Any business seeks maximum profitability. Especially when the global economic crisis grows, a company must have both maximum profitability by reducing costs, and by finding new markets and new consumers. Due to economic conditions, companies have turned to online business, where operating costs, and marketing costs are much lower. Almost every company in the world, who noticed the trend, they promote, in one way or another, the own business on the Internet.online business, economic crisis, business model, social media

Eugen Remus Negoi

Liliana Nicodim

English

Research Papers in Economics

International Journal of Economic Practices and Theories, Vol. 2, No. 1, 2012 (January), e-ISSN 2247 – 7225 
www.ijept.org 
 
   
43   
   
Attributes of Online Business in Romania during Economic Crisis 
 
by 
Eugen Remus Negoi, Liliana Nicodim 
Bucharest Academy of Economic Studies 
Constanta Ovidius University 
remus.negoi@yahoo.com, nicodimlili@yahoo.com  
 
 
Abstract. Any business seeks maximum profitability. Especially when the global economic crisis grows, a company must 
have both maximum profitability by reducing costs, and by finding new markets and new consumers. Due to economic 
conditions, companies have turned to online business, where operating costs, and marketing costs are much lower. Almost 
every company in the world, who noticed the trend, they promote, in one way or another, the own business on the Internet. 
 
Key words: online business, economic crisis, business model, social media. 
JEL classification: F18, M21 
 
 
1 Introduction 
 
The evolution of Romanian society in the last 
10 years, in the business conducted through the 
Internet,  was  increasing  exponentially. 
Following the qualitative and quantitative study 
through  questionnaires,  business  in  different 
areas of Romania,  also  using the  Internet,  we 
wanted to obtain information about trends in the 
Romanian  business  global  economic  crisis. 
Based  on  the  information  obtained,  we  can 
build a tendency of successful business models. 
The  results  obtained  show  that  the  business 
environment,  even  if  it  has  enough  gaps  and 
crosses  enough  difficulties,  it  may  revive  by 
resorting to online business. Creating a business 
model  that  uses  the  Internet,  as  a  basis  for 
business  promotion,  involves  the  study  of  the 
impact on business partners, customers and their 
impact on costs and profits. Mastering all of this 
information  can  make  the  difference  between 
success and loss of customers or markets. 
Starting  from  the  premises  evolution  of 
contemporary  society,  the  project  is  to  define 
the  operating  environment  in  commercial 
organization,  which  has  online  activities.  An 
important premise is given by inconsistency of 
visibility of products and services sold online, 
which make it difficult entering and maintaining 
a  company's  position  in  a  market.  Promote 
traditional channels, as now perceived, can be 
replaced  partially  or  totally  by  internet 
environment,  only  in  terms  of  finding  more 
efficient business models. There are, however, 
the business models, in the same place and in 
the  same  company,  using  both  traditional 
business techniques and e-business techniques. 
 
2 Internet environment for businesses 
 
With the advent and explosion of the Internet, 
businesses have emerged as the medium of the 
Internet action. The process was imperceptible 
at first, but grows exponentially as it moves. In 
the  information  society  type,  the 
communication,  transfer  and  exchange  of 
information  takes  place  through  technical 
systems.  When  talking  about  the  information 
society and e-business, it is considered, above 
all,  an  unlimited  number  of  computers 
connected via telecommunications networks, to 
transmit a huge amount of information. 
With  access  to  information  on  the  Internet, 
consumers  seek  products  or  services,  find, 
compare,  make  decisions  more  easily  than  in 
traditional trade. Hence the conclusion that the 
new information society brings with it a series 
of  great  opportunities:  spatial  and  temporal 
constraints  (borders  and  time)  in 
communications  have  been  greatly  reduced, 
information  can  be  processed,  stored  and 
transferred  quickly,  information  services 
relating  to  the  transfer  prices  are  steadily 
decreasing. International Journal of Economic Practices and Theories, Vol. 2, No. 1, 2012 (January), e-ISSN 2247 – 7225 
www.ijept.org 
 
   
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As e-commerce sales volume in the Romanian 
market,  annual  total  in  2010  was  about  250 
million euros, but is expected to grow rapidly in 
coming  years,  due  to  changes  in  consumer 
buying preferences, which migrate significantly 
to trade online. 
In Romania, there is a need for future presence 
on the internet social media, although currently 
only  about  9%  of  their  business  presence  on 
these  social  media  (Facebook,  Twitter, 
YouTube, etc.), but approximately 82% have an 
own website. 
Combining  the  market  potential  with 
exponential  growth  trend  online  business,  as 
with  a  Romanian  entrepreneurs  desire  to  be 
present  as  much  in  the  online  environment, 
Romania can expect a steady increase in online 
business.  Amid  financial  crisis  and  the 
preferences of Romanian buyers to purchase at 
low  prices,  Romanian  business  people  will 
move, at least partially, their own business on 
the  internet.  But  there  are  certain  trends  or 
reasons that make the Romanian entrepreneurs 
have doubts about their business online access. 
Basically,  they  understand  that  the  amount 
presences  on  social  media  like  Facebook, 
Twitter, LinkedIn, give positive impact on their 
corporate  image,  and  not  necessarily  direct 
quantification of revenues from this presence. 
 
3  Brief  comparison  of  profitability  in  e-
business and traditional business 
 
To be profitable in a business, is not enough to 
have a great product, many customers or to have 
a turnover above average. To be profitable must 
to be: 
-  A design of e-business and technological 
architecture; 
-  Internet Marketing Strategies; 
-  Online brand management; 
-  Strategies for positioning of the products 
or prices on the Internet; 
-  Online  advertising,  Internet  promotion, 
increase web traffic tactics; 
-  Solutions  for  customer  relationship 
management and technical support; 
-  Market  research  and  analysis  of  the 
effectiveness of the website; 
-  Services  and strategies  for choosing e-
business partners; 
-  Online  payment  solutions  and  e-
commerce strategy. 
Compared  with  traditional  businesses,  e-
business  pace  is  sometimes  suffocating,  with 
which a company must adapt to changes is often 
crucial in achieving profitability. 
Increasing  competition  and  placing  the 
Romanian  economy  on  the  principles  of 
functional  real  market  economy,  have 
drastically  reduced  the  profitability  of  a 
company's  margins.  If,  now,  do  not  invest  in 
businesses  with  profit  margins  of  less  than 
100%, in the future, margins of 10% - 20% will 
be  very  reasonable.  Low  productivity  of 
employees, disturbance flows within a company 
and  the  lack  of  effective  control  mechanisms 
and  control  activities  are  the  main  internal 
causes  of  low  profitability.  Short-term 
profitability is affected by factors internal and 
external  environment  close  to  those 
(competitors, suppliers, distributors, etc.). In the 
long run, this indicator is influenced by external 
factors and the lack of clear vision. 
The most visible areas where profitability rate 
dropped  drastically,  are  traditional  trade  and 
telecommunications. 
 
4  Solutions  to  maintain  profitability  in  e-
business 
 
In areas affected by external factors that lower 
profitability,  such  as  trade  (traditional  or  e-
business),  companies  should  make  their  plans 
more long term business and analyze the market 
well  before  launching  a  business.  Also,  a 
solution  to  obtain  higher  profits  than  the 
average, would be to identify and create niche 
markets in these areas. 
Influence  of  customer  loyalty  campaigns  on 
profitability,  depends  very  much  on  the 
specificities  of  each  market  area.  For  markets 
where resale cycle is reduced, a campaign can 
stimulate  repurchase  loyalty,  with  beneficial 
effects on profitability, if loyalty and campaign 
costs are lower than resale made. In other areas, 
a loyalty campaign may not have any effect or 
have  a  negative  effect  if  campaign  costs  are 
very high and re-purchase rate is very low. International Journal of Economic Practices and Theories, Vol. 2, No. 1, 2012 (January), e-ISSN 2247 – 7225 
www.ijept.org 
 
   
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Taking  into  account  the  wishes  of  consumers 
over time, one of the largest online electronics 
stores  in  Romania,  eMag.ro,  opened  in  major 
cities  the  traditional  shops.  This  is  because 
working  in  the  field  of  electronic  equipment, 
customers wanted to have quick and warranty 
services and post-warranty equipment. In other 
areas  such  as  delivery  of gifts  or flowers, for 
example,  online  stores  have  kept  only  work 
online. 
In  online  marketing,  the  whole  process  of 
developing  a  keyword  strategy  is  based  on 
questions about consumer behavior, about what 
they're  looking  consumers,  what  consumers 
want. 
In terms of channel promotion, many focus only 
on television or magazines, although there may 
be  other  more  effective  platform.  Successful 
companies are those who realize what channel 
and  what  channel  combinations  are  best  for 
target audience. The Online Marketing can opt 
for PPL (pay per link), organic optimization or 
Social  Media  Optimization.  A  PPL  campaign 
can  be  effective  for  some  clients,  but  not  for 
others, it depends on several factors. 
Many large companies turn to two, three or four 
different advertisers, so it is difficult to reach a 
common denominator in terms of promoting the 
product or company. An SEO and web design 
agency will know best how to create a website 
to live up to customer expectations and to be, at 
the same time, well indexed by search engines. 
For example, the social network Facebook is a 
dynamic  environment  that  allows  interaction 
with  other  members,  keeping  up  to  date  with 
news and events selected contact group, change 
information  and  find  out  their  opinions  about 
products or services. 
 
5 Traditional business models and e-business 
models 
 
The  online  competition,  the  assertion  of  new 
business  models  and  the  focus  attention  on 
consumer,  have  the  effect  of  increasing 
consumer power. 
It  can  say  therefore  that  the  Internet  gives 
consumers more power. To compete in this new 
economy,  companies  are  forced  to  adapt  to  a 
world where digital information will contribute 
with  a  significant  percentage  to  the  value  of 
economic proposals. 
For  some  Romanian  businessmen  interviewed 
(by self study), who have online business, the 
escape from economic crisis "may come when 
people  will  adjust  their  expectations  (and  in 
particular  the  time  horizon  of  these 
expectations)",  and  for  others  the  economic 
crisis is "more work for the same money." 
Based  on  some  results  of  the  survey  of 
Romanian entrepreneurs, the focus was on their 
vision on their internet business. As shown in 
Figure  1,  the  expectations  of  Romanian 
entrepreneurs  for  their  business  are  not  too 
optimistic:  57%  of  them  believe  that  their 
businesses (including online) will suffer in 2012 
because of difficult economic conditions. Only 
28%  of  Romanian  entrepreneurs  believe  that 
their business will not suffer at all because of 
economic crisis. 
 
 
 
Figure 1: Estimation of the negative impact of economic 
crisis on online business in 2012" 
 
This estimate shows the low level of optimism 
of  Romanian  businessmen  and  difficulty 
(especially  in  terms  of  facilities)  business 
environment in Romania. 
Although  it  is  difficult  business  environment, 
operating costs are high, the purchasing power 
of  customers  has  decreased,  however, 
businesses have not felt totally, timeliness of the 
online  business  environment.  As  shown  in 
Figure 2, only 28.6% of them are present in the 
social environment on the Internet  (Facebook, International Journal of Economic Practices and Theories, Vol. 2, No. 1, 2012 (January), e-ISSN 2247 – 7225 
www.ijept.org 
 
   
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LinkedIn, Twitter), while the remaining 71.4% 
said they are not present on social media over 
the Internet. 
 
 
 
Figure 2: The presence of companies that operate online, 
in social media on the Internet” 
 
This  conclusion  indicates  a  low  concern  for 
promoting  revolutionary.  Most  Romanian 
entrepreneurs are still anchored in old habits to 
promote, not taking into account the advantages 
of online promotion, primarily in terms of costs. 
As  long  as  the  economic  crisis  conditions, 
competitive advantage is measured in costs, but 
also  in  the  number  of  customers,  business 
presence on the Internet is absolutely necessary. 
 
6 Conclusion 
 
An  internet  business,  at  least  the  same  as  a 
traditional  business,  requires  continuous 
optimization  and  IT  strategies  (order 
processing, manufacturing, billing, collection). 
An internet business has the advantage of lower 
costs  than  a  traditional  business,  which  is 
reflected in lower prices for the same type of 
product  or  service,  while  maintaining  at  least 
the same profit margins. 
The  companies  surveyed  have  business  in 
Romania,  including  different  fields,  vast 
territorial area (including all geographic areas of 
Romania), they experience on the market from 
under 5 to over 15 years, annual turnover from 
100,000 EURO to 500,000 EURO. 
Only 3% of interviewed entrepreneurs believes 
that online business is not required; however, of 
these, 94% work in industry and have a turnover 
of  over  EUR  500,000  (which  would  cause 
traditional marketing campaigns, which involve 
large costs). 
100% of the surveyed companies, the Internet is 
associated  with  its  own  website,  just  for  a 
company presentation. 
96% of entrepreneurs interviewed work even in 
traditional  business  field,  so  that  one  of  the 
disadvantages  of  online  presence  ("de-
humanizing") can then be annihilated by direct 
contact with customers or potential customers. 
It revealed that 83% of Romanian interviewed 
entrepreneurs spend less than 25% of turnover 
for online advertising. 
As advantages of their business presence on the 
internet, entrepreneurs told: 
-  greater  openness  to  a  wide  range  of 
potential customers; 
-  Ease  of  presenting  their  products  or 
services; 
-  Reduced  cost  of  sales  and  marketing 
staff; 
-  Almost  instantaneous  feedback  of 
quality products, and services. 
As disadvantages of their business presence on 
the internet, they include: 
-  almost  any  client  or  potential  client  is 
more attracted to comment on a product 
or  another,  on  the  Internet  (website  or 
company selling specialized forums). 
-  Virtual  interaction  with  potential 
business  partners, there  are non-human 
interaction. 
Following analysis of responses, it is creating at 
least one business model that: 
-  combines  the  traditional  with  the 
presence on the Internet.  
-  has at least web-site presentation. 
-  tends to be present increasingly more on 
Internet. 
-  has increased optimism that will enable 
increasingly more online. 
-  see  the  importance  of  lower  operating 
costs of the Internet activity. 
-  shows  the  internet  as  a  means  of 
promoting business. 
-  would  operate  online  for  more  than 
60%. 
 
 International Journal of Economic Practices and Theories, Vol. 2, No. 1, 2012 (January), e-ISSN 2247 – 7225 
www.ijept.org 
 
   
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Author description: 
 
Negoi Eugen Remus is PhD student at the  Bucharest Academy of Economic Studies. His research 
converge to analise in online business field. Expected results converge towards finding internet business 
models, which have an above-average profitability, in the context of economic crisis. 
 
Nicodim Liliana is PhD professor at the Faculty of Economics at the Ovidius University of Constanta. 
His  research  and  teaching  university  emphasizes  the  importance  of  culture  and  ethics  in  business, 
especially. Scientific papers and edited books emphasize the importance of business based on science, 
in which ethics and fairness to exist at all levels of business. 

A strategy guide: Business thinking and strategies behind successful implementations,

Antoin (2007), Making an impact online,

Business information management systems,

Business research metods, Aarhus, Ventus Publishing ApS.

Customer relationship management, London, Ventus Publishing Aps,

Esays on the Great Depression,

The Business Models,

Trends in business development using the Internet, in economic crisis conditions,

Understanding the new online business models, trends and technologies,

Attributes of Online Business in Romania during Economic Crisis

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Attributes of Online Business in Romania during Economic Crisis

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