Chapter: Emerging Modes of Business
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1. Concept of e-Business
In the modern era, business is no longer restricted to physical stores. e-Business refers to the conduct of industry, trade, and commerce using computer networks (the Internet). It is a broader term than e-commerce as it includes not just buying and selling, but also production, human resource management, and accounting.
2. Scope of e-Business
The scope of e-Business can be categorized into four directions based on the parties involved:
- B2B (Business-to-Business): Transactions between two business firms (e.g., a manufacturer buying spare parts from a supplier).
- B2C (Business-to-Consumer): Transactions between a business and its end customers (e.g., buying a laptop from Amazon).
- C2C (Consumer-to-Consumer): Transactions where both parties are consumers (e.g., selling a used car on OLX).
- Intra-B Commerce: Electronic transactions within the same business firm (e.g., Marketing department communicating with the Production department).
3. e-Business vs Traditional Business
| Basis | Traditional Business | e-Business |
|---|---|---|
| Formation | Difficult (More formalities) | Simple (Easy to start) |
| Physical Presence | Required | Not Required |
| Setting-up Cost | High | Low |
| Global Reach | Limited | Unlimited (Global) |
| Risk involved | Low (Face-to-face) | High (Anonymity) |
4. Outsourcing (BPO)
Outsourcing is the process of contracting out non-core business activities to a third-party specialist. For example, a bank might outsource its "customer care" or "security services" to another company.
Why do we need Outsourcing?- Focus on Core Activities: Management can focus on what they do best (e.g., a school focuses on teaching, while outsourcing canteen services).
- Cost Reduction: Specialized agencies can do the same work more cheaply due to economies of scale.
- Striving for Excellence: High-quality work is received as the work is handled by experts.
Important Q&A for Exams
Answer: It refers to the gap between those who have access to modern information and communication technology (computers, internet) and those who do not. It is a major limitation for the growth of e-business in rural areas.
Answer: A smart card is a plastic card with an embedded microchip that stores data and can be used for financial transactions, identification, and authentication in e-business.
Answer: 1. Transaction Risk: Default on delivery or payment. 2. Data Storage Risk: Risk of hacking or virus attacks on sensitive customer information.
