A

PROJECT REPORT

ON

“A STUDY OF ANALYSIS ON BUSSINESS TO BUSSINESS E-COMMERCE AS AN

ECONOMY BOOSTER”

OF

IN PARTIAL FULFILLMENT FOR

MASTER OF MANAGEMENT STUDIES

SUBMITTED BY

MISS. ASHWINI SUBHASH CHAVAN

OF

MMS (HUMAN RESOURCE)

UNDER THE GUIDENCE OF

PROF. DIVYESH NAGARKAR

THROUGH

MADANBHAI SURA INSTITUTE OF BUSINESS MANAGEMENT, KHED

BATCH (2018-2020)

1
 Certificates

This is certify that miss Ashwini Subhash Chavan has submitted the project report, titled “A
STUDUY OF ANALYSIS ON BUSSINESS TO BUSSINESS E-COMMERCE AS AN
ECONOMY BOOSTER” as completed as per the requirement’s the two years full time masters of
management studies(MMS)course of Mumbai university for IV semester of the academic year 2018-
2020.

Date

Place

2
 Prof. Divyesh Nagarkar Dr Prasad Bhanage
Project guide Director

ACKNOWLEDGMENT

It is my greatest pleasures to acknowledge sincere gratitude towards Prof. Divyesh Nagarkar for
their valuable advice, co-operation and support in completion of my project. I am thankful to him
for helping me to make this project. Finally I would like to thank all lectures, friends and my family
for their kind Support and to all who have directly or indirectly helped me in preparing this project
Report. And at last I am thankful to all divine light and my parents, who kept my Motivation and
zest for knowledge always high through the tides of time.

3
 Index

Sr.No Table of contents Page No.

1. Executive summary 6

2. Introduction 8

3. Company profile 9

4. Objective of study 12

5. Scope of study 13

6. Literature of review 16

7. Research methodology 26

8. Data analysis and interpretation 36

9. Findings and recommendation 52

10. Conclusion 54

11. Bibliography 55

4
 Declaration

I miss ASHWINI SUBHASH CHAVAN of MMS Sem IV at Vishwakarma Sahajeevan Madanbhai

Sura institute of business management Khed, hereby declare that I have completed my summer
internship project entitled “A STUDUY OF ANALYSIS ON BUSSINESS TO BUSSINESS E-
COMMERCE AS AN ECONOMY BOOSTER ”, as partial fulfilment of the recruitment of the
course curriculum of the academic year 2018-2020. The data collected and the work done by me is
truly authentic and is it not borrowed or copied from any dissertation report. The project contains
true and complete information

5
 Executive summary

Electronic commerce (e-commerce or EC), most will think of it as using the Internet to help the
business market and sell its products and/or services. But in reality, e-commerce is much more than
that. Generally, there are 2 kinds of e-commerce; business-to-business and business-to-consumer.
Here, we shall look at how a business may fit into either one kind of e-commerce. The business-to-
business kind of e-commerce refers to a company selling or buying from other companies. In our
context here, the company communicates with the other companies by electronic means. This is
actually not new, as many businesses have already been doing it since the 80’s by means of
Electronic Data Interchange (EDI).The business-to-customer kind of e-commerce refers to a
company selling its products or services to the customers using the Internet as the communication
medium. This is what most people think e-commerce is about.

6
 ABSTRACTS

This chapter will cover different aspects of online markets and online marketing in the business-to-
business (B2B) environment. It will provide an overview of the essentials of e-commerce in B2B
markets. The focus will be on Internet marketing issues and the coverage will span B2B goods and
services. Other topics in the chapter include Electronic Data Interchange (EDI), B2B exchanges,
Internet-Enabled Service Innovations (IESIs), Internet-enabled hybrid offerings, and international e-
commerce. The chapter will present the major B2B e-commerce theories and frameworks,
summarize the current knowledge base in B2B e-commerce and the opportunities for further research
on the topic.

7
 Introduction
Reliance Industries is India's largest private sector company on all major financial parameters. In
2004, Reliance Industries (RIL) became the first Indian private sector organization to be listed in the
Fortune Global 500 list. The company operates world-class manufacturing facilities across the
country Reliance Industries' activities span hydrocarbon exploration and production, petroleum
refining and marketing, petrochemicals, retail and telecommunications. The petrochemicals segment
includes production and marketing operations of petrochemical products. The refining segment
includes production and marketing operations of the petroleum products. The oil and gas segment
includes exploration, development and production of crude oil and natural gas. The other segment of
the company includes textile, retail business and special economic zone (SEZ) development. In the
year 1966 the RIL was founded by Shri Dhirubhai H.Ambani, it was started as a small textile
manufacturer unit. In May 8, 1973 RIL was incorporated and conformed their name as RIL in the
year 1985. Over the years, the company has transformed their business from manufacturing of
textiles products into a petrochemical major.

8
Company Profile

9
Mission:-
 To attain global best practices and become a leading power generating company.

 To achieve excellence in project execution, quality, reliability, safety and operational

efficiency.

 To relentlessly pursue new opportunities, capitalizing on synergies in the power generation

sector.

 To consistently enhance our competitiveness and deliver profitable growth.

 To practice highest standards of corporate governance and be a financially sound company.

 To be a responsible corporate citizen nurturing human values and concern for society.

 To improve the lives of local community in all our projects.

 To be a partner in nation building and contribute towards India’s economic growth.

 To promote a work culture that fosters learning, individual growth, team spirit and creativity
to overcome challenges and attain goals.

 To encourage ideas, talent and value systems and become the employer of choice.

 To earn the trust and confidence of all stakeholders, exceeding their expectations.

 To uphold the guiding principles of trust, integrity and transparency in all aspects of
interactions and dealings.

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Vision:-
Goal is to fulfill the beauty and personal grooming needs of the consumer by providing innovative
products to help us accomplish success, thereby delivering greater Consumer value and achieve
sustainable growth. To build a brand that consumer trust on, by fulfilling their need through
continues improvement. Our Vision is guided by our core values. Achieving our vision requires
superior and continually improving performance in every area and at all levels of the Organization.

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 Objectives of the study:-

 To provide high quality products to its customers.

 To reduce spoilage through its state of the art supply chain & logistic network.

 To enrich customers shopping experience through customized offer private label & value for

money merchandise.

 To faster relationship with prepare that will create new of value enhancement for customers.

 To ensure fair and timely payments to factors.

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  Scope of the study:-

The scope of E-Commerce Business in India is undoubtedly going to increase year after year. A
recent report by the Internet and Mobile Association of India shows that a fast-paced growth of
around 50% is to be expected in the coming five years. The primary attribute of this growth is
undoubtedly the rise of 3G/4G mobile internet users and a large number of smartphone users because
the same mobile commerce is expected to change how business transactions happen in India. The
scope of ecommerce business is turning out to be more famous day-after-day according to the market
demand. And this requirement is generating innovations worldwide focused on delivery time, ease of
transactions and several features served by ecommerce businesses, for example, drone delivery or
artificial intelligence. This article is focused on scope, future, application and various critical factors
for the growth of the ecommerce business scope in India.

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  Limitations of the study:-

 Security

The biggest drawback of e-commerce is the issue of security. People fear to provide personal and
financial information, even though several improvements have been made in relation to data
encryption. Certain websites do not have capabilities to conduct authentic transactions. Fear of
providing credit card information and risk of identity limit the growth of e-commerce.

 Lack of privacy
Many websites do not have high encryption for secure online transaction or to protect online identity.
Some websites illegally collect statistics on consumers without their permission. Lack of privacy
discourages people to use internet for conducting commercial transactions,

 Tax issue
Sales tax is another bigger issue when the buyer and seller are situated in different locations.
Computation of sales tax poses problems when the buyer and seller are in different states. Another
factor is that physical stores will lose business if web purchases are free from tax.

 Fear
People fear to operate in a paperless and faceless electronic world. Some of the business
organizations do not have physical existence, People do not know with whom they are conducting

commercial transactions. This aspect makes people to opt physical stores for purchases.

 Product suitability
People have to rely on electronic images to purchase products. Sometimes, when the products are
delivered, the product may not match with electronic images. Finally, it may not suit the needs of the
buyers. The lack of ‘touch and feel’ prevent people from online shopping.

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  Cultural obstacles
E-commerce attracts customers from all over the world. Habits and culture of the people differ from
nation to nation. They also pose linguistic problems. Thus, differences in culture create obstacles to
both the business and the consumers.

 High Labour cost

Highly talented and technically qualified workforce are required to develop and manage the websites
of the organization. Since internet provides a lot of job opportunities, business organizations have to
incur a lot of expenses to retain a talented pool of employees,

 Legal issues
The cyber laws that govern the e-commerce transactions are not very clear and vary from country to
country. These legal issues prevent people from entering into electronic contracts.

15
  Literature of review:-

 Introduction
E Commerce stands for electronic commerce and caters to trading in goods and services through the
electronic medium such as internet, mobile or any other computer network. It involves the use
of Information and Communication Technology (ICT) and Electronic Funds Transfer (EFT) in
making commerce between consumers and organizations, organization and organization or consumer
and consumer. With the growing use of internet worldwide, Electronic Data Interchange (EDI) has
also increased in humungous amounts and so has flourished e-commerce with the prolific virtual
internet bazaar inside the digital world which is righty termed as e-malls.

 BUSINESS-TO-CONSUMER E-COMMERCE

In B2C e-commerce, businesses sell directly a diverse group of products and services to customers. In addition to pure
B2C e-commerce players such as Amazon.com, and hepsiburada.com other tr additional businesses have
entered the virtual marketplace by establishing comprehensive web sites and virtual storefronts. In these cases, e-
commerce supplements the traditional commerce by offering products and services through electronic channels. Wal-
Mart Stores, and the Gap are examples of companies that ar e very active in B2C e-commerce. Some of the
advantages of these e-commerce sites and companies include availability of physical space (customers can physically
visit the store), availability of returns (customers can return a purchased item to the physical store), and availability
of customer service in these physical stores. Figure 3.1 illustrates a B2C relationship. In the figure ISP, means Internet
service provider

 Business to Business e commerce

Business-to-Business e-commerce holds electronic transactions among and between businesses. The
Internet and reliance of all businesses upon other companies for supplies, utilities, and services has
enhanced the popularity of B2B e-commerce

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  Perceptive of term E-Commerce:-

Electronic commerce (E-commerce) as the sharing of business information, maintaining business

relationships and conducting business transactions by means of telecommunication networks.
According to him, electronic commerce approaches the end of its beginning and as it is redefined by
the dynamics of the internet. E- Commerce is now emerging from the convergence of several major
information technologies and business practices. This study was not ready to accept E-commerce as
a purely technological development. Doing business through e-commerce can be information
technologies along with organizational and management advances that pull the technology and are
pushed by it in turn. This study visualized e-commerce as hierarchical structure comprised of
several levels and each individual levels constitute three meta-levels: Technological Infrastructure,
Services: Enablers of interpersonal communication and commerce, Products and services. This
paper also pointed out some of the issues relating to hierarchical framework like limitation and
asymmetries of infrastructure, integration of electronic payment methods into buying process,
conversion of web surfers from browsers into consumers, movement of supply chains and products
into the market space and business governance. However it is clear from the readings that
expansion of commerce and technological innovations are the two levers which contribute to the
economic grow Napier et al. (2001) in his book stated that traditionally, business has been
conducted in physical building, often referred as brick-and-mortar marketplaces. When the
marketplace is electronic, business transactions occur across a telecommunications network where
buyers, sellers and others involved in the business transaction rarely see or know each other and
may be physically located anywhere in the world. This process of buying and selling of products
and services across a telecommunications network is often called electronic commerce and the
electronic marketplace is called a market space. According to this book many people use the term e-
commerce in a broader sense, encompassing not only buying and selling but also the delivery of
information, providing customer service before and after the sale, collaborating with business
partners and enhancing productivity within organizations. Some researchers prefer the term e-
business.

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  Understanding of E-Services:-
E-service is an emerging and rapidly evolving area with the advancement of technology. It is
conceptualized as a subset of e-commerce and can be demonstrated as new technological
innovation(s). E-services are today considered as the building blocks for the service oriented
architecture. E- Services as a general field of inquiry includes considerations of both delivered
service and delivery mode. It is more useful for service-based offerings that comprise information
and access to information for making more standard goods-related E-Commerce.
18
  Definitions of E-Service:-
E-service has been defined as web-based service (Reynolds, 2000) or interactive services that are
delivered on the Internet (Boyer et al., 2002). Hoffman and Bateson (1997) defined e-service is
deeds, efforts or performances whose delivery is mediated by information technology (including the
Web, information kiosks and mobile devices). Such e- service includes the service element of e-
tailing, customer support and service, and service delivery.

The need to define the service encounter is not unique to e-service, but the boundary and elements
of that encounter need to be re-visited in the e- service context. It is important not only to
understand how consumers ‘experience and evaluate the e-service delivery, but also how the
delivery contributes to the total service experience and its evaluation. The nature of the service
experience is likely to vary depending upon the activities or tasks being completed through the e-
service engagement. The spectrum of tasks ranges from information collection through customer
support to
19
  Characteristics of E-Service:-
E-service is becoming increasingly important not only in determining the success or failure of
electronic commerce (Yang et al., 2001), but also in providing consumers with a superior
experience with respect to the interactive flow of information (Santos, 2003). E-service can be
usefully conceptualized as an interactive information service. Information provided by or collected
from and about customers can be gathered and analyzed by the e-service provider, and used as the
basis for the customization of the service that the organization offers to the customer. In addition,
the online service experience integrates service delivery and marketing communications, both of
which are achieved through exchange of information (Ghosh et al., 2004). The more customers go
online to fulfil their service needs themselves, the more scalable and cost-effective the business
model (Schultze, 2003). This association between service quality and business performance has
driven interest in e-service, online service and Internet retailing. This interest has been further
fuelled by evidence of poor e-service quality in some contexts (Boyer et al., 2002; Janda et al.,
2002; Zeithaml, 2002). Zeithaml (2002) identified the need for businesses to focus on the e-service
in their e-business, and to understand the importance of e-service quality as a differentiating
strategy. E-service is technology-mediated or facilitated, and the two inherent characteristics of e-
service that emerge from the technology facilitation are recurrent themes in the literature, viz, e-
service as information.
20
  Significance of term E-Shopping and E-Retailing:-

The number of people accessing the internet and entering into commercial transactions has been on
the rise, and online shopping has been a growing phenomenon all over the world (Joines et al.,
2003; and Jayewardene, 2004). Such transactions have been witnessed for both organizational as
well as personal buying and the trend will continue to rise through online retailing.

 Definition of e-shopping/ online shopping/ e-retailing:

Inter organizational information system that allows the participating buyers and sellers to exchange
information about prices and product offerings‖. Liu and Arnett (2000), define it as, ―a way of
conducting business by companies and customer electronic have defined e-retailing in terms of the
internet market as, ―a virtual realm where products and services exist as digital information and can be
delivered through information-based channels‖. One may define online-retailing as use of an electronic media
through which the customer and the marketer may enter into a transaction for sale.

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  Customer’s attitude towards online shopping:-

The growth of online retailing is being driven by ever increasing online buyers and sellers and the
changed attitude of internet users who look for speed, promptness, convenience and better bargains.
Saving of time and effort, as also the availability of wide range of products at best prices are the
other factors which are responsible for the growth of online retailing. Online sellers can offer best
prices as they don‘t have to spend on inventory handling and maintenance cost. In spite of these,
consumers are often apprehensive and wary of shopping online due to computer illiteracy,
technological complexity and often lack of understanding of the buying/transaction process through
internet Forsythe Sandra, Liu Chuanlan, Shannon David, And Gardner Liu Chun (2006), applied
constructs from the innovation adoption process (Rogers, 1995) to explain and predict online
shopping behavior. Thus, stated that in the context of online shopping, perceptions of benefits and
risks are antecedents of consumers ‘perceptions of Internet shopping and of their online shopping
behaviors. They suggested, a sound measure of the perceptions associated with online shopping is
needed to provide a firm foundation for research to investigate the interrelationships between
benefit-risk perceptions and attitudes toward online shopping, specific.
22
  Study of the terms Customer Satisfaction and E-
Satisfaction:-
Customer satisfaction represents the customer‘s perceptions and evaluation of service performance
in terms of fulfilment of expectations, values and norms, underpinning the
confirmation/disconfirmation paradigm (Yi, 1989). Satisfaction has been shown to be positively
related to loyalty and this effect also occurs in online environment.
Product or service in terms of whether that product or service has met their needs and expectations.
Customer satisfaction is based on an evaluation of product-related standards, product consumption
experiences and/or purchase-related attributes To ensure customer is satisfied with the services, the
companies need to achieve quality not only by eliminating the cause for direct complaint but they
need to provide their product or services with excellent, attractive quality and also the delight to the
customers. Customer satisfaction is an emotional reaction after consumers purchase and experience
a product or service. These accumulative reactions have become the customer satisfaction with a
company customer satisfaction levels are positively affected by the two contributors of technology
readiness, which is optimism and innovativeness whereas discomfort and insecurity are inhibitors
that negatively influence customer‘s satisfaction towards the use of self- service technology.

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  E-Satisfaction:-
Customer loyalty is an outcome of the customer‘s overall satisfaction. Satisfied customers tend to
have higher usage of service, possess stronger repurchase intention and are often eager to
recommend the product or service to their acquaintances than those who are not satisfied. In
addition, dissatisfied customers are more likely to search for alternative information and switch to
another retailer and is also more resistant to developing a close relationship with the retailer. study
further indicates that the customer‘s satisfaction with the site‘s performance influences the
customer‘s repurchase decisions and intentions. Customer satisfaction is closely related to
interpersonal trust and is considered as antecedent of trust et al stated in their study, a positive effect
of satisfaction on trust can be expected in the online environment as well. Customers ‘satisfactory .
24
  Perceptive of the term E-Shopping Behavior:-
Analyzing consumer behavior is very old phenomenon. The renowned marketing expert Philip
Kotler has published several works on the topic of consumer behavior theories. These theories have
been used for many years not only to understand the customers, but also to create a marketing
strategy that will attract the customer efficiently. Hence understanding and identifying the customer
is closely related to the company‘s marketing strategies. These theories can also be applied to
identify the online shopping behavior and to create certain customer segments. However, some
distinctions must still be made when considering traditional consumer behavior and online
consumer behavior.
Consumer interprets and receives motivation from advertisements. The decisions of consumers are
influenced by a number of individual characteristics that are linked to the consumer‘s specific.
25
  RESEARCH METHODOLOGY:-

 INTRODUCTION
The previous chapter provides theories related to e-commerce adoption among SMEs. This
chapter presents the proposed model framework, the development of hypotheses, as well as the
selection of measures and questionnaire design. The sampling design and data collection
procedure, and the analysis technique used in this study are also explained.

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  DEVELOPMENT OF HYPOTHESES
Many past studies have advocated that the use of e-commerce positively Influences an
organization’s performance, specifically in terms of growth Financial gain and competitive
Advantage However this study is more interested in how the Misperceive those benefits.
Examples of benefits typically associated with ecommerce adoption are: increase of revenues
and profits, reduction in costs, improvement in customer service, development of new market
segments and the streamline of business operations. Therefore, hypothesis 1 reflects the
relationship described:

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  THEORETICAL FRAMEWORK:-

After reviewing all the related literature and generating the hypotheses for this Study, the
following conceptual framework is illustrated in Figure 2.1 below. The Framework consists of 8
independent variables, all of which are postulated to Affect the same dependent variable, e-
commerce adoption.

Perceived Relative
Advantage

Technological
Perceived
Context Compatibility

Perceived Complexity

E-commerce
Knowledge & Expertise

Organizational Management Attitude

Context towards E-Commerce

External Change
Agents E-commerce adaption

Pressures from
Environmental Trading Partners
Context
Pressures from
Competitors
 SAMPLING DESIGN :-

In order to collect the necessary response from a large number of SMEs, survey

questionnaires were used. To generalize the results, a sample size of 300 was targeted.

Convenient sampling is used to select the data for this research. A list of SMEs was

obtained from SME Corp. The initial plan was to randomly select 700 SMEs from the

Klang Valley region from the list. The respondents would then be contacted, either via

email or post, to the take part in the survey.

 DATA COLLECTION PROCEDURE

 Questionnaire

A quantitative survey was used to collect the primary data, by using a structured
questionnaire. The questionnaire was designed based on past researches on e-
commerce. The questionnaire was divided into four sections.
 Section A: Demographics Profile

 Section B: Organization Profile

 Section C: E-commerce Adoption

 Section D :E-commerce Adoption Factors

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 The first section (Section A) asked for the respondents’ demographics, such as gender, age,
education level and current position within the organization. This section also helped to filter
out respondents whose current position is not executive level or above.

 The second section (Section B) asked about the nature of the organization, such as
the total number of to employees and yearly revenue. The corresponding answers
are then used to verify that the respondents’ company is indeed an SME, according
to the SME definition.
 The third section (Section C) determined the current e-commerce adoption level
within the organization. Finally, the fourth section (Section D) contained questions
that represent the e-commerce adoption determinants, as described in the research
framework.
The multiple-item methods were used in the final two sections (Section C and D).
Each item was measured based on a seven-point Likert scale from strongly disagree
(1) to strongly agree (7). The odd number rating scale was adopted as it allows the
respondent to ‘sit on the fence’ by selecting a neutral statement. The final version of
the questionnaire can be viewed in Appendix.

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  Pilot Test:-

Before the commission of the survey, a pilot test of the structured questionnaire was
conducted, involving several respondents. The questionnaire was assessed in terms of ease
of understanding, logical consistencies, sequence of the items, contextual relevance and so
to enable the questionnaire to be further refined. 26 respondents from various SMEs
participated in the pilot test. Personal visits were made to managers of selected SMEs, and
they were requested to participate in the survey. Cooper and Schindler (2003) stated that
the pilot test group size may range from 25 to 100 respondents and do not have to be
statistically selected. The pilot test revealed that the average time duration to complete the
questionnaire is only 5.5 minutes, which is appropriate, considering the number of
questions in the questionnaire. All the pilot test respondents also claimed that the questions
were clear and comprehensible, indicating that the survey had a relatively low level of
difficulty.

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  Data Collection:-

Based on the sampling list, the survey was made available to the shortlisted respondents.
The questionnaire was made into an online form and its URL was sent to each of the 500
respondents that have email addresses. Another 200 printed version of the survey was
posted to the rest. However, it was discovered that unlike medium-sized enterprises, many
of the small-sized enterprises did not take part in survey, thus resulting in an overall low
response rate. Therefore, to reach out to small-sized enterprises, physical questionnaires
were then distributed in person to a number of SME’s in the Klang Valley. Field assistants
were used to carry out the survey and collect the necessary data. The locations visited
include Mara Headquarter Building in Kuala Lumpur, Kompleks PKNS Shah Alam,
Kompleks PKNS Bangi, and Diamond Square Gombak. For each company approached, the
personnel was interviewed and assisted in filling up the questionnaire. This approach was
adopted since many pilot test respondents indicated that they prefer someone to help write
down their responses.

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  DATA ANALYSIS TECHNIQUES:-

 Descriptive Analysis

Descriptive statistics were applied to summarize the demographic profile of the

respondents and the mean of each of the factors. Variance and standard deviation were
obtained to measure variability around the mean of a distribution.

 Reliability Analysis:-

The reliability of the instruments used was one of the concerns in this study. The reliability
scale text would be utilized to determine the instruments validity. According to Sage et al.
(1980), measurements are reliable if the true aspects of the trait measured, instead of the
chance aspects. Therefore, the instrument must be reliable to the extent that the scores by
the respondents should be almost equal if measurement is repeated. In order to examine the
reliability of the instruments, the Cronbach’s Alpha was used to measure reliability of the
underlying dimensions. The Cronbach’s Alpha estimate indicates how highly the items in
the questionnaire are interrelated in order to determine the instrument reliability. According
to Nunnaly (1978), the Alpha which is more than 0.7 indicates a high reliability.

33
  Correlation Analysis:-

Correlation analysis was used to examine whether there was any association between each
of the factors and the extent of e-commerce adoption. The extent of e-commerce adoption
was computed by adding the number of e-commerce applications being adopted by the
respondents, which means that the higher the score, the higher the adoption. In
determining whether the factors have any influence on the extent of e- commerce
adoption, that is to test the hypotheses formulated earlier, regression analysis was used.
For the purpose of regression analysis, the extent of e- commerce adoption is the
dependent variable while the factors are the independent variables. It was performed using
the SPSS software. The hypotheses and their relationships were tested through correlation
by individually measuring e-commerce adoption in relation to each of the factors.
Correlation analysis indicates if a linear relationship exists between two variables.
Although correlation does not indicate the reasons the relationship is present, the
correlation coefficient does tell if the relationship is significant or not. A perfect positive
correlation has a coefficient of 1.0, no correlation has 0 and a perfect negative coefficient.

34
  Multiple Regressions:-

Multiple regressions was employed to assess the significant level of each of the eight
determinants. Regression is an analysis of a predictor variable’s relationship to a dependent
variable. In this study, multiple regressions via stepwise analysis was employed. In
stepwise regression, the order of entry for variables is based strictly on statistical criteria
with an objective of determining which independent variables best predict the dependent
variable. The SPSS program selects the variables in the order of their ability to contribute
to the overall prediction. Hair et al. (2006) claimed that stepwise estimation is a powerful
and popular approach to variable selection since it assesses the contribution of each
independent variable to the regression model, based on the greatest contribution.

35
  Data analysis and interpretation:-

 DESCRIPTIVE PROFILE:-
A comprehensive survey was carried out with a sample of small and medium enterprises from
National Capital Region to check the e-commerce adoption status, process, e-readiness, use of e-
commerce, perceived advantages, barriers and the critical success factors. Two hundred SMEs
using the internet and e-commerce tools were finally included in the sample for the purpose of
data analysis from the selected area; the profile of these exclusive SMEs is shown in Exhibit 5.1.
Out of the total sample investigated, 58.00% of the SMEs were operative in sole proprietorship,
and the remaining 42.00% represented the partnership group. Another set of 64 SMEs which
were not using the internet and ecommerce tools, but operative within business sectors
considered for this study were also checked in. Thirty six large sized firms operative in the
region perceivably presenting a tough competition to select SMEs were also roped in for select
variables. Manufacturing firms and 54.5% from service sector firms. Comparing employee size,
service SMEs were relatively bigger than manufacturing SMEs. Twenty per cent of the SMEs
were with annual sales turnover of less than Rs. 5 million, 72.0% between Rs. 5 to 10 million
and 8.00% with more than Rs. 10 million. In terms of annual sales turnover, manufacturing
SMEs were relatively more capital intensive than service SMEs. Although the number of
participating manufacturing SMEs (91 enterprises) is smaller than service SMEs (109
enterprises), manufacturing SMEs were relatively bigger than service SMEs in terms of
employee size and annual sales turnover. These results indicate that manufacturing SMEs were
more capital and human intensive than service SMEs. Of the 200 SMEs, the predominance of
target markets was the domestic market. Around 60 percent of these SMEs reported their main
target as the local markets. About 11 percent medium-sized SMEs sold in both markets -
domestic and overseas. Around sixty per cent SMEs had started their businesses after January
2005, while 38.55 per cent SMEs had started their businesses before January 2005. In relation to
the number of years in business (business age), Exhibit 5.1 shows that the majority of SMEs had
been in operation.

36
  Internet and web connectivity among SMEs:-
Proprietor respondents were asked to indicate their respective firm’s present level of internet
Connectivity. About 5 percent proprietors said that they had full internet access but did not
exploit the full potential of the Web, that is, they did not have a Web page, let alone conduct any
commercial transaction on the Web. Only 64 percent proprietors indicated that they thought they
were exploiting the Web at its maximum; they had a Web page, promoted the company (SME)
on the Web, and performed transactions through the Web. A Chi-square test indicates
statistically significant differences between the size (based on annual turnover) of the company
and degree of Web connectivity (Chi-square = 14.474, p = 0.000). More than half of the
medium-sized (71.6%) and small (63.3%) firms were using internet for business purpose over
and above serving the other administrative requirements. SMEs most often used e-mail (72.7% -
medium-sized and 80.2% - small firms). Second most important usage of internet was searching
for the business information (68.8% medium-sized and 77.4% small firms). Chat was not widely
used, but smaller firms used it more often (14.8%) than medium-sized firms (7.8%). Video
conferencing was used only in 2.8% small firms. More of the medium-sized firms had Web site
(90.9%) compared to small-sized firms (59.3%). Approximately one third of medium-sized
(29.8%) and small (31.2%) firms had plans to use e commerce by the next year. However, more
than one thirds of the examined proprietors/managers both in small and medium-sized firms
thought that their firm did not possess enough information about e-commerce. As regards the
possible differences between firms having or not having firms’ Web site, the data has been
analysed according to business sector. Medium sized firms had modest connectivity. While all
medium firms used telephones, they all had less than 30 employees connected to the Internet and
less than 10 PCs in management (almost 90% have less than 5 PCs). Compared to firm size,
these numbers deem the e-infrastructure for medium firms relatively more modest than small
firms. Medium sized firms were, relatively high on owning management and production
software, in fact as high as large firms. This comes in sharp contrast to the relatively low
percentage of their ownership of marketing software.
 37

 Exhibit 1:-

Web environment is widely spread out in different firms. Approximately half of the companies
from manufacturing sector (45.1%) and service sector (52.4%) had the Web site, and these firms
were leaders in using e-commerce technology. Answering to the question “Are Web Sites
common in your industry sector? 41.2% proprietors/managers reported ‘yes’, 29.5% ‘no’ and
surprisingly another 29.4% were not even aware of the fact. Exhibit 5.3 shows the distribution of
SMEs included in the sample according to the year they created the company web site. The
figure shows that, among the firms studied, the peak in web site development occurred during
the period 1998-2001. During this period, more than 50 per cent of the firms studied adopted
internet technology and created a web site. The number of adopting firms dramatically dipped in
2002. Clearly, this period also affected SMEs’ decision to adopt e-commerce technologies.
Among the early adopters, were the real estate developers, firms manufacturing some automotive
part/s, and educational groups, consulting firms, fitness firms, health care firms, retailing firms
and firms in the entertainment sector as far as the service sector was concerned. The data not
only shows that a significant share of the studied firms have adopted internet technologies, but
also that more than 70 per cent of firms have more than five years of experience of such
technologies. Now after, 2005 again there is a huge surge among SMEs as far as the
development of individual websites is concerned.
38
 15 15

11 11 11
10 10
99 9 99
8 88 8 8
7

5 5 5
4 4

year

39
  Exhibit 2:-
There was enough indication of probable high level functionality, i.e. the ability to buy and pay
for the service/product via the Web site. Therefore the potential to capture purchases online have
been fully realised by SMEs. SMEs are becoming more and more e-commerce friendly. Based
on sophistication visualized, the SMEs can be categorized as highly sophisticated, moderately
sophisticated and lowly sophisticated considering what tools of internet and e-commerce SMEs.

40
  Exhibit 3:-

The data regarding the internet usage in the SMEs and e-commerce tools was correlated to
confirm the aged proposition that more the internet usage in the SME, more likely it is that
internet will be used for e-commerce applications. From the analysis of the e-commerce
applications, website usage and ICT applications discussed above, firms could be categorized
into two categories (i) that consider e-commerce as experimental tool supporting existing
business processes, and (ii) those firms that consider e-commerce a strategic tool to leverage new
business opportunities and benefits. The experimental SMEs can be broadly classified into two
groups. The first group of firms (n=82) embraced e-commerce with minimal resources. These
SMEs used ecommerce primarily to gain a static presence on the Internet, their web sites never
changed and often resembled electronic brochures. The firms used the Internet to publish
organizational information, contact details and information about products or services offered.
The second group of SMEs(n=68) allocated more resources and capital expenditure to e-
commerce and provided alternative trading systems or enhanced communication facilities.
However these e-commerce initiatives were not fully integrated into existing information
systems. Typically, users of these experimental e-commerce systems had to re-enter order details
and customer information manually back into existing transaction systems. The potential
efficiencies from e-commerce were significantly reduced when an experimental perspective is
taken. However the costs associated with adding limited e-commerce to the business were less
than an elaborate fully integrated e-commerce trading system. Small and medium sized firms
were found to be representative of the experimental e-commerce user group. These experimental
users of e-commerce did not consider e-commerce to be strategically important to the business
initially. These SMEs experimented with e-commerce to gain some experience and knowledge in
order to determine what contribution it can make to the organization. After experimenting with
the e-commerce technologies, if a firm envisaged a potential benefit derived from e-commerce, it
decides to commit more resources to develop a more strategic perspective for the use of e-
commerce.
41
42
  ADOPTION OF E-COMMERCE AMONGST SMES:-

The adoption of e-commerce from Technology-Organization Environment framework which

posits that the adoption of innovations depend on organizational, environmental, and
technological factors supplementing with factors as considered in other researches. Other studies
have used the TOE and one or some of the variables such as perceived benefits, top management
commitment/support, organizational IT competence. Organizational readiness in other
information systems (IT) studies), external pressure, IT vendor support, and financial resources
availability. Importantly, the acceptance of e-commerce by SMEs can also be viewed from the
perspective of almost all the aforementioned factor In the TOE framework used over time, the
dependent variable has been either adoption/acceptance, receptivity, business performance,
business value, or a combination of other relevant variables technological. organizational and
environmental factors which were operationalized with the measures as proposed Perceived
benefits” refer to the relative advantages that e-commerce can provide to the adopting over
existing practices and systems, it is to be expected that the adoption of such an innovation will
the acceptance and use of e-commerce include inter alia improved relationships with customers
and partners, enhanced revenue generation, and increased operational efficiency. Researchers
including reported that perceived benefits (relative advantage) is a strong predictor of e-
commerce and related technology’s utilization in business firms. “Organizational IT
competence” refers to the level of technical expertise to the use of information technology tools
available in the organization. The more knowledge an organization has about in small
businesses.

43
  Reasons for adopting e-commerce solutions:-

The deploying e-commerce applications were first, to expand, grow and become competitive in
their business; the SMEs see websites and ecommerce as a platform that can create wider market
reach which may ultimately lead to increase in sales, profitability and growth. Second, e-
commerce can improve customer service and help find new customers, the SMEs saw their
online presence as antidote to poor customer service and an opportunity to build large customer
base, because they can easily place an advertisement, product information and services on their
websites where it can be accessed by current and potential customers which means e-commerce
websites can run all the time. Third, proprietors of SMEs believed that their competitors have
online presence, therefore they had to create online presence so that they will not lose their
customers to rivals firms. Fourth, there is always a pressure from the suppliers and other business
partners to use e-commerce tools. Also the usage of ecommerce believably increased the
employee productivity. The proprietor/manager(s) of selected SMEs were of the view that by
deploying Internet based technologies, their staff could communicate easily, share information,
accessed information and executed their assigned task in more effective and efficient manner,
which often led to cost reduction.

45
 Percent
No Reasons of
responses
63.2
1 Opportunity to expand, grow & become competitive
52.6
E-commerce can improve customer service and help us
2 find new customers

46.8
3 Need to keep up with existing competitors
46.7
4 Pressure from suppliers and other business partners
44.2
5 E-commerce can increase our employee productivity
44.2
6 Customers demanding to deal on the internet
26.6
7 E-commerce can reduce our transaction cost
14.2
8 E-commerce can reduce the price of the product
9 13.9
Threat of large competitors taking the business

46
  Reasons for not adopting e-commerce solutions:-

The most important was the lack of fully developed and understood legal and regulatory system
that affected the utilization of e-commerce applications by SMEs. This legal framework provides
for consumer protection in e-commerce transactions, online fraud, intellectual property,
exchange rate, warranty, online disputes. Second, initial investment required for e commerce was
considered very high by the proprietors the respondents complained about high initial set up cost
involving creation of websites, hiring a webmaster, paying for internet services and acquisition
of computers in order to deploy e-commerce technologies.

47
 Percent of
N Reasons Cases
o
69.2
1 Lack of developed legal and regulatory system
68.4
2 Initial investment required for e-commerce is very high
63.2
3 Lack of necessity to business
62.1
4 Security concerns
42.6
5 Lack of technical skills
42.2
6 Lack of knowledge and experienced IT support personnel
26.3
7 Others
20.1
8 Poor Internet infrastructure
18.6
9 Lack of interest by employees
1 Resistance by people and culture 14.2
0

48
  Benefits achieved due to e-commerce:-

The comparison of large, medium, and small companies indicates that there are statistically
significant differences among them (X2 = 35.425, p = 0.000). Large companies have benefited
more or less equally from accessing a wider range of consumers (20 percent), keeping track of
customers' preferences (20 percent), and improving communication with customers (18 percent).
Among midsized companies, the most important benefit has been accessing a wider range of
consumers percent), followed by improved communications with customers (21 percent), and
keeping track of customers' preferences (18 percent). Small companies' major benefits have been
improved communication with customers (26 percent) and wider access to customers (25
percent). This study also enquired about other benefits normally reported in the literature. The
results indicate that large companies have benefited more than small companies in different
areasaccessing wider markets, keeping track of consumers' preferences, and improving
communication withcustomers. Small companies have also indicated benefiting from two of
these three benefits. Obviously, it is much more difficult for small companies to obtain benefits
from tracking consumers' preferences and improving communication with customers because of
the limitations of financial and human resources. Large companies, again have the advantage
over small companies to acquire the technology needed for those purposes and also the human
resources to support these activities. Technology and human resources require substantial
investment to maintain a fluid and real-time communication. Other benefits such as selling
directly (eliminating intermediary) were more often mentioned by large companies than small
companies, similarly with benefits associated with order processing. For all its advantages, the e-
commerce presents a lot of challenges to small businesses and it should be no surprise that e-
commerce.

49
  Cost savings as a result of the e-commerce:-
In order to investigate if cost savings widely identified in the e-commerce literature have been
realized by small companies, respondents were asked to indicate if they had achieved savings as
a result of the e-commerce applications Overall 50 percent of the SMEs indicated that they had
achieved cost saving, 9 percent said that it was not obvious, and 41 percent said that they had
definitely not achieved cost savings (X2 = 26.547, p = 0.000). Of those companies that said they
had achieved cost savings, 55 percent were classified as large, 33 percent medium sized and 12
percent small companies. The cost saving areas identified as more relevant by the total sample
reduction in paper-based systems (27 percent), reduction in customer service (25 percent),
reduction in intermediary costs (23 percent), and advertising and promotion costs (14 percent).
An inspection and statistical tests proved that there are no statistically significant differences
across groups (X2 = 3.795). Small companies named cost savings in the following order
reduction in paper-based systems (26 percent), advertising and promotion costs (22 percent),
reduction in intermediary costs (22 percent), and reduction in customer service (17 percent).
Large companies reported cost reduction also in paper-based systems (27 percent), customer
service (25 percent), intermediary costs (24 percent), and less frequently in advertising and
promotion (14 percent). Medium-sized companies experienced similar ranking as large
companies: reduction in paper-based systems (26 percent), customer service 26 percent),
intermediary costs (24 percent), advertising and promotion was mentioned only with a relative
frequency of 10 percent.

50
 Chi- square
Cost savings using the e- Larg Mediu Smal
commerce e m l
0.52 0.322 0.112
Reduced
0.271 0.500 0.221
Not obvious
0.230 0.376 0.384
Not reduced
p=0.000

Cost saving category

0.142 0.101 0.216
Advertising
0.270 0.266 0.255
Paper-based system
0.230 0.233 0.210
Intermediation
0.251 0.264 0.168
Customer service
0.088 0.058 0.044
Purchasing
p=0.70

51
 Findings and Recommendations:-

 There is no freedom to the dealers to operate an e-commerce site because the law
permits manufactures to limit the number of dealers authorized to sell their products in
particular places. Dealers may not accept such limitation without a fight if dealers
believe that they already have been afforded the right to sell on the Net.
 Manufacturers don’t have freedom to operate an E-commerce site because of the
manufacturer's individual agreements with one or more selected dealers as not to
operate an e- commercesite. It should be viewed as a vertical management and be
lawful. However if a manufacturer were to agree with a group of dealers that the
manufacturer will not operate an Ecommerce site in competition with the dealers.
 . Customers do not have whole information about operating an ecommerce site for e-
buying procedure.
 Most of the people are unsuccessful to use Net banking and email account because
either they are ignorant or even don’t remember their login ID and password.
 Planners fail to give employees the whole picture and in such circumstances the
training and setting up incentives for workers to embrace the strategy may assist.
 In case of personnel management only at the time of recruitment and training special
skills of internet operations are to be incorporated in the specializations.
 In case of information management there is the process of receiving the orders,
complaints and suggestions is performed but there is no proper forwarding of this
information received. And accurate interpretation of the data and submitting it for the
decision making should be properly channelized.
 In case of office management E-commerce offered as a paperless office as every
transaction is recorded in the computer. Paper records are completely eliminated from
the marketing office management in E-commerce.

52
 In the job of controlling internet orders are to be processed properly and only after
confirmation of the receipt of the cash goods are to be dispatched correctly in e -
commerce.
 In case of marketing management in e-commerce attractive presentation of the
products on the website and one operator on the company computer are enough to
carry out the transaction of E-commerce and they are sufficient to effect the sales.
 Attractive and informative web designs play an important role in the development of
any business on the account of applicable of E-commerce in the business. The
attractive and informative website proves to be new additions in the growth of the
business.
 In staffing particularly in the sales department along with traditional salesman, Internet
operating sales force is needed.
 Along with the traditional methods of communications like letters, telephones, Fax,
intenet negotiations with the target customers or the potential customer are to be
incorporated in the business as a means of communication. This is the fastest method
of communication requiring an all together different skill of tele conveniencing.
 Product developments and introduction of modified product up to a great extent
depend upon the complaints and suggestions of the consumers. This type of
information should be carefully processed as it is a "Feed back " used in the design of a
new product. conducted for this purpose. In E-commerce this information can be had
from the consumer at the time of dialogue with him.
 E-banking with the advancement in the technology, the new banking facilities such as
EFT and Internet Banking have proved to be a major breakthrough in banking
technology. It has become more sophisticated with enormous opportunity of vertical
and horizontal developments.

53
Conclusion:-
 In the controlling process responsibility of the business increases tremendously because
online orders are to be processed properly and only after confirmation of the receipt of
the cash goods are to be dispatched correctly.
 Paper records are completely eliminated from office management in E-commerce
because every transaction is recorded in the computer.
 E-commerce charges entire procedure of marketing management because the attractive
presentation of the products on the website and one operator on the company computer is
enough to carry on the transaction and he is sufficient to effect sales.
 In information management receiving the feedback, suggestions, corrections, complaints
are to be processed and proper forwarding of this information is to be undertaken for its
accurate interpretation and submitting it for the decision making.
 In the organization a completely new technique of electronic i.e. internet is to be
introduced.
 The use of E-commerce has changed the entire procedure of business in E-commerce
because the computers, internet connection, attractive and informative websites are the
new additions in any business.
 It has changed the entire transaction procedure in banking system, cheque system and
credit system in E-commerce.
 It has been observed that the managements lack the proper ability to explain their
strategy well to their employees resulting in miscommunication and ignorance of
objectives.
 Major customers have no correct information about the use of internet and operating
websites for commercial purpose.
 Producers and dealers do not understand correct habits, expectations and motivations of
the customers.

54
 Bibliography

 Global electronic commerce: by Chris wstland and ted clark,

MIT press, 1999.

 E-bussiness –roadmap for success, by Ravi Kalakota and Marcia Robinson,

Addison-Wesley Publishing Company Inc,.1999

 Electronic Commerce –A Manager’s Guide, by Ravi Kalakota and Andrew B.Whinston,

Addition-Wesley Publishing Company, Inc,1997

55