Technology has been in use for many years past, but its initial application was in technical and scientific fields. However, the business culture has so far changed everything. With investors seeking for means to increase their sales and marketing objectives, technology has emerged as one of the most effective tools for business growth. E-Business is the integration of internet with management in order to increase productivity, sell brand name, increase sales or perform any other business oriented task. Its adaptability and ease of application has made many business individuals and to embrace the strategy in order to succeed. Nigeria stands out as one of the countries where investors and especially small-scale investors have embarked on embracing E-Business to foster business growth. However, due to the wide scope of E-Business, it’s important to analyze its specific influence to the Nigerian SMEs in order to determine its effectiveness to business growth.
There are several divisions in the E-Business. Some of these are the B2B and the B2C. B2B can be taken as colloquial abbreviation for Business-to-Business, while the B2C means Business-to Consumer. Business-to-Business investment group make use of inter-net based applications in order to communicate between two or more companies (Raymond, Bergeron & Blili, 2005). This type of business technology has been very popular with small scale businesses since it only required creating communication channels between the businesses involved. Inter-business communication and networking made use of simple and private networks as well as electronic data interchange in order to enhance inter-business success. Through this strategy, businesses strike deals, get to consensus and make all the relevant payments through the internet.
Business-to-Consumers is another E-Business strategy that involves direct interaction between businesses and consumers. These strategies involve having direct interactions between the business operators and the consumers. Some of the businesses that are carried out through this strategy are shopping, bookings, internet games, and other internet-based purchases at which some of the business investors may be operating as a link between the real seller and the buyer. Since the business persons engaged in Business –to-Consumers business may not be the actual owners of the advertised products, delays are expected but consumers are well aware of this and it has not appeared to be a threatening challenge to business.
SMEs, is an abbreviated terminology that stands for Small and Medium-sized Enterprises. The specifications for, and categorization of a business as small, medium or large business, is determined by the number of employees, annual business turnover, capital, financial strength and the sale volumes among other issues. For this reason, the specifications between countries may vary but not with great margin. According to the small scale industries association in Nigeria, a small scale business is the one with an investment of less than N60000, and whose employment capacity does not exceed fifty employees. While these definitions vary even among several the Nigerian trade departments, the concept and understanding of the actual size of the business is comprehensible.
The SMEs business in Nigeria was inspired by the Europeans who had adopted the strategy as a way of reducing poverty and creating more jobs (Eikebrokk & Oslen, 2006). From the start of the 1990s, to the end of the 1990, the Nigerian government had already established investment frameworks that were meant to increase the rates of investments and especially among the small scale enthusiasts. Small scale businesses were seen as the major contributors to business growth in Nigeria. This thus influenced the Nigerian government tom intervene in order to develop the small and medium sized businesses.
One of the strategies that were implemented by the government to ensure that the country developed financially was setting up finances to the small and medium sized businesses. These funds helped in encouraging more investors to expand their business in both local and regional markets. The funds were mostly allocated to the youth, most of who were educated but had no formal employment. Through the funding, the government also enacted many strategies that were meant to offer business ideas and techniques and some of the ideas given were based on E-Business.
The establishment of small scale industry credit schemes as well as the industrial departments associated with the bank influenced the investors to increase their market holdings in the country. E-business helped in making the business culture in Nigeria a reality.
Firstly, E-Business entailed creating business networks that were meant to increase the communication and sharing of ideas between the business individuals (Onugu, 2005). The government ensured that the networking in the country was a major success by initiating projects aimed at offering network connectivity throughout the country. The government first ensured that the internet costs were cheap and affordable. This was through tendering on the establishment of optical fibers to run through the country. Through these network cables, the government ensured that data speed as well as the efficiency was high. By creating a reliable network, the government then initiated programs that were aimed at encouraging investors to seek the unexploited internet business. This thus caused many small and medium sized enterprises initiating online businesses with aims of making huge returns.
The B2B group was the most influential among the small and medium sized businesses. Small businesses came together and established networks. These networks were formed by business enthusiasts with shared interests. For this reason, not any individual made it into the networks (Onugu, 2005). However, there were many initiatives that were started in order to encourage the business owners to come together and share ideas that would help in developing the SMEs in the country.
Through shared interests, the small scale businesses formed business alliances that were mostly conducted through the internet. The main aim of these alliances were aimed at establishing the relevant suppliers, manufacturers, retailers and other intermediary business partners who would help in ensuring that the business activities moved smoothly.
Another advantage that emerged from the use of e-Business was in communication. To begin with, businesses grow out of the information coming from within or from external sources. By establishing a reliable and effective network, the small scale businesses through their groups, ensured that there was frequent communication. Through their small scale industries association, the businesses ensured that they benefited from any regional or international information regarding trade. The information that was provided by the associations was easily transferred to all the affiliated members, this ensured that all the members stayed in touch with the current affairs and any transaction that needed to be carried out by any member within the networked association, was conducted through the internet.
The internet therefore became the business pillar. Many businesses conducted their businesses out of the many networks that were created by the SMEs. The business-to-business networks were so popular that small businesses started to emerge directly online. This meant that some people used this opportunity to form a link between two or more businesses. For a new investor, the right information influenced the speed of establishment (Lockett & Brown, 2003). Without knowing the right suppliers, buyers, or manufacturers of a certain product, then it became very hard to get established. For this reason, the internet proved vital and very important in linking up old and new investors. Links were therefore formed that helped the developing businesses to easily catch up with the market trends.
The use of internet in supply-chain management became the core for business establishments. One business relied on another for growth. For example, a cloths’ outlet had to know a cloths manufacturer in order to strike appropriate deals for permanent or contractual supply of the finished goods. Hitherto, it was very hard for an investor to know the right business to approach to form partnership. With the onset of E-Business, the inter-business networks enabled the small and medium sized businesses to follow up on a specific business and determine whether they were the best to perform the business deals (Onugu, 2005).
B2b became one of the most popular business initiatives since it enabled the new investors to link up with other already established individuals. For the case of transaction, E-Business made transactions easy and efficient. Instead of getting involved with many paper works, the online business was able to make the transactions easy and fast. This though had to involve the collaboration of the banks.
The government noted the challenges that would be associated with online business and involved the banks in formulating strategies that would ensure its smooth operations. This therefore required that the banks establish flexible services that would enable the businesses owners to make transactions through the internet (Onugu, 2005). Online transactions requires that both businesses and other financial institutions to come together and establish common grounds for investment.
The strategies for Business to consumers involve having direct interactions between the business operators and the consumers. Some of the businesses that are carried out through this strategy are shopping, bookings, internet games, and other internet-based purchases at which some of the business investors may be operating as a link between the real seller and the buyer. Since the business persons engaged in Business –to-Consumers business may not be the actual owners of the advertised products, delays are expected but consumers are well aware of this and it has not appeared to be a threatening challenge to business.
Their capabilities to explore on the market and resources distributed throughout Nigeria enabled them to penetrate the foreign trade and hence catapulting the economy to the global front. These small and medium-sized industries started to develop to reach around 98% of all the businesses in Nigeria. These developments were encouraged by the development of the infrastructures especially during the fuel crisis period.
The government took the initiative to regulate the laws governing the trade and social transactions by first making them strict in the 70s and later moderated these laws from the 80s to date (Sanusi, 2003). These moderations were as a result of heightened economic hardships across the globe that required prompted and decisive actions by the government. Through these regulations, the economy managed to ascend at a regular rate and thereby projecting it to its current status.
Since politics can cost a country’s economy, Nigeria formulated a legislative form of government from its initial authoritarian that had been adopted to maintain stability and social ethics for observing law and order (Ifinedo, 2009). Through the legislative governance, the investors became free to invest as restrictions for trade were eliminated and this catapulted the revenues in foreign exchange to match that of developed countries. Although it encountered some problems during its transition, the investment opportunities it bore helped project the economic growth to its current position of among the fastest growing economy.
The B2B and B2C initiatives emerged as the best strategies that were used by the small and medium scale businesses to generate growth. The youth were the most active in this strategy (Margi, Philip & Les, 2004). This is because they had all the technical and technological knowhow, but lacked the means of investing. By having the intervention of the Nigerian government, the youth as well as other investors were in a position to develop their businesses.
Other than Nigeria, the concept of having E-Business promoting business has been very common in many countries across the globe. Firstly, many businesses feel that there is a need to find strategies of getting out of local and regional box in order to prosper. The internet in business helps businesses to come together and formulate strategies that are profit oriented.
In conclusion, the B2B and B2C are some of the main divisions in E-Business. Through internet based model, the businesses come together with common goals and embark on making alliances that are aimed at encouraging growth and ideas. The strategy ensures that there are increased transactions since the businesses get to the consumers, a strategy that saves time and makes it convenient to the customers. For this reason, Nigeria and many other countries have benefited from the adoption of E-business into their investment strategies. As a result, many people who were hitherto unemployed have managed to secure self employment, an issue that has contributed to poverty reduction.
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