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Opportunity Cost

Often, the cost of not providing an e-business system is far greater than the cost of providing it.

An e-business system can provide competitive advantages that a company can exploit to the fullest to obtain new customers, retain existing customers, provide new services/facilities, etc.—and put the competition out of business as a result. Of course, if the business chooses not to go ahead with the system, the risk is that the competition decides to go ahead with the system instead.

Being the first to provide a service or product often has a long-term effect on the profitability of the company concerned that far outweighs the benefit obtained by the second company to provide that same service. For example, Barnes and Noble now provides a service similar to Amazon.com, but the Amazon brand is well-known and established on the Web as the place to buy books. Amazon has benefited greatly from being the first to provide it, in terms of the level of customer loyalty, revenues and so on.

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