Chapter 1

Electronic Business
Understanding new internet
economy and business

Objectives of e-business
Primary objective : to use internet and
electronic communication system to
deliver business value by its effective use
in business transactions
Information analysis and access
Penetration
Addressing particular customer segment
Improving user satisfaction
Knowledge augmentation and its
business use to increase stakeholders
wealth.

Contributors for e-Business success

The contributors of successful e-business can be

Website
Knowledge about the use
Skilled manpower
Acceptance from society
Robust infrastructure
Appropriate pricing structure
Smooth internal and external information flow
Connectivity
Mass communication
Network production

Higher Level Contributors for Ebusiness Success

E-Business vs. E-Commerce

e-business
Superset of e-commerce

e-commerce
Subset of e-business

Deals with all aspects of business and not More about monetary
limited to just business transactions
transactions, buying &
selling
Internal processes such as production,
inventory management, product
development, risk management,
finance, etc., are also part of e-business

Focuses on the outward

facing processes and not
related to internal
processes

Other aspects of business like contacting Does not include other

the customer on-line, educating him,
business aspects like in eproviding services, and product related
business
information, that all constitute e-business

Features of E-Business
Technology
E-business features drive the new economy
Some of the major features of e-commerce
are Global reach
Universal standards
Richness
Interactivity
Information density
Personalization

Advantages of E-business
Provides flexibility
No need for physical presence
Cost reduction
Transparency
Personalization
End-to-end information flow
Integrated solution
Saves time
Improved communication with customers,
suppliers
10.Online publishing
1.
2.
3.
4.
5.
6.
7.
8.
9.

Benefits for the retailer

E-business provides benefits for business
houses, customers as well as for retailers
These benefits come from information
efficiencies and penetration, in the form
of market exposure and cost reduction
Benefits for retailers include Increased market exposure
Increased sales
Reduced costs

Establishing E-business
Establishing e-business can be
transformation from traditional business or a
completely new business
Apart from the traditional parameters, other
strategic aspects that need to be considered
while establishing e-business are
E-business frameworks and standards
E-content inter-operability
Inclusive solutions
Trusted frameworks

E-Business Models

E-business model
A framework with all business components to create
value and meet business objectives
A set of business processes through planned activities to
achieve business objectives
Aim to leverage unique properties and the strength of e
component of technology to optimize business objectives
Create new ways of creating, capturing, and delivering
value to customers
Various e-businesses models are distinguished by the
nature of market relationship & the nature of transactions

Ingredients of Business
Models
Various ingredients of business models are

The offerings and value proposition

Revenue model / cash flow
Market forces and available opportunities
Competition
Positioning of product
Market strategy
Technology and information technology strategy
Organizational structure and development
Management team
Knowledge management

Transaction based e-business

Models
e-business models are classified based on
parties taking part in transaction
Properties of business transactions like purpose
of transactions and parties involved, are used
while deciding the type of e-business model
1.
2.
3.
4.
5.
6.

Business to business, B2B model

Businesses to consumer, B2C
Business to government, B2G
Consumer to consumer, C2C
Consumer to business, C2B and
Business to employee, B2E

B2B e-business Models

Most common type of business transactions,
75 to 80% of transactions are of this type
Transactions among providers, distributors,
players, manufacturers and other ancillary
organizations

B2C e-business Model

Second most popular e-business model after B2B
Uses a concept of on-line distribution / selling of
services, products or information from
organizations to actual consumers
Advantages of B2C model
Reduces the transaction costs
Increases the information space available to
consumers
Allows smaller players to enter in the global market
Saves cost needed for setting up shops and physical
distribution channels

B2G e-business model

Transactions between private contractors and
government agencies are part of this model
Refers to commercial enterprises selling product,
services and information to government agencies
Connects government and private sector
Include use of internet for public procurement and
for different government related procedures
Increases transparency in different operations
E.g. energy providing companies and government
energy distribution companies, infrastructure
building companies, government infrastructure
authorities etc.

C2C e-business model

About individuals doing business in online environment
Allows individual auctions, individuals trying to sell old/
new articles, cars, etc. through electronic means/ website
Slowly becoming popular
Major hurdle in accepting C2C model is the trust factor
The peers interact with each other by various means like Direct transaction between individuals
Individuals interacting through some well-known portal or the
auction site
The individuals advertise their product through some site using
classifieds or advertisement

M-commerce and e-business

Advent of wireless technologies and cell phones
made it possible to carry business transactions
using mobile phones
Commerce / transactions that take place using
wireless technology (cellular phones, wireless
devices, etc.) is referred to as m-commerce
Many of the B2B and B2C transactions are
possible over m-commerce to build m-business
models
Poses different sort of technology and usability
challenges

Strength / Opportunity analysis of Ebusiness

As a part of SWOT analysis, strengths of ebusiness include 1. Organization / company can reach to very
specific target group
2. Can have very specific instructions and
services for the said target group
3. Low investments within the traditional sector
4. Reputation of traditional brands can still be
used and even glorified with innovative
marketing means through electronic channels
Cont..

Strengths

Cont..

5. E-business is easily expandable

compared to traditional businesses
6. Allows prices to respond according to
demand (direct marketing
7. Help in increasing the yield maximize
revenue
8. Lowers the cost of stocks and
personnel
9. Minimizes dependence on physical
resources
10.Available 24 hours a day

Opportunities
Creates opportunities for businesses like
1.use of gimmicks for promotional activities on line
2.Allows dealing with wholesale trade companies as
theres a connectivity between various companies
3.Promote brands and take those brands to global level
4.Selling well-known brands very easily, as the
customers cannot see the actual product, they prefer
branded
5.Operate in niche markets at global level
6.Allows organization to improve decision efficiencies
because of integration and availability of information

Opportunities

Cont..

7. Ability to connect and integrate with other

organizations allowing to sell complete
range of products by using partnerships
8. Allows to sell product and the related
services together
9. Help in building efficient market, as the
increase in transparency due to electronic
communication means
10.Delivers different kinds of services for
different prices