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Poor Managerial Skills
One of the most obvious reasons as to why small information business are out done by big companies in the same field is poor management skills. The business proprietor at times may have the management skills but could lack technical skills to take the business to higher heights (William, & Stephen, Pp 12). The business needs a strategic leader who would know how to handle sensitive issues like contracting or recruiting human resource personnel. He/she should be aware of the business threats such as frauds, which can cause a huge financial loss to the business. Despite the huge market the business might have, there is a lot of potential risk involved.
Transactional costs
In order to connect with your e-commerce customer’s one must use a series of service available to them, which in the end affects the final price that the customer has to pay. In order for a small information business to have satisfied customers, it should have to see to its transactional costs. If the transactional cost were to be reduced, it would have a fair share in the market. There are other types of cost that a business should continually monitor are sunk costs, marginal costs, and fixed costs (William & Stephen, Pp. 20). The cost structure of the business should be the ratio of the fixed cost to the variable costs. In an ordinary situation, a small-scale information goods and serv9ice firm my find it had to keep up with the various business costs. If compared to a big business scale firm in the same field, it is most likely that it would not have such an impact in the market.
Works cited
William, Samuelsson & Stephen, Marks. Managerial Economics (7th ed). Hoboken, NJ: John wiley & sons.
