Ch. 5 Emerging Modes of Business

Differences Between E-Business and Traditional Business

• Formation: E-business can be established with lower initial investment and fewer regulatory hurdles compared to traditional businesses, which often require physical locations and extensive permits.
• Setting of Cost: E-business generally has lower operating costs due to reduced overhead expenses, while traditional businesses incur higher costs related to physical storefronts and utilities.
• Risk Involved: E-business faces unique risks such as cybersecurity threats and data breaches, whereas traditional businesses encounter risks like theft, property damage, and market competition.

Applications of E-Business

• Online Retail: Enables consumers to shop for products and services from anywhere, leading to a wider market reach.
• Digital Marketing: Helps businesses promote their products through various online channels, fostering a more targeted audience engagement.

Data Storage and Transmission Risk in E-Business

• E-business relies heavily on cloud storage and online data transfer, making it susceptible to data breaches, cyberattacks, and loss of sensitive information.
• Regular security upgrades and the implementation of encryption protocols are essential to mitigate these risks.

Factors for the Growing Importance of E-Business

• Rapid technological advancements and increased internet penetration have made it easier for businesses to go online.
• Changing consumer behaviors favor online shopping, leading to a significant shift in marketing and sales strategies.

Steps Involved in Online Trading (Order Placement)

• Customer browses the online catalog and selects desired products.
• Customer adds items to the shopping cart and proceeds to checkout.
• Payment information is entered, and the order is confirmed.
• Order details are sent to the seller for processing and shipment.

Types of E-Business Models

• B2C (Business-to-Consumer): Involves businesses selling products directly to consumers via online platforms.
• C2C (Consumer-to-Consumer): Facilitates transactions between consumers, typically through online marketplaces.
• B2B (Business-to-Business): Involves transactions between businesses, often for supplies or services.

Limitations of Electronic Mode of Doing Business

• Security Concerns: High risk of data breaches and fraud can deter consumers from engaging in online transactions.
• Technical Issues: System downtimes or software failures can disrupt operations and affect customer trust.
• Lack of Personal Connection: Absence of face-to-face interaction can hinder customer relations and brand loyalty.

Benefits of E-Business

• Global Reach: Businesses can access a wider audience across various geographic locations.
• 24/7 Availability: E-business operates around the clock, enhancing customer convenience.
• Reduced Costs: Lower operational expenses compared to traditional models.
• Scalability: Easier to scale operations based on demand fluctuations.
• Data Analysis: Businesses can gather and analyze customer data for improved decision-making.

Types of Transactions in E-Business

• Online Purchases: Customers buy goods or services directly through websites.
• Digital Services: Offering services such as consulting or tutorials via digital platforms.
• Subscription Models: Consumers pay for ongoing access to products or services online.

Difference Between E-Commerce and E-Business

• E-Commerce focuses specifically on online transactions involving buying and selling goods and services.
• E-Business encompasses all aspects of running a business online, including supply chain management, customer service, and marketing strategies.