The Impact of Web-Based E-Commerce on Channel Strategy in the Agricultural Sector

Essay from the year 2012 in the subject Business economics - Trade and Distribution, , course: Economic of Branches, language: English, abstract: Over the past decade, no other medium has changed our current lifestyle or the way we conduct business more than the emergence of the internet since the invention of television. The Internet enables firms and companies to do business on a more advanced level. Now it is possible to shorten distances even further, enhance the ability to communicate and transact across geographical boundaries and thereby reduce or eliminate transaction costs. Since the internet already represents a new infrastructure, it has a strong impact on business organizations. The importance of web-based distribution channels has rapidly surged and web-based distribution channels have become an integral part of the channel strategy of businesses across the globe. Transactions like buying, selling, delivering or contracting seem to be potential incentives for a conversion to e-commerce. The following three factors: (1) industry structure, (2) product complexity, and (3) the complex nature of business processes within the firm, play a crucial role when it comes to e-commerce in the agricultural sector. The main objective of this paper is to analyze these dominant factors in order to find out in what ways web-based e-commerce is affecting the channel strategy in the agricultural business. At first, the paper will give a short literature review in which the most important terms will be defined. Second, the role of distribution channels will be discussed in order to develop an understanding of how important the channel selection decision is. Third, the channel strategy of web-based e-commerce and its potential benefits will be illustrated. The fourth chapter analyses the three dominant factors that have an impact on the adoption of web-based e-commerce in the agricultural sector. Finally, in the fifth chapter, based on the preceding chapters, the strategic implications for agribusinesses will be drawn. A conclusion will bring this paper to an end.