MANAGING E-BUSINESS

ABHILASHA SINGH – 302

Q1) Define meaning and scope of E-business and e-commerce and their different
elements.
E-business: e-business is the term which uses the Internet and online technologies to create
operational efficiencies, thereby increasing customer value. E-business involves several major
components: e-Business Marketing, Electronic Commerce, business intelligence (BI),
customer relationship management (CRM), supply chain management (SCM), enterprise
resource planning (ERP), e-commerce, conducting electronic transactions within the firm,
collaboration, and online activities among businesses. It is best to understand ebusiness with
the help of examples:
• Email marketing to existing customers and prospects is an ebusiness activity, as it
electronically conducts a business process -- in this case marketing.
• An online system that tracks inventory and triggers alerts at specific levels is also
ebusiness. Inventory management is a business process. When facilitated electronically,
it becomes part of ebusiness.
• A content management system that manages the work flow between content-developer,
editor, manager, and publisher is another example of ebusiness. In the absence of an
electronic work flow, the physical movement of paper files would conduct this process.
By electronically enabling it, we are now in the realm of ebusiness.
• An online induction program for new employees automates part of the whole of its offline
counterpart.

Business intelligence is about the activities that a small business may undertake to
collect, store, access, and analyze information about its market or competition to help with
decision making. When conducted online, BI is efficient and quick, helping companies to
identify noteworthy trends and make better decisions faster. BI has been described as “the
crystal ball of the 21st century.”

Customer relationship management (CRM) refers to a customer service approach that

E-commerce, on the other hand, is the marketing, selling, and buying of goods and services
online. It generates revenue, which e-business does not. Every Internet business is either pure-
play or brick-and-click. A pure-play business, such as Amazon and Zappos, has an online
presence only and uses the capabilities of the Internet to create a new business. Brick-and-
click businesses, such as Barnes and Noble and Vermont Country Store, combine a physical
presence with an online presence. These businesses use the Internet to supplement their
existing businesses.
The moment that an exchange of value occurs, e-business becomes e-commerce. E-commerce
is the revenue generator for businesses that choose to use the Internet to sell their goods and
services. Some small businesses rely on the Internet to grow and survive. Many small
businesses also look to e-commerce for their own business needs, such as computers and office
technology, capital equipment and supplies, office furnishings, inventory for online sale, or
other business-related goods. This is not surprising considering the pervasiveness of the
Internet for business transactions of all shapes and sizes.

Types of E-Commerce

There are several different types of e-commerce. A common classification system is with
respect to the nature of transactions or the relationships among participants. There are seven
major types of ecommerce:

1. Business-to-business (B2B)

e-commerce, where businesses focus on selling to other businesses or organizations, is the

2. Business-to-consumer (B2C)

is the earliest form of e-commerce, but it is second in size to B2B. It refers to retail sales
between businesses and individual consumers. Consumers gather information; purchase
physical goods, such as books and clothing; purchase information goods, such as electronic
material or digitized content, such as software; and, for information goods, receive products
over an electronic network.

3. Consumer-to-consumer (C2C)

e-commerce is where consumers sell products and personal services to each other with the
help of an online market maker to provide catalog, search engine, and transaction-clearing
capabilities so that products can be easily displayed, discovered, and paid for. The most well-
known C2C business is eBay, but there are many other online market makers as well.
Craigslist is an extremely popular small e-commerce business for placing classified ads.

4. Business-to-government (B2G)

e-commerce can generally be defined as transactions with the government. The Internet is
used for procurement, filing taxes, licensing procedures, business registrations, and other
government-related operations. This is an insignificant segment of e-commerce in terms of
volume, but it is growing.

5. Consumer-to-business (C2B)

e-commerce is between private individuals who use the Internet to sell products or services to
organizations and individuals who seek sellers to bid on products or services. Elance is an
example of C2B where a consumer posts a project with a set budget deadline and within hours
companies and/or individuals review the consumer’s requirements and bid on the project. The
consumer reviews the bids and selects the company or individual that will complete the
project. Elance empowers consumers around the world by providing the meeting ground and
platform for such transactions. The Best Deals on Hotels, Flights and Rental Cars. is a
wellknown example of C2B e-commerce.
6. Mobile commerce (m-commerce)

refers to the purchase of goods and services through wireless technology, such as cell phones,
and handheld devices, such as Blackberries and iPhones. Japan has the lead in m-commerce,
but it is expected to grow rapidly in the United States over the next several years. eMarketer
predicts mobile content revenues will grow to more than $3.53 billion in 2014, a compound
annual growth rate of nearly 20 percent for the period 2009–2014, with the fastest growth
coming from mobile music.

7. Peer-to-peer (P2P)

technology makes it possible for Internet users to share files and computer resources directly
without having to go through a central web server. P2P began with Napster offering free music
downloads via a file-sharing system. Tamago launched the world’s first P2P commerce
system in 2005, which allowed people to sell every type of digital media directly from their
computers to customers all over the world. People who publish videos, photos, music, e-
books, and so forth can earn royalties, while buyers earn commissions for distributing media
to others.
 Q2) Summarise the main reasons for adoption of e-commerce and e-business and the
barriers that may restrict adoption
Most brick-and-mortar businesses are forced to compete differently with the emergence of e-
business and e-commerce. E-Business is the domain of business intel, supply chain
management, electronic transfer, and cross-collaboration of online platforms. The words e-
business and e-commerce are often used interchangeably but there is a subtle difference
between the two. While e-business is the range of business activities conducted online, e-
commerce is actually the buying and selling of goods and services on the internet.

Many traditional businesses have found that there are many perks to be gained from having
an online platform. Typically, e-businesses have lower overheads, are more convenient to
shoppers, benefit from little to no inventory costs, and reach a much wider audience specific
to their niche, to name a few.

Barriers to adoption:

1. Quality evaluation: On the Internet, it is more or less impossible to make sure, beyond doubt,
that (tangible) products have the desired features (e.g. design, material, colour, fit), giving rise
to a quality evaluation barrier to e-commerce.
2. Security risks. It has been suggested that transaction security (such as the credit card number
being picked up by third-party hackers) is mostly a perceptual problem in e-commerce.
Nevertheless, the fact remains that it may be one of the more complex barriers to be overcome.
3. Lack of trust in virtual sellers. The fear of fraud and risk of loss has commonly been cited as
a significant barrier to B2C e-commerce, with empirical research findings supporting this
assumption.
4. Delivery times. In tangible product categories, any home-shopping method involves delivery
times which mean that the Internet is at a disadvantage to physical stores as it fails to meet the
customers’ need for instant gratification. Consumers may thus be reluctant to wait for the
delivery of ordered goods for days/weeks if the same product can be collected immediately in
physical outlets.
5. Lack of personal service. While e-commerce offers great opportunities for one-to-one
marketing, it significantly reduces, or even puts an end to the personal service characterizing
traditional commerce.
6. Time-consuming nature. As noted, e-commerce may offer consumers savings in time. In
practice, however, using the Internet for commercial purposes may prove to be too much time
consuming for many users. There are multiple reasons for this: (i) difficulties locating
Websites/products/services (ii) registration procedures required to access services (iii) making
price comparisons.
7. Cost of entry. Cost of acquiring a computer, etc.
8. Cost of use. Internet access fees.
9. Limited Internet/ computer experience. Reluctance/difficulties operating computers and/or
browsing the Web.
10. Poor connection speed. Due to low bandwidth connections, using the Internet may be time
consuming, and thus frustrating.
Q3) Outline the ongoing business challenges of managing e-commerce and e-business in
an organisation
E-business opportunities have to be balanced against the risks of introducing e-business
services which vary from strategic risks to practical risks.
One of the main strategic risks is making the wrong decision about e-business investments. In
every business sector, some companies have taken advantage of e-business and gained a
competitive advantage. But others have invested in e-business without achieving the hoped-
for returns, either because the execution of the plan was flawed, or simply because the planned
approaches used for their market were inappropriate.
There are also many practical risks to manage which can lead to bad customer experiences
which lead to damage to the reputation of the company.
Examples of poor online customer experience which you will certainly be familiar with
include:
• Web sites that fail because of a spike in visitor traffic after a peak-hour TV advertising
campaign.
• Hackers penetrating the security of the system and stealing credit card details. A
company e-mails customers without receiving their permission, so annoying customers
and potentially breaking privacy and data protection laws.
• Problems with fulfilment of goods ordered online, meaning customer orders go missing
or are delayed and the customer never returns.
• E-mail customer-service enquiries from the web site don’t reach the right person and are
ignored.