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MBA's In E-Commerce

Business over the Internet is growing at a very fast pace. The first domain name was registered Ion March 15, 1985; it took another 15 months to register the first 100 names, primarily by universities and Fortune 1000 companies. Today, there are close to twelve million active web sites, and it is predicted that by 2004 there will be 120 million registered web sites. 

In terms of number of users, it is estimated that one billion people will be using the Internet by 2001. In a survey of 15,000 online customers by, it was observed that 67% of those surveyed .. planned to get a website within the next year, and that a majority of them want to start an online business of their own. Thus, a large percentage of consumers themselves are getting ready to identify their own niches and start a business. Total retail sales over the holiday period alone may reach $20 billion this year; yearly sales over the Internet may reach 400 billion by 2002. The growth in Business to Business (B2B) e-commerce is even more stunning. According to Gartner Group, the worldwide B2B market will grow from $145 billion in 1999 to 7.29 trillion in the year 2004.

The power of the Internet has been harnessed in various ways, such as selling thing  identical to those sold in traditional stores, such as books by .com, which dominates retail sales on the web. The Internet has also made some services better than the previous mode of delivery, such as web-based training and education. It is estimated that web- based corporate training alone will grow to $1.1. billion by 2003, from 1..1 billion this year. Still more businesses arose because of the Internet itself, particularly the use of e-mail for communication - Jupiter Communications predicts that the e-mail marketing industry will reach over 7 billion by 2005. Even though most of the growth in the past was business-to-consumer, most growth in the future is projected to be in the business-to-business sector. The Gartner Group has estimated that by 2004, 10% of e-business will be business-to-consumer, and 90% business-to-business. Theo Mantzanas, Senior Manager in Arthur D. Little's e-Learning and Performance Practice argues that 'brick and mortar' companies need to know how to make the transition to B2B in order to utilize the Internet. This change is already taking place at some 'brick and mortar' companies - at GE, for example, auction transaction has been estimated to be $5 billion this year, up from $200 million last year.

Early entrants were rewarded handsomely in terms of both the market share and stock evaluations. In the last few years, higher evaluations for these companies were observed, as they were based on revenue projections and not underlying profits. It was later observed that some businesses were using different accounting practices to show higher revenue projections. In the last few months, a large number of e-businesses saw a sharp decline in their stock prices, an experience that underscored the point that the type of business or the mode in which the business is conducted may change, but the business fundamentals do not. The business still needs to be run efficiently, still needs to address issues related to finance, marketing and accounting, and one still needs to comply with various regulations. And, in the end, the business must make money. Bill Clair, CEO, Innovate! EC, compares the web-based system to the tip of the iceberg. Just as most of the iceberg is under water and only the tip is visible above, in an e-business only the web-based portion of the business may be visible, but a much bigger effort to have all aspects of brick and mortar mode of business activities, from capacity planning, to forecasting, to inventory management to shipping has be done in the same way as for a 'brick and mortar' business. It is here that knowledge of the whole business is important.

Students are struggling with the question of why to study an MBA in E-Commerce. Some think that they could start working for a high-tech company and pick up relevant information through training programs while on the job. However, even tech-savvy individuals need to understand the fundamentals of running a business to have a successful venture. To put it in context, overall, US corporations spent $16.5 billion on the training and education of its managers. A Business Week survey found that when companies send their executive for further training, the most wanted topics are leadership skills, entrepreneurship and the Net. What the Internet has done is to provide access to the customer as never before. The fundamentals of business, however, have not changed, and a successful entrepreneur needs both the knowledge of technology and fundamental aspects of business. An MBA in E-Commerce is designed to address this need.

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