E-commerce has greatly impacted the relations companies have with their suppliers and customers. This allows tighter co-operation with suppliers, which can lead to quicker more accurate deliveries and lower inventory. Suppliers can become involved with producers early in the product design. This can lead to better quality and lower production costs. E-commerce also creates better links between companies and their customers. This improves their ability to predict and provide what the customers want. Further, e-commerce shifts the balance between performing a task in-house and outsourcing. This has lead to greater outsourcing as companies focus more intensely on their core competencies.
As communication and off shoring become easier, not only can a company reach wider markets, but also they are exposed to competition from those wider markets and from firms in their markets that have improved their competitive position by effective use of the opportunities available through e-commerce.