Page 231 - Business Principles and Management

Unit 3

Small businesses can benefit competitively from the use of the Internet due to
the rapid exchange of information. For example, several small automotive parts
retailers can consolidate their orders through an e-business wholesaler by sub-
mitting information on needed parts via the Internet. Then the wholesaler can
place a very large order with the manufacturer and receive a significant price
reduction for each of the retailers. This can be done almost instantly with online
order processing. In addition to the lower costs, the needed parts get to the retail-
ers quickly, rather than taking days and weeks under older purchasing methods.
The Internet has proven to be an important tool in reducing the cost of sev-
eral business activities. A recent government report identified the following cost
savings to businesses when customers used the Internet:

Ordering airline tickets 87% savings
Online banking 89% savings
Paying bills 67% savings
Distributing software 99% savings

CHECKPOINT
Describe the three main business uses for the Internet.

9.1 Assessment

UNDERSTAND MANAGEMENT CONCEPTS
Circle the best answer for each of the following questions.
1. How many people are online around the world?
a. 600 million
b. 1 billion
c. 1.5 billion
d. 3 billion
2. The Internet can improve business operations by facilitating
a. logging on by salespeople to a company’s Web site
b. gathering information for research reports
c. communicating with customers
d. all of the above

THINK CRITICALLY
Answer the following questions as completely as possible.
3. Briefly describe the history of the Internet.
4. Describe how the Internet is changing business
communication.

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