Introduction-
In the modern period, there has been considerable change in the manner of conducting business. The ‘emerging modes of business’ indicates the recent trends taking place in the way business is done.
The tree strongest trends that are shaping business are:
- E-business
- Outsourcing
- Internationalization and Globalization.
E-BUSINESS:-
If the term business is taken to mean a wide range of activities comprising industry, trade and commerce e-business may be defined as the conduct of industry, trade and commerce using the computer networks. The networks you are most familiar with as a student or consumer is the internet. Whereas internet is a public thorough way, firms use more private, and, hence more secure networks for more effective and efficient management of their internal function.
E-COMMERCE:-
E-commerce stands for electronic commerce and is a process through which an individual can buy, sell, deal, order and pay for the products and services over the internet. In this kind of transaction, the seller does not have to face the buyer to communicate. Few examples of e-commerce are online shopping, online ticket booking, online banking, social networking, etc.
SCOPE OF E-BUSINESS:-
- B2B COMMERCE:-
Business-to-business (B2B), also called B-to-B, is a form of transaction between businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business-to-business refers to business that is conducted between companies, rather than between a company and individual consumer.
2. B2C COMMERCE:-
B2C, or business-to-consumer, is a retail model where products or services move directly from a business to the end user who has purchased the goods or services for personal use. It is often contrasted with the business-to-business (B2B) model, which involves exchanging goods and services between businesses instead of between businesses and consumers.
3. INTRA-B COMMERCE:-
Intra B Commerce refers to business where parties involved in the electronic transactions are from within a given business firm. It is largely due to use of intra-B commerce that today it has become possible for the firms to go in for flexible manufacturing. Use of computer networks makes it possible for the marketing department to interact constantly with the production department and get the customized products made as per the requirements of the individual customer. For example:-Virtual Private Network (VPN) technology would mean that employees do not have to come to office.
4. C2C COMMERCE:-
Customer to customer (C2C) is a business model whereby customers can trade with each other, typically in an online environment. Two implementations of C2C markets are auctions and classified advertisement. C2C marketing has soared in popularity with the arrival of the internet and companies such as amazon ,OLX,
ADVANTAGE OF E-BUSINESS:-
- CONVENIENCE:- Internet offers the convenience of ‘24 hours X 7 days a week X 365 days’ a year. Such flexibility is available even to the organisational personnel whereby they can do work from wherever they are, and whenever they may want to do it. Yes, e-business is truly a business as enabled and enhanced by electronics and offers the advantage of accessing anything, anywhere, anytime.
2. EASE OF FORMATION AND LOWER INVERSTMENT REQUIREMENTS:- Unlike a host of procedural requirements for setting up an industry, e-business is relatively easy to start. The benefits of internet technology accrue to big or small business alike. In fact, internet is responsible for the popularity of the phrase; ‘networked individuals and firms are more efficient than networthed individuals.’ This means that even if you do not have much of the investment (networth) but have contacts (network), you can do fabulous business.
3. GLOBAL REACH/ACCESS:- Internet is truly without boundaries. On the one hand, It allows the seller an access to the global market; on the other hand. It affords to the buyer a freedom to choose products from almost any part of the world. It would not be an exaggeration to say that in the absence of internet. Globalization would have been considerable restricted in scope and speed.
4. MOVEMENT TOWARDS A PAPERLESS SOCIETY:- Use of internet has considerable reduced dependence on paperwork and the attendant ‘red tape.’ you know that Maruti Udyog does bulk of its sourcing of supplies of materials and components in a paper less fashion. Even the government departments and regulatory authorities are increasingly moving in this direction whereby they allow electronic filing of returns and reports.
5. SPEED:- As already noted, much of the buying or selling involves exchange of information that internet allows at the click of a mouse. This benefit becomes all the more attractive in the case of information-intensive products such as soft wares, movies, music, e-books and journal that can even be delivered online.
LIMITATIONS OF E-BUSINESS:-
- LOW PERSONAL TOUCH:- High-tech it may be, e-business, however, lacks warmth of interpersonal interactions. To this extent, it is relatively less suitable mode of business in respect of product categories requiring high personal touch such as garments, toiletries, etc.
- INCONGRUENCE BETWEEN ORDER TAKING/GIVING AND ORDER FULFILMENT SPEED:- Information can flow at the click of a mouse, but the physical delivery of the product takes time. This incongruence may play on the patience of the customers. At times, due to technical reasons, web sites take unusually long time to open. This may further frustrate the user.
- INCREASED RISK DUE TO ANONYMITTY AND NON-TRACEABILITY OF PARTIES:- Internet transactions occur between cyber personalities. As such, it becomes difficult to establish the identity of the parties. Moreover, one does not know even the location from where the parties may be operation. It is riskier, therefore transacting through internet.
- PEOPLE RESISTANCE:- The process of adjustment to new technology and new way of doing things causes stress and a sense of insecurity. As a result, people may resist an organisation’s plans of entry into e-business.
DIFFERENCE BETWEEN TRADITIONAL AND E-BUSINESS:-
| Basis of Distinction | Traditional Business | E-Business |
| Locational Requirements | Proximity to the source of raw materials or the market for the products | None |
| Operating Cost | High cost due to procurement and storage, production, marketing and distribution facilities | There is very less cost to start on e-business |
| Nature of internal communication | Hierarchical-from top level management to middle level management to lower level management to operatives | Non-hierarchical allowing direct vertical, horizontal and diagonal communication |
| Business processes and length of the cycle | Sequential precedence-succession relationship, i.e. purchase – production/operation – marketing – sales.The, business process cycle is therefore, longer | Simultaneous (concurrence) different processes. Business process cycle is, therefore, shorter |
| Nature of human capital | Semi-skilled and even unskilled manpower needed. | Technically and professionally qualified personnel needed |
Short answer Question
- State any three differences between e-business and traditional business.
Ans- see above
2. Describe briefly any two applications of e-business.
Ans Two applications of e-business are
- E- Procurement It involves internet-based sales transactions between business firms, including “reverse actions” that facilitate online trade between a single business purchaser and many sellers, and, digital market places that facilitate online trading between multiple buyers and sellers.
2. E-Communication- Promotion It includes e-mails, publication of online catalogues displaying images of goods, advertisement through banners, pop-ups, opinion polls and customer surveys, etc. Meetings and conferences may be held by the means of video conferencing.
3. Describe briefly the data storage and transmission risks in e-business.
Ans.
Long Answer Questions
1. Why are e-business and outsourcing referred to as the emerging modes of business? Discuss the factors responsible for the growing importance of these trends.
Ans.
2. Elaborate the steps involved in on-line trading.
Ans.
3. Evaluate the need for outsourcing and discuss its limitations.
Ans.
4. Discuss the salient aspects of B2C commerce.
Ans.
5. Discuss the limitations of electronic mode of doing business. Are these limitations severe enough to restrict its scope? Give reasons for your answer.
Ans.