Entrepreneurship is about business. Therefore, being successful in business is all about being good at transactions. E-commerce is a new way of doing business, which we shall see in this chapter. But before we can do this and in order to present a clear picture, we should describe virtual corporations and their common identity—supply chains. To start, we look at transactions, the heart of all business activities. Here is a definition of transactions.
Finding customers; understanding their needs; defining how your company can satisfy those needs; making a proposal to the client. Then convincing the customer to agree with you, take you up on your proposal, and enter a contractual relationship with your company.
Today, more often than ever, transactions are becoming more complicated. We see more establishments of longer-term relationships between clients and vendors once an agreement is reached, stating that the vendor can be a useful adjunct to the customer's success. This is happening for 2 reasons:
• The demise of the larger corporation, thus less vertical integration of manufacturing
• The ability to merge production schedules via electronic media to make them virtually seamless
These trends offer tremendous opportunity for the entrepreneur. The dismantling of vertical integration means companies no longer make everything about their products. In fact, many companies became assemblers rather than combinations of fabricators of subcomponents and assembly. This means companies buy more components than ever before, both off-the-shelf generics and items made to their special specifications. With the ability to merge schedules between sellers and buyers electronically, it makes it almost as easy to order parts from suppliers as it would from internal sources. The dismantling of vertically integrated companies gives smaller companies vast opportunities to partner with assemblers to be part of their “virtual” factory, that is, part of their integrated schedule but not under their financial-ownership umbrella. These relationships offer the opportunity for the small startup to act as if it were an established company with all the management trimmings in place. In this chapter, we will discuss this phenomenal opportunity and learn how it works, pointing out both pitfalls and rose gardens to be aware of. It is mainly a factor of understanding and applying what we call the supply chain concept, which also entails a good grasp of pragmatic marketing and salesmanship.