Business Studies
Ch-5-Emerging Modes of Business
Handout
Name:________________ Class-XI Sec__
Modes of business mean the manner in which business is conducting and emerging
means changes that are happening today. Today business is facing cut throat
competition. Thus, in order to survive and to meet the ever growing demand of the
customers, it is essential that the business firms should evolve newer and better
ways of doing things. Business carried out today has undergone fundamental
changes. Main changes that were happened in these days are:
a. Digitization
b. Business Process out sourcing (BPO).
c. Internationalization and Globalization.
E- Business
E-business refers to carrying on business activities with the help of internet.
Business activities comprise of industry, commerce and trade. So e-business
means conduct of industry, trade and commerce activities through internet. These
electronic business processes include buying and selling products, serving
customers, processing payments, managing production control, collaborating with
business partners, sharing information, recruiting employees etc.E-business offers
the convenience of 24 hours a day X 7 days a week X 365 days a year businesses-
business opens up new avenues for businessmen and improves efficiency of
conventional business process, marketing and services.
E-BUSINESS VERSUS E-COMMERCE
Terms e-commerce and e-Business are used interchangeably but they are distinct
concepts. E-commerce means buying and selling of goods and services over the
internet. E-commerce is a part of E.business. E.business is a wider term than e-
commerce. E-business include not only buying and selling of goods and services
through internet(e-commerce) but also all internet based transactions like
monitoring and exchange information ,customer relationship management,
collaborative product designing etc. The scope of e-Business is quite vast.
Business functions like production, finance, marketing etc., and managerial
activities such as planning, organizing, staffing and controlling can be carried out
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effectively with the help of computer networks. These all are come under the term
of e-business.
Scope of e-business (e-Business models)
The scope of e-business is very wide. Business functions like production,
finance, marketing, personnel etc., and managerial activities such as planning,
organizing, staffing and controlling can be carried out effectively through
computer networks. Various parties are involved in electronic transactions. Thus
on the basis of parties involved the electronic transaction can be classified into the
following four categories:
Scope of e-business are:
1) Business to Business (B2B)
2) Business to Consumer (B2C)
3) Consumer to Consumer (C2C)
4) Intra B- Commerce
1.Business to Business (B2B)
Here, both the parties involved in e-commerce transactions are business firms. So
it is called Business to Business (B2B) commerce. It is the exchange of product,
services or information between businesses firms with the help of internet. Around
80% of e- commerce transactions are of this type.
Examples - B2B transactions:-
- Placing order with suppliers
- Transactions between business firms like trade negotiations.
- Transfer of goods from one branch to another
- Making payments to suppliers
- Receiving and sending documents like purchase orders or invoices.
B2B e-commerce helps in eliminating unnecessary inventory buildup for both the
buyer and the seller. The reason is that in B2B e-commerce ,sellers know the
production schedule of the buyer and the buyer also knows various alternative
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sources of raw materials. It also removes the geographic fragmentation of the
market.
2.Business to Consumer (B2C)
E-commerce transactions taking place between business firms and customers are
called Business to Customers (B2C) commerce.B2C involves online selling,
online advertisement, online payment, online compliant registration, after sales
service through online etc.B2C commerce permits conduct of these activities at a
much lower cost but high speed.B2C commerce enables a business to be in touch
with its customers 24 hours.
Examples - B2C transactions :-Order placed by consumer through online
Electronic payment made by consumers Register complaints through online
Provide customer support through internet
3.Intra-B Commerce: Here, parties involved in the electronic transactions are from
within a given business firm, hence, the name intra-B commerce. While e-
business is a much wider term and also includes the use of intranet for managing
interactions and dealings among various departments and persons within a firm.
It is largely due to use of intra-B commerce that today it has become possible for
the firms to go in for flexible manufacturing. Use of computer networks makes it
possible for the marketing department to interact matters through online Issue
notices to employees as e-mail
4.Consumer to Consumer (C2C)
It involves transactions between customers. There are many sites offering free
classifieds, auctions forums where individuals can buy and sell products and
services. C2C commerce provides a market for dealing in goods for which there
is no established market.eg.selling of used books or cars.
Advantages of E-business:
Advantages of e-commerce over traditional commerce are the following:
1.Global reach/access
E – Business provides global market for both buyers and sellers. Buyers can select
his needed goods from anywhere in the world with the help of internet. In e-
business the boundaries of sellers’ market is not defined by geography but by the
coverage of computer network, it is worldwide.
2.Speed
Through e-business information can be exchanged, buying and selling etc can be
done just with the click of a mouse. This type of sale is more suitable in case of
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product like software, movies, music etc.
3.Convenience
E-business offers the advantage of accessing anything, anywhere, anytime.
4.Easy to form and lower investment requirements
Unlike physical stores E.business is relatively easy to start. There is no need to
construct building, keep stock, decorate shop etc.
5.Movement towards a paperless society: Use of internet has significantly reduced
dependence on paper work. Granting permissions, approvals etc. can be done
through online
Limitations of E-business:
Doing business in electronic mode suffers from certain limitations. Some of
them are:
1.Low personal touch
E-business is not suitable for business requiring high level of personal touch
like medical services.
2.Long time to complete transactions
Information can flow at the click of a mouse, but the physical delivery of the
product takes time.
3.High risk due to anonymity and non-traceability of the parties
It is difficult to identify actual party to the transactions as transactions take
place in the name of cyber personalities. One may not know even the location
from where parties are transacting. It is riskier, therefore, transaction through
internet.
4.Need for technology capability and competence of parties to e-business:
Computer literacy is necessary to participate in e-business. It is one of
hindrance in the field of e-business.
5.People resistance
The process of adjustment to new technology and new way of doing thing
causes stress and a sense of insecurity. As a result, people may resist an
organization’s plans of entry into e-business.
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