Greater Access to the Internet Has Enabled Buyers to Search More Easily for Information About Potential Suppliers of Goods and Services. This Has Significantly Affected Many Industries, Such as Insurance, Banking,

859 WordsMar 6, 20134 Pages
Greater access to the internet has enabled buyers to search more easily for information about potential suppliers of goods and services. This has significantly affected many industries, such as insurance, banking, retailing and travel. To what extent do you think that increased internet usage inevitably reduces producers’ profits? Justify your answer with reference to organizations and/or industries that you know. Over the past decade, Shopping on the internet has skyrocketed with internet sales reaching almost £30 billion in 2012, which accounts to almost 10% of total sales in the UK. This is due to the increased possession of Internet devices such as: smartphones, laptops and computers. It has become much easier and simpler for…show more content…
Some products would not be sold in Jessops but would be sold online resulting in losses of potential revenue for Jessops. Another market which has slowly died is the demand for printing of photos, due to social media websites such as Twitter and Facebook people don’t need to share their photos in a physical format and are capable of simply sending the picture via these social websites. In this case of selling products it was a massive drawback for Jessops but turned out to be an advantage for competitors such as Amazon. The increased number of internet users leads to benefits for Amazon who thrive off increased internet usage due to consumers finding it a cheaper alternative to Jessops. The internet can also be a good source of primary market research which enables firms such as Amazon to analyze prices of different websites. This would give the opportunity for Amazon to perhaps reduce prices or introduce offers which would help them sell more products. I believe it is entirely up to the company, this kind of competition would perhaps not effect Amazon due to their size in the market and their reliability where customers instantly visit Amazon knowing they will be given a fair price and receive their purchased item quickly. However, it did affect Jessops who failed to respond to demand and lower prices resulting in there imminent administration. I don’t believe that the increased usage of the internet reduces profits as some firms can be incredibly

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