TECHNOLOGY INNOVATION AND COMPETITION: SMALL AND MEDIUM COMPANIES CHALLENGES TO PARTICIPATE IN ELECTRONIC COMMERCE

Abstract

Development and high growth rates in electronic commerce in recent years in Brazil have been related to the massive engagement of large companies in the sector. These companies have been harvesting the product of their initiatives, such as high rates of productivity and reduction in transaction costs. Yet, small and medium companies have not entered aggressively in this new market. The purpose of this article is to analyze the barriers that small and medium companies have been facing to take part of e-commerce and discuss which benefits they could obtain whether they do so. Indeed, identification of barriers should help to overcome them, and therefore to foresee strategies which could include them in this sector. We shed light on this phenomenon by analyzing a firm which has not only overcome the entrance barriers to electronic commerce, but also consolidated its operations in the sector. In addition, due to this initiative the company has increased its sales volume in 100% a year – in a period of four years - and has developed many partnerships with large firms. Moreover, it has achieved competitive advantages in the area and has become a benchmark in the sector.