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.