By

Bulusu Ankit Sharma

VI sem. Mechanical Engg.
Bhilai Institute of Technology
Durg (C.G.)

CONTENTS:

1
 1. Introduction (Page No.03)
2. What is E-business (Page No.04)
3. Evolution of E-business (Page No.05)
4. Categories of E-business (Page No.06)
5. Models of E-business (Page No.08)
6. Advantages and disadvantages of E-business (Page No.10)
7. Summary (Page No.12)
8. Reference (Page No.12)

INTRODUCTION:

2
Now a days internet has risen up from being a collection of marketing brochures to one of
the most widely used means for collection, presentation of business data for increasing
number of organizations. This method of doing business via internet is termed as
E-BUSINESS. The process now a days is spreading as wildfire because of its global
reach, easy adaptability, low cost. E-business includes interaction between suppliers,
customers, business partners, but uses it with a broad perspective emphasizing on internal
business processes. While the term e-business is very recent to many of us, but many
advices, strategies have been given for the use of internet in this field in a much better
way. In addition to the use of computers in business, one must now recognize a major
trend in the convergence of sciences involving electronics, computers, information
management, etc.
The term E-business (electronic business) is similar to terms like e-mail, e-commerce,
helping not only in buying, selling but also in servicing customers and collaborating with
business partners. Today, major corporations are rethinking their businesses in terms of
the internet and its new culture and capabilities. Companies are using web to buy parts
and supplies from other companies, to collaborate on sales promotions, and to do joint
research. Exploiting the convenience, availability, and world-wide reach of the Internet,
many companies, have discovered how to use the Internet in a better way. After the dot-
com crash that started in 2001 and seems to continue until the present day, it seems that
the “cyber gold rush” is over. Is e-business a bust? Should we all drop this course and
take up a more reliable area of business, like selling cars or sewing machines?

WHAT IS E-BUSINESS:

3
E-business is an all-encompassing concept that refers to the numerous ways in which
companies are taking advantage of the universal connectivity offered by the Internet and
other computer networks. Traditional Information Systems courses also discuss how
businesses use computers, but focus in addition on technical issues of hardware, software,
databases, networks, and management of all of these components. This course focuses on
the ideas and processes involved in starting an e-business or in adding e-business
functions to an existing business. E-business enables a customer to conduct business
anytime, anywhere and from any place via a distribution channel. It helps to get a
continuous dialogue between you and your customer, just as if you both were talking face
to face. E- business is more than having a web site for your business. Accessing internet
to provide information about the company, products, supplies, using appropriate project
management software etc. can make the administrative, operational activities more
efficient. The term e-business is broader, referring to the transformation of fundamental
business processes through the use of Internet technologies. It refers to the way internal
business processes and communication with suppliers etc. is carried out via computer
networks that use Web-compatible software. In a more simpler manner e-business is the
electronic exchange of information between two or more parties. Specific activities can
include: customer relationship, order processing, distribution and procurement. E-
business includes e-commerce, but adopts a broader perspective with emphasis on key
internal business processes. These processes can include marketing, finance, human
resource management, operations, production and risk management.
One of the widest known names of the software field IBM defines e-business as
'any activity that connects critical business systems directly to their critical
constituencies (customers, employees, vendors and suppliers) via intranets, extranets and
over the World Wide Web.'

EVOLUTION OF E-BUSINESS:

4
As we all know that in this ever changing world only thing that remains constant is
change. Companies need to adjust their business models constantly to changes in their
environment. However, they also need to do so in a controlled manner. An approach to
evolving business models needs to strike a balance between capitalizing on new
opportunities, and entering uncharted territories by mitigating the risks involved with
such a change. The approach must be lightweight in order to quickly evaluate alternative
models, but also be reliable models. The requirement of new technologies, much wider,
faster mode of doing business led to the evolution of e-business. Traditional transaction
processing systems have evolved from simple interactive or message processing
programs into sophisticated distributed processing systems that are repeatable, robust,
and responsive. The system designs make several assumptions about the run-time
environment – synchronous connection between endpoints of conversations or pseudo-
conversations, user authentication, management of the presentation space, and, for the
databases, the balance between update and read-only messages. None or very few of
these assumptions hold in the current e-business environment. As a result, the transaction
flows are run-time environments for browser-based transactions.

CATAGORIES OF E-BUSINESS:

5
E-business can be divided into the following categories.
• Business to Consumer(B2C)
• Business to Government(B2G)
• Consumer to Government(C2G)
• Business to Business(B2B)

Business to consumer (B2C):

During the first wave of e-business much of the media attention was focused on the B2C
market. At the time it appeared logical, as consumers were using applications such as
email and bulletin boards, and performing research. Despite the success of B2C firms, the
actual and projected growth of B2B dwarfs B2C markets.

Business to Government (B2G):

In most of the countries government has embedded a program aiming at the prosperous
up-liftment of the country to become a world leader in the knowledge economy
revolution. The e-commerce group is tasked with enabling e-commerce for the as a whole
by developing an e-commerce framework that is conducive to developing a confident and
skilled population. It is expected that this will be achieved by helping businesses get the
skills and the technologies they need and by closely monitoring ecommerce activity.

Consumer to Government (C2G):

The government has developed a policy for the taxation of e-commerce and is hoping to
resolve and clarify particular technical issues. The Government recognises that e-
commerce presents both challenges and huge opportunities for taxation and tax
administration for the public.

Business to Business (B2B):

6
The broad definition of B2B e-business helps explain why the marketplace is expected to
continue to grow so quickly. According to Cunningham the B2B definition can include:
'Transactions conducted over public or private networks, including public and private
transactions that use the Internet as a delivery vehicle. The transactions include financial
transfers, online exchanges, auctions, delivery of products and services, supply-chain
activities and integrated business networks.’

Two of the most commonly used categories are: Business to business and Business to
consumer. Business to business e-business is nothing but experiencing an explosive
growth rate on the internet. The original first stage of commerce on the Internet was that
of E-Commerce, which is business to consumer activities. Business to business goes well
beyond that popular form of consumer purchasing. It is intended to bring "Just in Time"
concept to a greater height which allows business to coordinate with its business
associate for real time transaction and improving efficiency and productivity for both
organizations. Because Time is money; people are money, good management of both
means more money for the business and less expenditure on others. B2C (Business-to-
Consumer) is basically a concept of online marketing and distributing of products and
services over the Internet. It is a natural progression for many retailers or marketer who
sells directly to the consumer. The general idea is, if you could reach more customers,
service them better, make more sales while spending less to do it, that would the formula
of success for implementing a B2C e-commerce infrastructure. The B2C category is most
widely used by manufactures, publishers, distributors, direct sales firms, specialty
retailers, insurance providers etc.

7
MODELS OF E-BUSINESS:

After the first wave of e-business, 'bricks and clicks' businesses – those with both a
traditional and e-commerce approach – find that, while they already have sound financial
resources, they, too, must find the right e-business model(s) for generating profitable
revenue streams from the Internet.
In terms of operationalising the e-business strategy a variety of e-business models are
now in use. New business models that modify the nature of company interactions with
outside entities have appeared in electronic markets. From one industry to another, these
new business models have dramatically altered management techniques. It is important,
therefore, to acknowledge the importance of e-business models. They are the conduit to
increasing a company's competitiveness in the e-marketplace by improving core business
processes. The following are a few e-business models currently in use:

Portals model

During the initial days of the Internet, e-commerce was the bull's eye and portals were the
arrows. websites such as Yahoo, were the first stop for users going online. Analysts
projected revenues based on banner advertising being strategically placed on websites. It
was anticipated that users would click through to electronic stores. Venture capitalists
were happy to provide cash for portals with entrepreneurs impressing ventures capitalists
with their 'elevator' pitches.

E-tailer model

The e-tailer model is a popular model utilised by retail organizations for transactions.
Organisations can act as intermediaries between producers and potential buyers to create
added value. They manage the platforms where their virtual brochures are presented. E-
business enables good effective management practices since managers can use
technology to make faster business decisions, such as the selection and realisation of
products and rates. In this type of model, prices are determined by the e-business but
variations are allowed according to predefined criteria.

8
Auction model

The auction model plays an intermediary role between buyers and sellers. This type of
‘one seller to one broker to many buyers’ model is more concerned with filling a gap in
the marketplace than with content. Communication is faster and made easier as it takes
place in real time between buyers and sellers. This model eliminates both distance and
time, and allows a continual updating of catalogues without expensive printing costs.
Access is provided to a wide variety of goods and services grouped together by areas of
commercial activity or personal interest.

Value chain model

This business model groups together partner companies that consult each other in the
making of a product with very high added value, through an organised process. The main
objective is to maximise the creation of added value through an efficient operational
process. These partnerships meet the specific needs of third parties by offering
customized products. These types of firm do not use online intermediaries such as content
aggregators in their e-commerce processes. Instead they attempt to build and maintain
their own ecommerce infrastructure.

Barter model

The barter model allows goods and services to be exchanged without money. Here the
Internet enables a business owner to barter tangible or intangible products with another
company. For example, a company can make its warehouse space profitable by offering
another company the possibility of storing its products temporarily. Or a company that
manufactures wooden furniture can barter sawdust and old wood with a company that
produces plywood. The second variation of this model is the most virtual. In this case, the
companies or people with access to this e-business model are members of different
associations or companies. This type of site favours shared expertise and knowledge.

9
Buying groups model

This model is a buying group for several business owners, and thus allows greater
negotiating power. The model is especially useful for the smaller business unable to get
the benefits provided by economies of scale. When joined together into a buying group,
the new entity plays the role of intermediary for research and negotiation with suppliers.
It can also provide the distribution of product catalogues as well as the management of
commercial and financial transactions and the delivery of merchandise.

ADVANTAGES AND LIMITATIONS OF E-BUSINESS:

E-business along with helping a company in increasing its growth, productivity, making
its consumers, also provides aid by
• Analyzing the market potential for the company
• Its prominent competitors,
• Plans for improving its business, products, services.
• It creates awareness in the society for understanding the technology, accessing
• Access to global market and information.
• Better decision making
• Cost effectiveness and increased productivity

Few of the other advantages are:

• Quicker and easier communications.

• Strengthened marketing capabilities and reach.

10
 • Access to broader information through research.
• Reducing the cost of doing business by lowering transaction costs and
increasing efficient methods for payment, such as using online banking and
reducing stationery and postage costs.
• The opportunity to adopt new business models and develop tailored
customer support.

As we all know that every coin has its two faces, every thing which goes up has to come
down, this tit for tat game is played everywhere. In the same way every thing along with
their advantages also have their disadvantages or should one say its limitations. This e-
business is no different than the other things. It also has a few of its limitations like
• Cost inflexibility
• High marketing/ Advertising expenses
• Liquid market place
• High cost of doing business
• Middlemen may be required

11
SUMMARY:
The purpose of this paper is not to divert people from the general methods of business
but to make them aware of the wide spread rays of e-business. The problems pertaining
to the general methods of e-business are more sound as compared to those of e- business.
E-busines offers new opportunities, ways to establish new, competitive standards of
doing business, mainly by expanding the distribution channel. The overall growth of
e-business has been dramatic and will continue to be fuelled by business to business
activities. At last one thing should be kept in mind that the number of the online
consumers and e-business abreast each other.

REFERENCE:
• Internet business models and strategies by Tata McGraw hill.
• How fast is too fast by Vardhan, Razvi, and Tiwari.
• Internet commerce matrix and models by Jagannathan, Srinivasan, and Kalam.
• How companies must change to win battle by M.Modhal
• www.computereconomics.com.

12