UNIT-5 EMERGING MODES OF BUSINESS

MEANING OF E- BUSINESS:
E-business may be defined as the conduct of industry, trade and commerce using the computer networks. It
includes firm’s interactions with its customers and suppliers over the internet and performing business
functions such as production, inventory management, product designing and development, accounting and
finance and human resource management using computer network and programming.
E-BUSINESS AND E-COMMERCE
The terms e-business and e-commerce are used interchangeably but they differ in their scope. Just as the
term ‘business’ is a broader term than ‘commerce’, e-business is a more elaborate term and comprises various
business transactions and functions conducted electronically. Whereas e-commerce covers a firm’s
interactions with its customers and suppliers over the internet. E –Business is a wider term and E-commerce is
part of E-business.
SCOPE OF E-BUSINESS:
The scope of e-business is quite vast, almost all types of business functions such as production, finance,
marketing and personnel administration as well as managerial activities like planning, organising and
controlling, carried out over computer network is part of e-business.
The scope of E-Business can also be viewed in terms of people or parties involved in electronic transactions.
Viewed from this perspective, a firm’s electronic transactions and networks can be categorized as:
1. B2B Commerce: In Business -to-Business(B2B), both the parties involved in e-commerce transactions
are business firms, such as manufacturer and supplier, wholesaler and retailer etc. It includes broad
spectrum of transactions between business firms related to the procurement of raw material, and the
distribution of finished goods.
2. B2C Commerce: In Business-to-customers (B2C), transaction takes place between business firms and
the customers. The B2C is a model where business sells goods or services directly to customers through
online. However, the scope of B2C commerce is confined not only to sale of goods or services but also
include online customer service, promotion campaigns, data access or survey to understand customer
needs and preferences etc.
3. Intra-B Commerce: It refers to electronics transaction between different people and department
within a business firm. It aims at improving efficiency and effectiveness in operational activities. Intra B
Commerce helps in better coordination between different departments, effective utilization of physical
resources, effective human resource management, faster and well informed decision making, effective
handling of customers’ orders etc.
4. C2C Commerce: It is a business model that enables customers to sell goods or services to other
customers online. This type of commerce is best suited for dealing in goods for which there is no
established market mechanism, for example, selling used books or furniture either on cash or barter
basis. C2C companies such as E-bay, Quikr, OLX etc. facilitates online trade between customers

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BENEFITS OF E-BUSINESS:
1. Ease of formation and lower investment requirements: E-business is relatively easy to start with lower
investment requirement. The benefits of internet technology are same for big or small business. A
successful business can be established with low investment through proper networking with the
customers with the help of technology.
2. Convenience: E- business provides flexibility to both the seller and buyer. Online shopping allows the
customers to buy goods at any time as per their convenience. E-business also provide flexibility to the
people in the organization to work at time and place convenient to them and access anything from
anywhere and at anytime
3. Speed: As E-Business transactions are done electronically, it gets completed with a click of the mouse.
Online business becomes more attractive in the case of information-intensive products such as
software's, movies, music, e-books and journals that can be delivered online.
4. 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 gives freedom to buyer to choose products from
almost any part of the world.
5. Movement towards a paperless society: Use of internet has considerably reduced dependence on
paperwork. Not only business sector even the government departments have changed their working
and provide online facilities for granting permission, license, approval and documents to the public.

DIFFERENCE BETWEEN TRADITIONAL AND E-BUSINESS

Sl.No. BASIS TRADITIONAL BUSINESS E-BUSINESS
1 Formation It is difficult to form It is easy to form
2 Physical Presence Needs physical space No Physical space is required
3 Locational requirements It is set up near to the source of It has no locational requirement
raw materials or the market for the and can be operated from
products anywhere.
4 Cost of setting up High setup cost Low setup cost as there is no
requirement of physical facilities
5 Processing Cycle Longer processing cycle Shorter processing cycle
6 Reach Covers certain geographical area Access to market across the
world
7 Transaction risk Low due to face-to-face contact High due to the distance and
between buyer and seller anonymity of the parties
8 Physical sampling It allows customer to have physical It provides virtual look of the
look at the product and its product and its specification.
features.

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