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Research, Analysis and Critical Evaluation of a Current issue for Small Medium Sized Enterprises With a ‘live’ Case Study

Introduction to SMEs

Over the last thirty years Small and Medium Enterprises (SME's) have significantly contributed to economic growth, job creation, innovation and promotion of enterprise. Although SME's are important to the UK economy they face many different issues in comparison to a large organisation. The report looks at a current issue which affects SME's and how it is important as it can affect the business from start-up to growth. The issue investigated in this report is e-commerce, there is no single specific definition of e-commerce, but leading authors of e-commerce (Timmers, 1999 and Tassabehji 2003) agree that e-commerce 'includes the electronic trading of physical goods and intangibles such as information.' 

In addition to the costs not being lowered at Bare Essentials, even the initial investment has not yet been recovered by the company.  This provides further ammunition to the theory that e-commerce increases business costs, rather than lowering them.  It is not known whether costs will decline in the future at Bare Essentials. 

Another conclusion made was that Bare Essentials do not have the money necessary to create a known presence online as the marketing costs and search engine optimisation costs are too high.  After investing approximately ₤400 in this area, the owner/managers said they would not invest further unless they were positive that some monetary benefits would be realised.  From this it can be concluded that the Internet is not a fair or equal marketplace, as larger organisations have a healthier budget for online marketing and creating online awareness. The research also suggests that e-commerce had a positive impact on some business operations, but a negative one on others.  For example, customers reported that communication with Bare Essentials became easier.

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