Asked Jul 11, 2019
  • What issues do the online businesses face?  How are they similar to offline competition? 
  • How are these issues resolved (market v. nonmarket) in the online and offline business?

Use the theory fo the 4 Is. Issues are understood as moral concerns, consequences, justice, and rights at stake which can be resolved by either market or non-market action.  


Expert Answer

Step 1
  1. Before analyzing the issues related to online businesses, firstly we need to know what is an online and offline business. Online business is one of the forms of business activity where the buying and selling of any services or goods happen over the internet whereas an offline business is a traditional way of doing business by establishing a physical place where people can come and buy products as per their wish.

The issues faced by an online business are as follows:  

  1. Moral concern – This issue is mainly concerned with the harm or help that a business requires while operating online. In the case of online business, there are issues like finding the right product to sell, attracting the perfect buyers, generating targeted traffic, capturing quality leads, converting shoppers into paying customers, nurturing the ideal prospects, retaining the customers, etc. Thus, moral concern mainly focuses on retaining the seller in the market by earning a normal profit.
  2. Consequences – The consequence of a seller’s action in order to raise its sales and revenue have different impacts over its potential consumers, i.e., sometimes the customers buy that product as soon as possible while sometimes the customers don’t take advantage of a sale founding the product costly than the offline market. Thus. the profit earning majorly depends on the least price paid by the buyer in an online or an offline market.
  3. Justice – Justice in an online market is mainly related to the level of customers satisfaction. That means the online market is more concerned about their ratings, customers reviews, etc. so that other customers can easily buy and use their product.
  4. Rights – The right is a legal entitlement to do something; therefore, this is an important aspect to sell any product in an e-commerce market as if the seller doesn’t have any legal right to sell a product than that seller will be punished by the law for selling a duplicate product in the market.
Step 2

The issues faced by an online business doesn’t exactly similar to the issues faced by an offline business, but somehow both face the aforementioned issues. In the case of moral concern, the difference between an online and offline business is that an offline business mainly concerned with their geographical location, cost of remaining ideal, lack of coverage area, limited customers...

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