Chapter: Emerging Modes of Business

• Introduction

  • Meaning of e-business
  • Shift from traditional business to digital networks
  • Scope of digital transactions

• E-Business vs. E-Commerce

  • E-Commerce
    • Buying and selling of products/services over the internet
    • Subset of e-business
  • E-Business
    • Broader term
    • Includes e-commerce + industry, commerce, and trade processes (production, inventory management, product development, accounting, finance, and HRM)

• Benefits of E-Business

  • Ease of formation and lower investment required
  • Convenience (24/7 availability)
  • Speed and efficiency (quick search and delivery)
  • Global reach / access to a worldwide market
  • Paperless society / reduction in paperwork

• Limitations of E-Business

  • Low personal touch (lack of physical interaction)
  • Incongruence between order taking and delivery speed
  • Need for technology capability and competence in parties
  • Security and privacy risks (hacking, credit card fraud)
  • Ethical issues (cyber-squatting, privacy invasion)

• Online Transactions

  • Pre-purchase / Information Stage (Advertising and browsing)
  • Purchase Stage (Price negotiation, order placement, and payment)
  • Delivery Stage (Digital download or physical shipping)
  • Digital / Online Payments
    • Credit and Debit Cards
    • Net Banking
    • Unified Payments Interface (UPI) / Mobile Wallets
    • Cash on Delivery (COD)

• Security and Safety of E-Business Transactions

  • Risks
    • Transaction risks (default on order, delivery, or payment)
    • Data storage and transmission risks (hacking, virus, interception)
    • Intellectual property and privacy risks
  • Safeguards
    • Encryption (SSL/TLS)
    • Anti-virus software
    • Cyber security protocols
    • Verification and confirmation systems

• Outsourcing / BPO (Business Process Outsourcing)

  • Meaning of Outsourcing (contracting non-core business activities to third parties)
  • Features
    • Contracting out non-core activities
    • Services used extensively (IT, customer care, HR, payroll)
    • Enabled by modern telecommunications and internet
  • Need / Advantages
    • Focusing on core competencies
    • Cost reduction and operational efficiency
    • Access to professional expertise
    • Growth and economic development (employment generation)
  • Concerns / Disadvantages
    • Confidentiality and data security risks
    • Ethical concerns (sweatshops, job displacement in home country)
    • Misunderstanding of service standards/quality

• Online Trading vs. Traditional Trading (Comparison)

  • Formation: Complex vs. Simple
  • Physical presence: Not required vs. Essential
  • Operating cost: Low vs. High
  • Touch/Feel of goods: Not possible vs. Possible
  • Global reach: High vs. Limited