SHESHADRIPURAM COLLAGE

e-Business Recent trends in marketing

Mentor: Prof. Mallika Project by: Madhushree S. Sujatha Nithya Ravikumar Devipriya Nandini Rao 8/5/2014

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E-business Electronic Business, commonly referred to as ‘e-Business’ may be defined as the utilization of Information and Communication Technologies (ICT) in support of all the activities of business. Commerce constitutes the exchange of products and services between businesses, groups and individuals and can be seen as one of the essential activities of any business.

E-Business (electronic business) is, in its simplest form, the

conduct of business on the internet. It is a more generic term than e-commerce because it refers to not only buying and selling but also servicing customers and collaborating with business partners. Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers. International Business Machines (IBM), in 1997, was one of the first to use the term when it launched a campaign built around the term. Companies are using the web to buy parts and supplies from other companies, to collaborate on sales promotions, and to do joint research.

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Benefits to Entrepreneurs The internet and the emergence of e-Business, has provided entrepreneurs with many new advantages and opportunities. The internet has created a business environment in which time and distance are less important, people have access to more information to help them make decisions and consumers have better access to a broader range of product and services. A significant benefit to entrepreneurs is that the initial investments for starting of an e-Business is generally lower than the costs associated with starting an equivalent business using a traditional model.

What is e Business requirement? Full integration between all internal organizational processes and

elements of the value network. Scope across the enterprise and beyond Requires transformation, a change to business culture and linking

of processes with all business partners It should be incorporated as part of traditional marketing

strategy.

Useful e-Business Terms Business-to-Business (B2B) Interaction between businesses either in an established supply chain, or with trading partners. The ability to electronically link your business with that of your suppliers could lead to faster restocking times, lower stock levels, and lower costs. If you have been considering engaging in business-to-consumer, e-commerce, give some thought also to ways in which you could lower costs or increase your efficiency by engaging in business-to-business e-commerce. Business Automation

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A contact manager, job activity and job tracking system that allows fast and flexible communications with a mobile workforce. Content Management System A software package that creates and maintains content on a website by providing a set of tools for creating. Editing and publishing the web pages and directories that makes up a website. e-CRM (Electronic Customer Relationship Management) An integrated sales, marketing and service that is used to identify, attract and retain an organization’s customers through innovative Internet technology. e-Marketplace (Electronic Marketplace) An online trading forum where companies buy and sell products and services using different trading and purchasing mechanisms, including catalogues, auctions, reverse auctions, requests for quote (RFQ) and requests for tender (RFT). e-Procurement (Electronic Procurement) A business-to-business (B2B) purchasing system that offers electronic purchase order processing and enhanced administrative functions for buyers and suppliers. Extranet A worldwide network of computers that facilitates data communication services such as remote login, file transfer, electronic mail, newsgroups and the World Wide Web. Intranet An intranet partially accessible to authorized outsiders. Whereas an intranet resides behind a firewall and is accessible only to people who are members of the same company or organization, an extranet provides various levels of accessibility to outsiders. Local Area Network (LAN)

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A network of computers communicating over short distances in restricted areas, such as a campus of a university. Many LANs have connections to larger networks.

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E-Business Model

The e-Business mode, like any business model, describes how a company functions; how it provides a product or service, how it generates revenue, and how it will create and adapt to new markets and technologies. It has four traditional components as shown in the below figure as the e-Business Model. These are the e-Business concept, value proposition, sources of revenue, and the required activities, resources, and capabilities. In a successful business, all of its business model components work together in a cooperative and supportive fashion. E-Business Concept: The e-business concept describes the rationale of the business, its goals and vision, and products or offerings from which it will earn revenue. A successful concept is based on a market analysis that identifies customers likely to purchase the product and how much they are willing to pay for it.

e-Business Model e-Business Concept

Value Proposition

Sources of Revenue

Activities, Resource, Capabilities

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Value Proposition : The value proposition describes the value that the company will provide to its customers and, sometimes, to others as well. With a value proposition the company attempts to offer better value than competitors so that the buyer will benefit most with this product. A value proposition may include one or more of the following points:

I. Reduce price II. Improved service or convenience such as the “1 click” checkout

III. Speed of delivery and assistance IV. Products that lead to increased efficiency and productivity V. Access to a large and available inventory that presents options for

the buyer Sources of Revenue: Depending on the business model, several revenue sources may be available to an e-business. Many online businesses will have a three or four of these sources. A mix of revenue sources is often referred to as a revenue model but may be mistakenly called a business model. Some of these sources of revenue are: Advertising Affiliation Agent commissions Licensing Sales commissions Sales profits Sponsorship Subscription Syndication Use Fees

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For large public-private or government projects revenue sources might also include: Bonds usually for large capital expenditures Taxes, primarily income, property and sales taxes Use fees and tolls

With small fast-growing companies such as e-Business start-ups, investors often track expected revenues and revenue growth and may make changes to increase revenue. However, after the Dot-Com boom ended, more traditional measures such as cash flow and earnings have came back into favour as means of evaluation. Activities, Resources and Capabilities: The activities, resources and capabilities of a business are sometimes known as its requirements. In order to perform the activities required to carry out the mission of the business, certain resources are needed; for example, employees with certain skills, or capabilities, are needed to perform activities correctly and efficiently. Also, inventions, processes and other intellectual property may add to the individual knowledge of an employee to develop a competence in the performance of the required activities.

Market size and growth India’s e-commerce market was worth about $2.5 billion in 2009, it went up to $6.3 billion in 2011 and $14 billion in 2012. [It was printed in the Hindustan Times paper in 31 December 2012] About 7.5% of this is travel related (airline tickets, railway tickets, hotel bookings, online mobile recharge etc.).

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Key drivers in Indian e-business are:- Busy lifestyles, urban traffic congestion and lack of time

for offline shopping. Increased usage of online classified sites, with more

consumer buying and selling second-hand goods Education of the online marketplace model with sites like

eBay, Flipkart, Snapdeal, etc. The evaluation of e-commerce has come to full circle with marketplace models taking center stage again.

Benefits and Opportunities of e-Business Benefits and opportunities an enterprise can have when using e-Business are related to its e-Business strategy and commonly are multiple. The e-Business should help the enterprise in meeting its business goals and the needs and expectations of its customers, partners and suppliers. An enterprise should become more competitive. New Business Models and more Revenue: The enterprise can create additional revenue. Some businesses are fortunate because they provide information, goods and services that users are willing to purchase online. Such sectors are travel, financial services, books, CDs, entertainment and many items traditionally bought through mail-order catalogues. For many businesses this is a whole new revenue stream. One of the great benefits of e-Business is that it can help broaden an enterprise’s customer base at a relatively low cost. As more and more people get access to the Internet and become confident e-Business users, the potential to expand customer-bases will increase proportionately. An appropriately designed and promoted website can attract new customers and open new markets for products and services e.g. by providing affordable access to customers globally and offering access to products and services for people with a disability.

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For some, their website will not generate income directly; rather it supports their off-line activities and contributes to meeting business goals and financial targets. The internet can be used to help businesses research their business plans and as a tool for achieving the aims of the plan. The Web provides a relatively cheap means of investigating competitors, testing out the market, entering new markets and seeking new strategic partners. Extended Hours: 24/7/365: Increasingly today, the terms “available” and “accessible” to a business mean twenty-four hours a day, seven days a week access to information products and services. Customers, suppliers and interested parties are less and less satisfied with being restricted to the traditional opening hours of business and will not be impressed if they cannot do such things as order items or discover information for themselves in the comfort and their own homes and offices when it suits them. The expectations of online audiences will not diminish over time – they will only increase. Cost Reduction: There are many ways in which an enterprise can save costs and improve operation efficiency through e-Business. Data entered online into the organizations systems bypasses staff and fees them from unproductive tasks, giving them more time for the things that matter. It can reduce the time from administrative tasks. Accounting systems reduce the processing of accounts, reconciliation, banking and can improve cash-flow. Communication also offers tools for cheaper and faster procurements. Advantages of E-Business Worldwide Presence: This is the highest advantage of conducting

business online. A firm engaging in e-Business can have a nationwide or worldwide presence IBM was one of the first Companies to use the terms e-Business to refer to servicing customers.

E-business has resulted in improved customer service: Readily available customer service may help in encouraging the customer to know more about the product or service. Moreover, Payments can

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be made online, and product can be shipped to the customer without the customer having to leave the house.

Global Connectivity: It connects the consumers and business people from world through internet.

Time Saving: Customers can get products at their door steps by just few clicks. This gives comfort to customers. This saves time.

This supports the elderly and disabled people who cannot go out to get their needs

Disadvantages of E-Business o Costly: Substantial resources are required for redefining product

lines in order to sell online. Upgrading computer systems, training personnel and updating websites requires substantial resources.

o Data Security: To carry out online transactions the websites ask for your e-mail address and other contact details. Customers break at the mention of providing personal details, best defining of some nature occurs.

o Bank frauds: some people use this e-business in wrong way. There is a possibility of misusing the buyer’s bank details.

o E-disguise: There are many chances that customers get cheated by not providing the products as shown in websites.

o Threats of computer viruses: The users of website might get the viruses if the websites has some malware.