e-business...e-business e-business has made shopping easy for us. we don’t need to go anywhere...
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e-Business
E-business has made shopping easy for us. We don’t need to go
anywhere physically, we can shop from home and get great deals too.
But do you know what are the types of e-business? What are its
characteristics? Let’s find out more about e-business.
Introduction to e-Business
E-business or Online business means business transactions that take
place online with the help of the internet. The term e-business came
into existence in the year 1996. E-business is an abbreviation for
electronic business. So the buyer and the seller don’t meet personally.
In today’s world, we are exposed to various forms of e-Business.
Since its emergence, it has grown by leaps and bounds. Some predict
that it may very soon overtake brick and mortar stores completely.
While that remains to be seen, we cannot ignore the immense role it
plays in the current global economy.
Features of Online Business
Some of the features of Online Business are as follows :
● It is easy to set up
● There are no geographical boundaries
● Much cheaper than traditional business
● There are flexible business hours
● Marketing strategies cost less
● Online business receive subsidies from the government
● There are a few security and integrity issues
● There is no personal touch
● Buyer and seller don’t meet
● Delivery of products takes time
● There is a transaction risk
● Anyone can buy anything from anywhere at anytime
● The transaction risk is higher than traditional business
Browse more Topics under Emerging Modes Of Business
● Benefits and Limitations of e-Business
● Online Transactions and Security of e-Transactions
● Outsourcing
Learn more about Online Transactions and Security of e-Transactions
here
Types of e-Commerce
Now there are actually many types of e-Businesses. It all depends on
who the final consumer is. Some of the types of e-commerce are as
follows :
Business-to-Business (B2B)
Transactions that take place between two organizations come under
Business to business. Producers and traditional commerce wholesalers
typically operate with this type of electronic commerce. Also. it
greatly improves the efficiency of companies.
Business-to-Consumer (B2C)
When a consumer buys products from a seller then it is business to
consumer transaction. People shopping from Flipkart, Amazon, etc is
an example of business to consumer transaction. In such a transaction
the final consumer himself is directly buying from the seller.
Consumer-to-Consumer (C2C)
A consumer selling product or service to another consumer is a
consumer to consumer transaction. For example, people put up ads on
OLX of the products that they want to sell. C2C type of transactions
generally occurs for second-hand products. The website is only the
facilitator not the provider of the goods or the service.
Consumer-to-Business (C2B)
In C2B there is a complete reversal of the traditional sense of
exchanging goods. This type of e-commerce is very common in
crowdsourcing based projects. A large number of individuals make
their services or products available for purchase for companies
seeking precisely these types of services or products.
Learn more about Outsourcing here in detail
Consumer-to-Administration (C2A)
The Consumer-to-Administration model encompasses all electronic
transactions conducted between individuals and public administration.
Some examples of applications include
● Education – disseminating information, distance learning, etc.
● Social Security – through the distribution of information,
making payments, etc.
● Taxes – filing tax returns, payments, etc.
● Health – appointments, information about illnesses, payment of
health services, etc.
Business-to-Administration (B2A)
This part of e-commerce encompasses all transactions conducted
online by companies and public administration or the government and
its varies agencies. Also, these types of services have increased
considerably in recent years with investments made in e-government.
Solved Examples For You
Q. If a person posts an advertisement to sell his product on OLX
website, it is an example of _______.
a. B to C
b. B to B
c. C to C
d. C to B
Sol. The correct answer is option ”C”. There are many sites offering
free classifieds, auctions, and forums where individuals can buy and
sell. e Bay’s auction service is a great example of where
person-to-person transactions take place.
Q. Which of the following are an example of B to C?
a. Online shopping websites
b. Heavy key industries
c. Purchase by a wholesaler from a manufacturer
d. None of the above
Sol. The correct answer is option ”A”. The two or more entities that
interact in this type of transactions involve a business and a consumer.
The business offers a set of merchandise at given prices, discounts and
shipping and delivery options. Hence the correct answer is online
shopping websites.
Benefits and Limitations of e-Business
Nowadays you can order anything online. You can find everything
from a toothbrush to a TV. Progress in technology and growth of
e-commerce has given us this benefit. But what exactly is e-business?
Is it beneficial for businessmen? Are there any limitations or
disadvantages or limitations of e-Business? Let’s find out.
Introduction to E-business
E-business stands for electronic business. Electronic business is also
known as online business. Online business is a business where the
transaction takes place online. Here, the buyer and the seller don’t
meet personally. The term “e-business” was coined by IBM’s
marketing and Internet team in 1996. E-business is a part of
e-commerce. E-commerce means electronic commerce.
Browse more Topics under Emerging Modes Of Business
● e-Business
● Online Transactions and Security of e-Transactions
● Outsourcing
Advantages of e-business
There are actually innumerable advantages of e-Business, the most
obvious one being the ease of doing business. Some of the major
advantages of e-business are as follows :
● Easy to Set Up: It is easy to set up an electronic business. You
can set up an online business even by sitting at home if you
have the required software, a device, and the internet.
● Cheaper than Traditional Business: Electronic business is much
cheaper than traditional business. The cost taken to set up an
e-business is much higher than the cost required to set up a
traditional business. Also, the transaction cost is effectively
less.
● No Geographical Boundaries: There are no geographical
boundaries for e-business. Anyone can order anything from
anywhere at any time. This is one of the benefits of e-business.
● Government Subsidies: Online businesses get benefits from the
government as the government is trying to promote
digitalization.
● Flexible Business Hours: Since the internet is always available.
E-business breaks down the time barriers that location-based
businesses encounter. As long as someone has an Internet
connection, you may be able to reach and sell your product or
service to these visitors to your business website.
Limitations of e-Business
But it isn’t all good news. E-business does have certain disadvantages
when compared to the traditional way of doing business. Some of the
limitations of e-business are as follows :
● Lack of Personal Touch: E-business lacks the personal touch.
One cannot touch or feel the product. So it is difficult for the
consumers to check the quality of a product. Also, the human
touch is missing as well. In the traditional model, we have
contact with the salesperson. This lends it a touch of humanity
and credibility. It also builds trust with the customer. An
e-Business model will always miss out on such attributes.
● Delivery Time: The delivery of the products takes time. In
traditional business, you get the product as soon as you buy it.
But that doesn’t happen in online business. This lag time often
discourages customers. However, e-businesses are trying to
resolve such issues by promising very limited delivery times.
For example, Amazon now assures one-day delivery. This is an
improvement but does not resolve the issue completely
● Security Issues: There are a lot of people who scam through
online business. Also, it is easier for hackers to get your
financial details. It has a few security and integrity issues. This
also causes distrust among potential customers.
Solved Examples For You
Q. What are the various concerns for E-COMMERCE?
Sol. Some of the concerns of e-commerce are as follows :
● Increased competition
● Security
● High start-up cost
● Slow adoption
● Customer Relations Problems
● No human interactions
● Returning Goods
● Fraud
Q. Automobile parts are being purchased from ABC company, by
placing an order through its website.
This is an example of ________.
a. viral marketing
b. network marketing
c. BPO
d. e-commerce
Sol. The correct answer is the option “D”. E-commerce or electronic
commerce, a subset of e-business, is the purchasing, selling and
exchanging of goods and services over computer networks (such as
the internet) through which transactions or terms of sale are performed
electronically. E-commerce includes buying and selling of goods,
information, and services using a network of computers.
Online Transactions and Security of e-Transactions
Online transaction is a payment method in which the transfer of fund
or money happens online over electronic fund transfer. Online
transaction process (OLTP) is secure and password protected. Three
steps involved in the online transaction are Registration, Placing an
order, and, Payment. Let us learn more about the different stages of
Online Transaction in detail.
Online Transactions
Online transaction processing (OLTP) is information systems that
facilitate and manage transaction-oriented applications, typically for
data entry and retrieval transaction processing. So online transaction is
done with the help of the internet. It can’t take place without a proper
internet connection.
Online transactions occur when a process of buying and selling takes
place through the internet. When a consumer purchases a product or a
service online, he/she pays for it through online transaction. Let’s find
out more about it.
Browse more Topics under Emerging Modes Of Business
● e-Business
● Benefits and Limitations of e-Business
● Outsourcing
Stages of Online Transaction
There are three stages of Online Transactions
● Pre-purchase/Sale: In this stage, the product or service is
advertised online with some details for the customers.
● Purchase/Sale: When a customer likes a particular product or
service, he/she buys it and makes the payment online
● Delivery Stage: This is the final stage where the goods bought
are delivered to the consumer.
Steps Involved in Online Transaction
The following are the steps involved in Online Transaction:
1] Registration
● The consumer has to register online on the particular website to
buy a particular good or service.
● The customer’s email id, name, address, and other details are
saved and are safe with the website.
● For security reasons, the buyer’s ‘Account’ and his ‘Shopping
Cart’ is password protected.
2] Placing an Order
● When a customer likes a product or a service, he/she puts the
product in the ‘shopping cart’.
● The shopping cart gives a record of all the items selected by the
buyer to be purchased, the
number of units or quantity desired to be bought per item
selected and the price for each
item.
● The buyer then proceeds to the payment option after selecting
all the products.
3] Payment
The buyer then has to select the payment option, he/she has various
payment options. These payment pages are secured with very
high-level encryptions so that the personal financial information that
you enter (bank/card details) stay completely secure. Some ways in
which you can make this payment are:
● Cash On Delivery: The Cash on Delivery option lets the buyer
pay when he/she receives the product. Here, the payment is
made at the doorstep. The customer can pay in cash, or by debit
or credit card.
● Cheque: In this type of payment, the buyer sends a cheque to
the seller and the seller sends the product after the realization
of the cheque.
● Net Banking Transfer: Here, the payment is transferred from
the buyer’s account to the seller’s account electronically i.e.
through the internet. After the payment is received by the
seller, the seller dispatches the goods to the buyer.
● Credit or Debit Card: The buyer has to send his debit card or
credit card details to the seller, and a particular amount will be
deducted from his/her account.
● Digital Cash: Digital Cash is a form of electronic currency that
exists only in cyberspace and has no real physical properties.
Here the money in buyer’s bank account is converted into a
code that is saved on a microchip, a smart card or on the hard
drive of his computer. When he makes a purchase, he needs to
mention that particular code to the website and thereafter the
transaction is duly processed.
Solved Example For You
Q. What is e-commerce?
a. it refers to the use of the computer network
b. it refers to the idea of extracting business intelligence
c. both a and c
d. it refers to the buying and selling of goods and services
Sol. The correct answer is the option ”D”. E-commerce is the buying
and selling of goods and services, or the transmitting of funds or data,
over an electronic network, primarily the internet.
Q. In which of the following, personal digital assistants (PDAs) are
used for buying and selling of goods and services?
a. E-commerce
b. M-commerce
c. V-commerce
d. All of the above
Sol. The correct answer is the option ”B”. M-commerce (Mobile
Commerce) is the buying and selling of goods and services through
wireless handheld devices such as cellular telephone and personal
digital assistants (PDAs)
Outsourcing
About four out of five of the world’s 500 largest companies outsource
their work to India. But what does this outsourcing mean? And how
does it benefit the country and its workforce? In recent times
outsourcing has also been in the news due to the ethical questions it
raises. Let’s find out more about it.
Introduction to Outsourcing
Outsourcing is the process of contracting a business function or any
specific business activity to specialized agencies. Mostly, the non-core
areas such as sanitation, security, household, pantry, etc are
outsourced by the company. The company makes a formal agreement
with the agency.
The agency then sends the manpower required to the company. The
agency charges the company for their services and in turn pays wages
to their employees. Global competition has given rise to outsourcing.
With the help of outsourcing, companies can focus on their core areas
which leads to better profits and increase the quality of their product.
Advantages of Outsourcing
● Overall Cost Advantage: It eludes the need to hire individuals
in-house; hence recruitment and operational costs can be
minimized to a great extent. It reduces the cost and also saves
time and efforting on training cost.
● Stimulates Entrepreneurship, Employment, and Exports:
Outsourcing stimulates Entrepreneurship, Employment, and
Exports in the country from where outsourcing is done. Look at
the example of India. After the initial success of call centres,
there was a sudden emergence of many small scales and
medium scale BPo and KPO companies.
● Low Manpower Cost: The manpower cost is much lower than
that of the host country. This is exactly the case with India. We
have a very large educated workforce. And this causes the
labour cost in our country to be much lower.
● Access to Professional, Expert and High-quality Services:
Mostly, the tasks are given to people who are skilled in that
particular field. This provides us with a better level of service
and fewer chances of errors or misjudgment.
● Emphasis on Core Process Rather than the Supporting Ones:
With its help, companies can focus on their core areas which
lead to better profits and increase the quality of their product.
They simply outsource ancillary services.
● Investment Requirements are Reduced: The organization can
save on investing in the latest technology, software, and
infrastructure and let the outsourcing partner handle the entire
infrastructure.
● Increased Efficiency and Productivity: There is an increased
efficiency and productivity in the non – core areas of an
organization.
● Knowledge Sharing: Outsourcing enables the organizations to
share knowledge and best practices with each
other. It helps develop both the companies and also boosts
goodwill in the industry.
Disadvantages of Outsourcing
● Lack of Customer Focus: An outsourced vendor may be
catering to the needs of multiple organizations at a time. In
such situations, vendors may lack complete focus on an
individual organization’s tasks. And the reputation of the
organization may suffer as a result
● A Threat to Security and Confidentiality: The inside news of
the organization may be leaked to the third party, so there are
security issues. The leak of sensitive information may result in
losses to the company and also be an advantage to competitors.
● Dissatisfactory Services: Some of the common problem areas
with outsourcing include stretched delivery time and
sub-standard quality.
● Ethical Issues: The major ethical issue is taking away
employment opportunities from one’s own country. Instead of
creating employment and wealth in the origin country it gets
outsourced to another country. In recent times this has been
viewed by many as unethical and even unpatriotic.
● Other Disadvantages: Include misunderstanding of the contract,
lack of communication, poor quality and delayed
services amongst others.
Solved Examples For You
Q. Which one of the following is a category in which Business
Process Outsourcing can be categorized?
a. Back office
b. Front office
c. Offshore
d. All of the above
Sol. The correct answer is the option ”D”. In this, kind party agencies
perform your back office as well as front office data entry tasks
effectively in quick turnaround times. In the 90s we used it to refer to
big business sending jobs offshore.
Q. Outsourcing _______________.
a. restricts only to the contracting out of Information Technology
Enabled Services (ITES).
b. restricts only to the contracting out of non-core business
processes.
c. includes contracting out of manufacturing and R & D, as well
as service processes-both core and non-core-but, restricts only
to the domestic territory
d. includes off-shoring
Sol. The correct answer is the option ”D”. It is a practice of reducing
cost by a company by transferring a part of the company to another
company. It includes offshoring i.e. relocating a part of the business to
another place for reducing costs.
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