CHAPTER 5:- EMERGING MODE OF BUSINESS

Meaning of e-business: In this age of internet, the world commerce has gradually started linking with it. This
has brought a new concept of commerce called e-commerce/e-business. Now we are capable of reaching the
users of Internet all over the world simply by opening a shop on the Internet. The Internet users can order for
the goods, receive their delivery and make their payment while sitting at their home on the Internet.
E-Business ans E-commerce
* E-business is a more boarder term than e-Commerce.
* E-Commerce course a firm's interactions with its customer's and
supplies over the internet.
* E-Business includes not only e-commerce but also other
electronically conducted business functions such as production ,
inventory management, product development accounting and
finance and human resources management.

Scope of e-Business: It can be understood by the view point of the parties involved and making transactions:
1. B2B Commerce: It is that business activity in which two firms or two business units make electro- nic
transaction. For example- one can be producer firm and other a supplier firm.
2. B2C Commerce: Business to customer. In this one party is a firm and other party is a customer. On one hand
a customer can seek information through Internet about products, place orders, get some items and make
payments and on the other hand the firm can make a survey any time to know who is buying and can also know
the satisfaction level of customers. In modern times, call centers can provide these information.
3. C2C Commerce: Customer to Customer Commerce Under it, both the parties involved in elect- ronic
transaction are customers. It is required for the buying and selling of those goods for which there are no
established markets. For example- selling old car through internet.
4. Intra-B Commerce: Within business Commerce Under it, the parties involved in the electronic transaction
are the two departments of same business. For Example, through internet it is possible for the marketing
department to interact constantly with the production department and get the customized goods made as per the
requirement of customers.

Difference between e-
Business & Traditional
Business
e-Business Traditional Business
Basis
1. Ease of formation Simple Difficult
2. Physical presence Not required Required
3. Cost of setting up None Yes, in terms of finding a location
which is nearer to the source of raw
materials or the market for the products.
4. Operating cost Low as no requirement of physical High, because various costs has to be
facilities. incurred in terms of rent payment etc.
5. Nature of contact with Low as a result of reliance on a High due to fixed charges associated
the suppliers and the network of relationships rather than with investment in procurement and
customers ownership of resources. storage, production, marketing and
distribution facilities
6. Nature of Internal Direct Indirect through intermediaries
communication
7. Response time for Non-hierarchical. Hierarchical
meeting customers
/ Internal
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 Allowing direct vertical, horizontal From top level management to middle
and diagnostic communication level management, and then to lower
instantaneously. level management to operatives.
8. Shape of the Because of the directness of the order Vertical/ tall due to hierarchy or chain
Organizational and communication, it is horizontal/ of command.
Structure flat.
9. Business processes & Simultaneous (concurrence) different Sequential procedure i.e. Purchase-
Length of cycle processes take place at a time. production/ operation marketing -
Business process cycle is therefore sales. The business processes cycle is
shorter. therefore longer.
10. Opportunity for Less More, because of higher personal
interpersonal touch contact.
11. Opportunity for Less. However, for digital products More
physical pre- sampling of such an opportunity is tremendous.
the products One can pre-sample books, journals
etc.
12. Ease of going global Much, as cyberspace is truly without Less, because a lot of legal formalities
boundaries. have to be done
13. Govt. Patronage Much as IT sector is among the top Shrinking with time.
most priorities of the government.
14. Nature of human Technically & professionally Semi-skilled & even semi- skilled
capital qualified personnel needed. manpower needed.
15. Transaction risk High due to the distance &
anonymity of the parties. face to face contact.

Benefits of e-Business

World wide reach :- Internet gives businessmen an extended market. New customers come in contact with them.
This results in increase in sales.
2. Elimination of Middlemen :- Ever since the e-Business came into existence, the wholesalers and retailers
have started disappearing. Now, most of the producers have started having, direct contact with customers. As a
result the consumer get goods on less price.
3. Easy Distribution Process :- Many types of information and services be received on computer through e-
business. This has simplified the system of distribution and has also made it less costly
4. Lower investment required :- In this. you don't require any big showroom or huge investment. You need
only computer and Internet.
5. Easy to launch new products :- Any company can launch its new product in the market through the medium
of E-Business. A complete information about the product is made available on Internet. In this way the consumer
and other businessmen get information about the new product while sitting at home.
6. Movement towards a paper less Society :- Use of internet has considerably reduced dependence on paper
work.

Limitation of e-Business
Low personal Touch :- (Lacks personal touch with customer as it is conducted over the internet.)
ii) Incongruence between Order taking/giving and order fulfillment speed. (fast in order taking but slow in order
fulfillment)
iii) Need for Technology Capability and competence of parties to e-business.(fairly high degree of families with
computer working, internet facility required.)
iv) Increased risk due to Anonymity and Non-traceability of Parties :-
(Difficult to establish/check identity & location, someone else may transact in your name risk of leakage of
confidential information such as credit card details.)
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(v)People Resistance (People have a tendency to resist change due to insecurity).

QUESTIONS:-

Q. MCQ type Questions MARK

NO
1 1
type of ____________ of e-business transaction
(a) C2B Commerce (b) B2C Commerce
(c) Intro B Commerce (d) C2C Commerce
2 1
OLX is an example of which of the following category of e- business:
(a) B2B (b) B2C (c) C2C (d) Intra B
3 1
A Mail sent by Purchase department to Production department is example of
which of the following:
(a) B2B (b) B2C (c) C2C (d) Intra B
4 1

into all these directions except:

(a) B2B (b) B2C (c) C2C (d) Intra-B

5 1
The term B2B commerce stands for:
(a) Business to Buyer (b) Buyer to Buyer
(c) Buyer to Business (d) Business to Business
6 1
Your father has an old scooter and you want to replace it with a new scooter.
Your father is not ready to sell old scooter because he thinks he will not get
good price for his old scooter and he cannot afford a new scooter. You found
a buyer for your scooter at OLX who was ready to buy your scooter at a good
price so you finally sold your old scooter. Which type of e-commerce did you
use?
(a) B2B (b) B2C (c) B2E (d) C2C
7 1
The dimension of e-business that allows the customers to stay-in-touch with
the business round the clock is
a) B 2 B
b) C 2 B
c) B 2 E
d) C 2 C

8 1
In this dimension of e-business the different departments of a firm constantly
interact with each other for achieving efficiency in operations,
a) B 2 B
b) C 2 B
c) Intra-B
d) C 2 C
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9 1
e-bussiness does not include.?
a) a business interaction with its supplier .
b) a business interaction with its customer .
c) interaction among the various departments within the business.
d)interaction among the geographically dispersed unit of the business.

10 1
Which payment method is not suitable in e-business?
a. Cash on delivery
b. E-cash
c. Cheques
d. Credit or Debit card

11 Use of ATM to withdrew money is an example of

(a) B2B Commerce (b) B2C Commerce
(c) C2C (d) C2B Commerce
12 B2B Commerce means:

(d) None of the above

13 Find the odd one out
(a) Amazon (b) Snapdeal
(c) Flipcart (d) Snapchat
Short Answer Type Questions (Case Study and Others)
14 State any three differences between e-business and traditional business. 3
15 Describe briefly any two applications of e-business. 3
16 Discuss the salient aspects of B2B commerce. 3
17 Discuss the salient aspects of B2C commerce. 3
18 4
You are Rajat, a marketing manager in Global Infotech pvt ltd. You have
been in constant touch with the Production Manager, [Link] Saxena, of
your firm through computer network. You have been discussing with him the
requirements of products based on the present demand in the market and
suggesting him various strategies to enhance the production level in order to
meet the raised demand. What type of E-commerce you are indulged in?
19 4
You are Priya, a student of Class XI of GEMS Cambridge International
School, Gurgaon. You have been selected by the Debaters Club of your
school to participate in the Inter Zone Debate Competition. The topic of
-business
debate in favour of the topic.
20 4
You are Shilpa, an avid writer. Due to the pandemic COVID-19, you are
facing a lot of difficulty in pursuing your passion for writing as you find it
extremely difficult in purchasing the paper reams from the shops and giving
your content for publishing. Which component of E-Business you may rely
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 upon for continuing your work and why?
21 Discuss the salient aspects of C2C commerce. 4
Long Answer Type Questions (Case Study and Others)
22 Discuss the limitations of electronic mode of doing business. Are these 6
limitations severe enough to restrict its scope? Give reasons for your answer.
23 [Link] and [Link] are examples of well-known websites 6
used to conduct business. Tarasha's sofa set got spoild in rain. Her friend
suggested that she should changethe fabric so that it looks new and put it for
sale on [Link]. Tarasha followed her friend's advice and got her sofa
repaired so that it looks better and uploaded nicely clicked
pictures on the website without disclosing the fact that it was damaged from
inside. She found a buyer and sold it for Rs. 10,000. After five days the buyer
found the real state of sofa set and called Tarasha but she did not answer any
of the call.
(a) Identify the type of business highlighted in the above case.
(b) Explain any two benefits and limitations of e-business.
24 Differentiate between e business & traditional business 6
25 Explain limitation of e business 6

ANSWERS:
Q. ANSWER(MCQ type Questions)
NO
1 A
2 C
3 D
4 C
5 D
6 D
7 B
8 C
9 A
10 C
11 B
12 A
13 D
Answer of Short Answer Type Questions (Case Study and Others)
14 The three differences between e- -business

is low in e-business as assets are normally not purchased but business is done through network of

Physical presence of seller or salesperson is not required in e-business while this is required in
traditional business.
15 The two applications of e-business are:

organizations. All business firms buy (or sell) raw materials, machines and other inputs and services to
carry out their business processes. In doing so, firms have to maintain a good relationship with their
distributors, suppliers and vendors. In this context, B2B e-commerce enables businesspersons to
strengthen their communication and distribution networks, facilitating the smooth transfer of
information, technological know- -to-Customers involves
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 transactions between a business firm and its customers.
B2C e-commerce transactions not only include activities such as sale or purchase of goods and
services but also other marketing activities through the online mode. It basically involves pre-sale
activities (such as promoting products through advertisements) and pre-sale services (such as
providing product information and cash-on-delivery services) besides post-sale services (such as
customer care services). E-commerce enables business firms to conduct these activities faster and at
much lower costs.
16 It refers to the business transactions taking place between two or more business firms. A
business needs to interact with many other firms, resource providers and specialized agencies
before the final product is manufactured or delivered. When the business uses computer
network to interact with such parties, it is called B2B commerce.
17 The 'B2C commerce' refers to the transactions between a business firm and its customers. The salient

consumers by providing them online global access to their p

marketing activities such as promotion and sometimes even delivery of products (e.g., music or e-

firms to manufacture the product according to the requirements of the customers and also to provide

with its customers on round-the-clock basis. Companies can conduct online surveys to ascertain as to

call centres set up by companies to make toll free calls to make queries and lodge complaints round the
clock at no extra cost to them. 5. Discuss the limitations of electronic mode
18 B2C (Business 2 Customer/Consumer) Commerce
It is a system where a customer interacts with business firm for buying goods through internet.
It is used for placing order for goods. It involves various informative services provided to
customers regarding prices, airline schedules etc. B2C is also referred as online shopping.
19 E business is boon due to following reasons
1. Ease of formation and lower investment requirements: Unlike a host of procedural
requirements for setting up an industry, e-business is relatively easy to start.
2. Convenience:
year business. e-business offers the advantage of accessing anything, anywhere, anytime.
3. Speed: As already noted, much of the buying or selling involves exchange of information that
internet allows at the click of a mouse. This benefit becomes all the more attractive in the
case of information-intensive products such as softwares, movies, music, e-books and
journals that can even 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 affords to the buyer a freedom to
choose products from almost any part of the world.
5. Movement towards a paperless society: Use of Internet has considerably reduced
-commerce tools are
affecting the administrative reforms aimed at speeding up the process of granting
permissions, approvals and licences
20 B2C (Business 2 Customer/Consumer) Commerce
It is a system where a customer interacts with business firm for buying goods through internet.
It is used for placing order for goods. It involves various informative services provided to
customers regarding prices, airline schedules etc. B2C is also referred as online shopping
21 C2C (Customer to Customer) Commerce
It refers to the commerce which takes place between two or more customers for the sale and
purchase of goods for which there is no established market mechanism. The activities here
involve auctions between customers that are facilitated by firms such as e-bay classified ads etc.
An excellent example of this is found at eBay where consumers sell their goods and services to
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 other consumers.
Answer of Long Answer Type Questions (Case Study and Others)
22 -business
lacks personal touch compared to traditional business. Thus, it is relatively less suitable mode of

Incongruence between order taking/giving and order fulfilment speed: Information can flow at the
click of a mouse, but the physical delivery of the product takes time. This incongruence may play on
-
business: e-business requires basic knowledge of computers and Internet familiarity. This limits the
use of e- -traceability of parties:
Internet transactions occur between cyber personalities. As such, it becomes difficult to establish the
identity of the parties and their location. Therefor, it is risky to transact through internet. e-business is
riskier also in the sense that there are additional hazards of impersonation and leakage of confidential
information such as credit card detai
technology and new way of doing things causes stress and a sense of insecurity. As a result, people
-
'electronic eye' to keep track of the computer files, e-mail account and the websites visited by their
employees or others who use their network systems which is not considered right on ethical grounds.
Despite the limitations, the scope of e-business remains wide, mainly owing to the continuous
implementation of new technology and new updates that help in overcoming the limitations. Websites

technology is continually evolving to increase the speed and quality of communication through
internet. Efforts are on to overcome the digital divide, for example, by resorting to such strategies as
setting up of community telecentres in villages and rural areas in India,.
23 C2C (Customer to Customer) Commerce
It refers to the commerce which takes place between two or more customers for the sale and
purchase of goods for which there is no established market mechanism. The activities here
involve auctions between customers that are facilitated by firms such as e-bay classified ads etc.
An excellent example of this is found at eBay where consumers sell their goods and services to
other consumers
Ease of formation and lower investment requirements: Unlike a host of procedural
requirements for setting up an industry, e-business is relatively easy to start.

24 Basis E-Business Traditional Business

Formation It is easy to form e-business. It is difficult to form traditional
business as a number of formalities are

required to be fulfilled.
Physical presence Not required Required

Locational
Requirement None Proximity to the source of raw
materials or the market for the
products
Setting-up cost Low, as no requirement of
Physical facilities High setting-up cost due to
requirement of physical facilities
Operating Cost Low, High
Nature of contact There is a direct contact There is a indirect contact

Global access Online trading allows reaching

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 customers all around the globe.
Global reach is limited.
25 Limitation of e-Business
1. Low personal touch: e-business lacks warmth of interpersonal interactions. To this extent,
it is relatively less suitable mode of business in respect of product categories requiring high
personal touch such as garments, toiletries, etc.
2. Incongruence between order taking/giving and order fulfilment speed: Information can
flow at the click of a mouse, but the physical delivery of the product takes time. At times,
due to technical reasons, web sites take unusually long time to open. This may sometimes
frustrate the user.
3. Need for technology capability and competence of parties to e-business: Apart from the
-business requires a fairly high degree
of familiarity of the parties with the world of computers.
4. Increased risk due to anonymity and non-traceability of parties: Internet transactions
occur between cyber personalities. As such, it becomes difficult to establish the identity of
the parties. Moreover, one does not know even the location from where the parties may be

5. People resistance: The process of adjustment to new technology and new way of doing
things causes stress and a sense of insecurity. As a result, people may resist an
-business.
6. Ethical fallouts:
files you use, your e-mail account, the websites you visit etc. this is an example of ethical
fallouts.

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