only directly contact with thousands of new users, and transact through the network, to reduce operating costs, improve operational efficiency, and to increase profits, but also exchange information and cooperate with the trading partners at any time, and enhance inter-firm alliances, improve product competitiveness. Compared with traditional business methods, e-commerce have the following characteristics.
   2.2.1 Streamline the circulation
   E-commerce needs not set wholesalers, stores and shopping malls, customers order products directly from the manufacturer through the network.
   2.2.2 Saving shopping time, and increasing customer choice
   E-commerce provides a wide range of choice for a variety of consumer demand through the network, also can make customers buy the satisfied goods with staying at home.
   2.2.3 Accelerating cash flow
   The cash don not flows outside customers, wholesalers, shopping malls, but directly through the network within the bank account, which greatly accelerate the capital turnover rate and reduce commercial disputes.
   2.2.4 Enhancing customer and vendor communication
   Customers can explain their needs through the network, order their favorite products, manufacturers can quickly understand user needs, to avoid the waste of production[3]
   2.2.5 Jointing and stimulating competition among enterprises
   Enterprises understand the opponent"s product performance and price through the network, so as to promote technological transformation of enterprises, and to improve product competitiveness.
   3、SMES IN DEVELOPMENT E-COMMERCE TRANSACTION COST THEORY ANALYSIS
  On transaction cost theory, Coase, Williamson , Chueng and other economists have different explainations:
  3.1 the Coase Theorem
  Coase was thought as the founder of transaction cost economics by the public, his paper “nature of the enterprise”(1937), using a series of cases to explain transaction cost economics, Coase summarized the transaction costs as follows: the cost of finding the price and the cost of negotiating and signing contracts.
   3.2 Williamson"s transaction cost perspective
  Williamson gives the transaction costs a more detailed elaboration in his “market and the management hierarchy” (1975). Williamson thinks that the transaction costs in advance includes drafting, negotiating and maintaining a agreement costs, after-transaction costs include: the costs when the transaction deviates from the requirements of the guidelines due to meet; the controversy cost which is in order to correct the deviation from the guidelines after the bilateral efforts made; the cost which from establishment and operation of the regulatory agencies,; the mortgage costs to ensure effective security. Williamson also pointed out that the cost of the product or service is composed of production costs and transaction costs, and transaction costs consist of a monitoring, control, management composition of transaction costs. When manager made do-or-buy decisions, he should consider the cost of production and plus transaction costs.
   3.3 Chueng’s transaction costs view
  Steven Cheung pointed out that transaction costs can be seen as a series of system costs, including information costs, bargaining costs, the costs of development and implementation of contracts, property rights define and control the cost of supervision and management costs and changes in the cost structure of the system in "economic organization and transaction costs". In short, it included everything which not appears directly in the process of material production costs.
   SMEs in developing e-commerce can effectively reduce transaction costs: procurement is a complicated, multi-stage process. E-commerce makes it possible to purchase online, and greatly reduces the cost of procurement, enterprise and collaborative relationships between suppliers has also been further strengthened. Through e-procurement, companies and raw material suppliers, sub suppliers, contract manufacturers, joint manufacturers and third party logistics services, packaging companies to establish collaborative, interactive business relationships. Secondly, e-commerce allows businesses released worldwide product information, promotional corporate image, organizations, online promotions through their own website and e-mail, making potential customers to deepen the understanding of the product , can also be corporate LOGO and renowned website advertising links, and to allow "one to one" relationship marketing. Compared with traditional marketing methods, these marketing have obvious cost advantage. Thirdly, enterprises orders processing system, and order tracking, order processing becomes more efficient, the cost has been greatly reduced through the establishment of automatic on-line. Of course, the company"s own income will naturally increase. Finally, enterprises and their suppliers, customers, the flow of information between supply chain is the key to the efficient operation. Enterprise communicates with suppliers, customer by the applications such as EDI, e-mail, which greatly reduces the cost of supply chain information flow.
   4、FEASIBILITY ANALYSIS OF E-COMMERCE FOR SME DEVELOPMENT
  4.1 The effect to enhance international competitiveness of SMEs by developing e-commerce
  First, e-commerce provides substantial new market opportunities for SMEs. Through e-commerce network, companies can publish their product information, promotional and corporate information about the image, and introduce information pages to meet customer demand. Through e-commerce can enhance enterprise’s connection with suppliers, customers, gather information on commodity supply and demand, the use of information superiority to accelerate internal good sand capital circulation. Particularly in the widespread adoption of information technology, improving of industrial management, SMEs bring new products faster to market than large enterprises to. Secondly, e-commerce for SMEs improve economic efficiency. Through e-commerce network can perfectly combine demand and sales, purchasing, manufacturing, insurance, transportation, banking clearing, freight forwarding, customs and other trade sectors, and automate the entire process of the business. Enterprises which adopt e-business will greatly reduce its management fees and operating expenses. Foreign enterprise applications that use e-commerce tools can make the cost reduced by 5% to 10%. E-commerce for SMEs keep abreast of market and customer needs, business processes to reduce business operating time and trade management costs, improve service quality, reduce inventory costs, accelerate cash flow, thereby enhancing the economic efficiency of enterprises[4]. Third, e-commerce promotes small and medium enterprises to adapt market changes better. Modern computer networks combine production and manufacturing activities to make it closer to market demand, which helps to improve agility and adaptability of the production. E-commerce also has changed the competitive state, the poor SMEs can play advantages in a wide range of competitive. A small business has small punch, but through e-commerce, its influence and marketing power will be greatly enhanced and easier to adapt to market changes. Finally, e-commerce promotes business to change management organization. Reform of the e-commerce and computer network information transfer mode; type it into the horizontal by the class. Transmit the original important middle organization much less important, senior decision makers who can perform direct contact with the grass roots, they can make decisions based on the actual situation in a timely manner. Detailed divisions of labor management organizations have been unable to meet the needs of e-commerce development, the interrelated management has become a trend to integrate the organization, and such organizations will enable companies to greatly improved management efficiency.
  4.2 The need for SMEs to develop e-commerce
  Although SMEs plays an important role in the development of the national economy, the SMEs in their own disadvantages such as poor marketing, poor management, small scale, low ability to withstand risks make them develop difficultly. However, if SMEs fully take their advantages of low cost and price, e-commerce, they can gain a firm foothold in the fierce competition market.
   4.2.1 Need a fair opportunity
  For SMEs, the Internet is a very effective tool because it provides the same scope for competition for businesses of all sizes, it changes the conditions for market access, to get more profits which primarily possessed by large enterprises monopolized market. Implementation of e-commerce makes SMEs and large enterprises can get the same information sources, thereby enhancing the ability of market budget and final accounts; through online advertising, SMEs eliminate the huge advertising costs; through the formation of "virtual enterprise ", SMEs can overcome their defects of small scale, finally developed to a strong enterprise in every aspect of production, design, marketing, finance, management, and win the competitive advantage.
   4.2.2 The need to gain a greater living space
  E-commerce has been around world, so information can be passed on the Internet without restriction. SMEs had been limited in the import and export rights in the past, they can’t engage in international trade. Because the characteristics of e-commerce, SMEs to lay a solid foundation for them, and to win more living space for international trade.
   4.2.3 The need of reducing operating costs and increasing efficiency
  E-commerce greatly reduces financial and material consumption, their operational costs. Setting a e-business marketing costs high, but maintenance costs little, if it develops and utilizes effectively, it can be offset the cost of business-related products system, storage, distribution of information collection, processing, storage, retrieval. Through the network, customers can order products through the online payment. Before the goods prior to electronic settlement, thus increasing cash flow for the company to ease the financial difficulties of SMEs[5]. In summary, e-commerce can not only provide SMEs with a large number of new market opportunities, help SMEs to improve economic efficiency, which brings many advantages to the development of SMEs, but also brings fair competition opportunity to the SMEs in the fierce market competition. In short, the development of SMEs e-commerce is not only feasible but necessary.
  REFERENCES:
  [1]Machinery Industry Ministry of Science and Technology Information Research Institute of Integrated Information compiled, "U.S. Small Business Act". Beijing Machinery Industry Press,1987:2
  [2]Xiao Chen.American Micro-economic Mechanism. Peking: Peking University Press,1995
  [3]Lin Jue. U.S.Market Economic System. Lanzhou: Lanzhou University Press,1994
  [4]Wu Zhenguo.Western Business Overview of the Legal System. Beijing:Legal Press,1985
  [5]Zhang Kexian.A Selection of Japanese SMEs Regulations. Beijing:Law Press,1985

标签:commerce Analysis Feasibility Middle