Final answer:
Businesses enjoy several benefits when operating online, including access to customer data, a broader investment pool, and lower setup costs. However, there are drawbacks like the risk of cyberattacks, difficulty in verifying product quality, and the potential to push small businesses out of the market.
Step-by-step explanation:
Benefits and Drawbacks of Conducting Business on the Internet
The emergence of the internet has fundamentally transformed how businesses operate. There are several benefits and drawbacks associated with conducting business online.
BENEFITS
Access to a large amount of customer information: Online platforms can track and analyze consumer behavior, providing invaluable data for businesses to tailor their marketing strategies and products.
Attracts investments from a larger number of sources: The internet broadens the audience for potential investors, enabling businesses to raise capital more efficiently.
Cheaper to set up and run a business: Online operations often require lower overhead compared to traditional brick-and-mortar establishments.
DRAWBACKS
Risk of cyberattacks: The more a business operates online, the more it is exposed to potential security breaches, which can threaten sensitive data and customer trust.
Difficult to verify the quality of products: Without a physical storefront, customers may have reservations about the authenticity and quality of products sold online.
Can drive small enterprises out of business: Online marketplaces can create steep competition, sometimes making it difficult for smaller, local businesses to survive.