Since Europe itself only lately became aware of Internet as a business tool, Latvia is no more than in the middle of the way to be an e-expert and have a complete knowledge of how to do business online. Even though information technology as an education program has been studied regularly in Latvia, many Latvian business people consider online businesses as a puffy soap-bubble made by IT specialists (Are Interneta 2). In fact, many of e-stores established since 1999 quickly disappeared from Latvian Internet market because they were inelastic – based on already prepared e-strategies and solutions which were made for Western European markets but not suitable for Latvian markets (Are Interneta 2). However, this “puffy soap-bubble” seems to slowly fade away as more and more Latvian companies start to practice Internet as an advantageous and cost-effective tool for their business operations.
Another reason why e-commerce was not well accepted in Latvia for the past years and why there were only a small number of these companies in Latvian market was as a consequence of monopoly situation among Latvian Internet service providers (Lattelekom) and these services being expensive to use.
Nowadays, technology installations, experience and know-how is extremely necessary to establish a successful business company online. On the other hand, many businesspeople enter e-markets because in Latvia it is still an area which is in the development phase; hence the e-niche in Latvia is not overflowing and online start–up companies can learn along their way. Another reason is that in Latvia small companies do have limited resources, so it is definitely better that these companies are online instead of offline, especially in such regions as Daugavpils or Madona.
Internet marketing is less expensive and can serve a customer 24 hours a day and 7 days a week, compared to traditional marketing. It can also offer fewer expenses to a company, because Internet marketing is not bounded by time, space and place. Therefore, it is advantageous for small companies to practice online marketing principles instead of offline, because especially in Latvia it is extremely hard for a small offline company to achieve market share and competitive advantage and race against huge international companies in the same industry.
An online company that has been established based on local market research and strategies can achieve large market share and can be competitive against traditional stores. This is true because being online itself is a competitive advantage since owners of traditional stores for many reasons may not be ready enough to compete with online companies because “being online is just a new fashion, which never lasts long as well-known traditions do” (Āre Interneta 2).
This example - thinking the traditional way - is one of the most common mistakes of business managers, because in the future it will be customers who will decide whether they want to shop online or offline; and why should they still be interested in traditional way of shopping if Internet provides fast service, twenty-for-seven access to the store, payments with cards or e-money, cheaper prices and product delivery without leaving a computer. As a result, being online for small Latvian company will appear to be more cost effective and profitable way to gain competitive advantage than being offline.
Finally, it is very important to follow the needs of customers, to change before they want to change and to provide the service which is worth their money - this can be done more efficiently online than offline. “In five years’ time all companies will be Internet companies or they won’t be companies at all” (Rowley 1).…
