CHAPTER 5
EMERGING MODES OF BUSINESS
The manner of conducting business is referred to as the ‘mode of business,’ and, the prefix ‘emerging’ underlines the fact, that these changes are happening here and now, and, that these trends are likely to continue.
Main trends that are shaping business are:
(i) digitization.
(ii) outsourcing.
(iii) internationalization and globalization.
e-BUSINESS
When industry and commerce are conducted using computer network can be called as e-business. It is more effective and efficient.
Scope of e-Business
(i) B2B Commerce:
Here, both the parties involved in e-commerce transactions are business firms, and, hence the name B2B, i.e., business-to-business.
[a] Creation of utilities.
[b] Delivering value requires a business to interact with a number of other business firms which may be suppliers or vendors of diverse inputs.
[c] They may be a part of the channel through which a firm distributes its products to the consumers.
(ii) B2C Commerce:
As the name implies, B2C (business-to-customers) transactions have business firms at one end and its customers on the other end.
It includes:
[a] Marketing activities like promotion and delivery of products, etc.
[b] ATM.
(iii) Intra B-commerce:
Parties involved in the electronic transactions are from within a given business firm, hence, the name intra-B commerce.
[a] Intercom facilitated for voice call communication within the office.
[b] Tele/video conferening for online meeting. This make work convenient and speedy.
(iv) C2C Commerce:
Here, the business originates from the consumer and the ultimate destination is also consumers, thus the name C2C commerce. This type of commerce is best suited for dealing in goods for which there is no established market mechanism.
for example: Quiker helps one consumer to sell his/her goods to another consumer.
Q. What are the benefit of e-business?
Ans. The benefit of e-business are as follows:
(i) Ease of formation and lower investment requirements:
e-business is relatively easy to start. The benefits of internet technology are that with littel investment and more contacts one can do better in the business. [ ‘networked individuals and firms are more efficient than networthed individuals.’ ]
(ii) Convenience:
Internet offers the convenience of ‘24 hours 7 days a week 365 days’ a year business that allowed Rita and Rekha to go for shopping well after midnight. The advantage of accessing anything, anywhere, anytime.
(iii) Speed:
It's is very fast that internet allows at the click of a mouse to buying and selling of products.
(iv) Global reach/access:
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.
(v) Movement towards a paperless society:
Use of internet has considerably reduced dependence on paperwork and they save our environment by which we get more oxygen.
Therefore "SAVE PAPER AND USE MOBILE".
LIMITATIONS OF e-BUSINESS
(i) Low personal touch.
(ii) In congruence between order taking/giving and order fulfillment speed.
(iii) Need for technology capability and competence of parties to e-business.
(iv) Increased risk due to anonymity and non-traceability of parties.
(v) People resistance.
(vi) Ethical fallout's.
"Despite limitations, e-commerce is the way"
ONLINE TRANSACTIONS
(i) Registration:
Before online shopping, one has to register with the online vendor by filling-up various details.
(ii) Placing an order:
Just like physical store items are picked or selected to be purchase, also payment option is selected.
(iii) Payment mechanism:
Following mechanism can be used:
[a] Cash on Delivery [CoD]:
As is clear from the name, payment for the goods ordered online may be made in cash at the time of physical delivery of goods.
[b]Cheque.
[c] Net-banking Transfer:
The buyer may transfer the amount for the agreed price of the transaction to the account of the online vendor who may, then, proceed to arrange for the delivery of goods.
[d] Credit or Debit Cards:
Credit card allows its holder to make purchase on credit. Issuing bank make payment to the online seller on behalf of customer and recover the amount from card holder. Debit card allows its holder to make purchases through it to the extent of the amount lying in the corresponding account.
"Debit card and credit card mainly known as plastic money".
[e] Digital Cash:
First you need to pay to a bank (vide cheque, draft, etc.) an amount equivalent to the digital cash. Then the bank dealing in e-cash will send you a special software (you can download on your hard disk) that will allow you to draw digital cash and make online payment.
SECURITY AND SAFETY OF e-TRANSACTIONS: e-BUSINESS RISKS
(i) Transaction risks:
following are the types of transaction risks:
a) Default on order taking/giving.
b) Default on delivery.
c) Default on payment.
Thus, in e-business risk may arise for the seller or the buyer on account of default on order taking/giving, delivery as well as payment.
(ii) Data storage and transmission risks:
Vital information may be stolen or modified to pursue some selfish motives or simply for fun/ adventure.
For example: Virus and Hacking.
(iii) Risks of threat to intellectual property and privacy:
Data furnished in the course of online transactions may be supplied to others who may start dumping a host of advertising and promotional literature into your e-mail box.
OUTSOURCING: CONCEPT
Q. What are BPO?
Ans. A new type of business within service sector has become popular in the world is known as Business Process Outsourcing(BPO) or IT-enabled services. It refers to getting business task accomplished through an outside agency. A company of BPO's was always focusing on Manufacturing and selling. About to percent of BPO industry's revenue come from popular term 'Call Centers'. It offers the convinces of 24 hours X 7 Days a week and 365 days, a year.
Q. What is the need for outsourcing?
Ans. The following are the needs for outsourcing:
(i) Focusing of attention:
business firms are realizing the usefulness of focusing on just a few areas where they have distinct capability or core competence.
(ii) Quest for excellence:
Aware of the benefits of division of labor and specialization.
(iii) Cost reduction:
As the prices turn southwards due to competitive pressures, the only way to survival and profitability is cost reduction.
(iv) Growth through alliance:
To the extent you can avail of the services of others, your investment requirements are reduced, others have invested in those activities for us.
Q. What are the Concerns over Outsourcing?
Ans. Following are the Concerns over Outsourcing:
(i) Confidentiality.
(ii) Sweat-shopping.
(iii) Ethical concerns.
(iv) Resentment in the home countries.
Q. What is KPO?
Ans. KPO - Knowledge process Outsourcing.
It KPO business firm get knowledge related and information related work done from an outside firm. This involves high value work carried by high skilled staffs.
Feature of KPO Business:
1) Common service included in KPO are:
a] Research services: Investment research, business research, market research, etc.
b] Legal process.
c] Patent services.
2) KPO usually focused on knowledge intension business process that requires significant expertise.
3) KPO increase efficiency and result in cost saving.
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EMERGING MODES OF BUSINESS
The manner of conducting business is referred to as the ‘mode of business,’ and, the prefix ‘emerging’ underlines the fact, that these changes are happening here and now, and, that these trends are likely to continue.
Main trends that are shaping business are:
(i) digitization.
(ii) outsourcing.
(iii) internationalization and globalization.
e-BUSINESS
When industry and commerce are conducted using computer network can be called as e-business. It is more effective and efficient.
Scope of e-Business
(i) B2B Commerce:
Here, both the parties involved in e-commerce transactions are business firms, and, hence the name B2B, i.e., business-to-business.
[a] Creation of utilities.
[b] Delivering value requires a business to interact with a number of other business firms which may be suppliers or vendors of diverse inputs.
[c] They may be a part of the channel through which a firm distributes its products to the consumers.
(ii) B2C Commerce:
As the name implies, B2C (business-to-customers) transactions have business firms at one end and its customers on the other end.
It includes:
[a] Marketing activities like promotion and delivery of products, etc.
[b] ATM.
(iii) Intra B-commerce:
Parties involved in the electronic transactions are from within a given business firm, hence, the name intra-B commerce.
[a] Intercom facilitated for voice call communication within the office.
[b] Tele/video conferening for online meeting. This make work convenient and speedy.
(iv) C2C Commerce:
Here, the business originates from the consumer and the ultimate destination is also consumers, thus the name C2C commerce. This type of commerce is best suited for dealing in goods for which there is no established market mechanism.
for example: Quiker helps one consumer to sell his/her goods to another consumer.
Q. What are the benefit of e-business?
Ans. The benefit of e-business are as follows:
(i) Ease of formation and lower investment requirements:
e-business is relatively easy to start. The benefits of internet technology are that with littel investment and more contacts one can do better in the business. [ ‘networked individuals and firms are more efficient than networthed individuals.’ ]
(ii) Convenience:
Internet offers the convenience of ‘24 hours 7 days a week 365 days’ a year business that allowed Rita and Rekha to go for shopping well after midnight. The advantage of accessing anything, anywhere, anytime.
(iii) Speed:
It's is very fast that internet allows at the click of a mouse to buying and selling of products.
(iv) Global reach/access:
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.
(v) Movement towards a paperless society:
Use of internet has considerably reduced dependence on paperwork and they save our environment by which we get more oxygen.
Therefore "SAVE PAPER AND USE MOBILE".
LIMITATIONS OF e-BUSINESS
(i) Low personal touch.
(ii) In congruence between order taking/giving and order fulfillment speed.
(iii) Need for technology capability and competence of parties to e-business.
(iv) Increased risk due to anonymity and non-traceability of parties.
(v) People resistance.
(vi) Ethical fallout's.
"Despite limitations, e-commerce is the way"
ONLINE TRANSACTIONS
(i) Registration:
Before online shopping, one has to register with the online vendor by filling-up various details.
(ii) Placing an order:
Just like physical store items are picked or selected to be purchase, also payment option is selected.
(iii) Payment mechanism:
Following mechanism can be used:
[a] Cash on Delivery [CoD]:
As is clear from the name, payment for the goods ordered online may be made in cash at the time of physical delivery of goods.
[b]Cheque.
[c] Net-banking Transfer:
The buyer may transfer the amount for the agreed price of the transaction to the account of the online vendor who may, then, proceed to arrange for the delivery of goods.
[d] Credit or Debit Cards:
Credit card allows its holder to make purchase on credit. Issuing bank make payment to the online seller on behalf of customer and recover the amount from card holder. Debit card allows its holder to make purchases through it to the extent of the amount lying in the corresponding account.
"Debit card and credit card mainly known as plastic money".
[e] Digital Cash:
First you need to pay to a bank (vide cheque, draft, etc.) an amount equivalent to the digital cash. Then the bank dealing in e-cash will send you a special software (you can download on your hard disk) that will allow you to draw digital cash and make online payment.
SECURITY AND SAFETY OF e-TRANSACTIONS: e-BUSINESS RISKS
(i) Transaction risks:
following are the types of transaction risks:
a) Default on order taking/giving.
b) Default on delivery.
c) Default on payment.
Thus, in e-business risk may arise for the seller or the buyer on account of default on order taking/giving, delivery as well as payment.
(ii) Data storage and transmission risks:
Vital information may be stolen or modified to pursue some selfish motives or simply for fun/ adventure.
For example: Virus and Hacking.
(iii) Risks of threat to intellectual property and privacy:
Data furnished in the course of online transactions may be supplied to others who may start dumping a host of advertising and promotional literature into your e-mail box.
OUTSOURCING: CONCEPT
Q. What are BPO?
Ans. A new type of business within service sector has become popular in the world is known as Business Process Outsourcing(BPO) or IT-enabled services. It refers to getting business task accomplished through an outside agency. A company of BPO's was always focusing on Manufacturing and selling. About to percent of BPO industry's revenue come from popular term 'Call Centers'. It offers the convinces of 24 hours X 7 Days a week and 365 days, a year.
Q. What is the need for outsourcing?
Ans. The following are the needs for outsourcing:
(i) Focusing of attention:
business firms are realizing the usefulness of focusing on just a few areas where they have distinct capability or core competence.
(ii) Quest for excellence:
Aware of the benefits of division of labor and specialization.
(iii) Cost reduction:
As the prices turn southwards due to competitive pressures, the only way to survival and profitability is cost reduction.
(iv) Growth through alliance:
To the extent you can avail of the services of others, your investment requirements are reduced, others have invested in those activities for us.
Q. What are the Concerns over Outsourcing?
Ans. Following are the Concerns over Outsourcing:
(i) Confidentiality.
(ii) Sweat-shopping.
(iii) Ethical concerns.
(iv) Resentment in the home countries.
Q. What is KPO?
Ans. KPO - Knowledge process Outsourcing.
It KPO business firm get knowledge related and information related work done from an outside firm. This involves high value work carried by high skilled staffs.
Feature of KPO Business:
1) Common service included in KPO are:
a] Research services: Investment research, business research, market research, etc.
b] Legal process.
c] Patent services.
2) KPO usually focused on knowledge intension business process that requires significant expertise.
3) KPO increase efficiency and result in cost saving.
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