Maharashtra Board Class 12 Organization of Commerce and Management Chapter 5 Emerging Modes of Business PDF Download

Emerging Modes of Business

5.1 E-Business

"The new mantra of the day is growth, globalization cycle times, speed and competitiveness,"

E-business is an abbreviation for electronic business. In 1997, IBM started using the term e-business for the first time. Till that time the word e-commerce was used. E-business means using the internet to connect people and process. It opens new door to customers around the world. E-business establishes more closer and responsive relationship with partners, employees and suppliers. It connects, adapts and integrates IT system, so companies are able to manage their business efficiently. Through the internet it is possible to invent new and innovative ways to add value to existing products and services without necessarily, spending a lot of money.

Electronic business refers to the use of the Web, Internet, intranets, extranets or some combination there of to conduct business. E-Business is not a technical change. It is a fundamental change in the way of business be done, aided, supported and enabled by technology.

The internet and the web support together provide opportunities in selling, customer relationship, product/service design, user support, geographic expansion, logistic and supply chain integration. This is nothing but business on internet. Technology is moving fast to make things possible tomorrow, which seem impossible today.

5.1.1 Meaning

The term 'E-business' i.e electronic business is derived form the terms e-mail and e-commerce.

E-business or electronic business, is the administration of conducting business via the internet. This would include the buying and selling of goods or services, along with providing technical or customer support through the internet.

The concept of E-business emerged when IBM coined the term in late 90's. The purpose was to provide buyers a platform on the internet to buy and sell goods.

Visit websites which are selling goods through online mode i.e. in category of E-business

Some people use the term 'e-business' and 'e-commerce' interchangeably but they are not synonymous. E-commerce refers to buying and selling online, while e-business encompasses all business conducted online. E-commerce is a branch of e-business.

Teacher's Note

E-business is like shopping on Flipkart or Amazon. Just like your mother buys vegetables from Dmart supermarket, you can now buy anything from your home using your mobile phone or computer. It is very easy and saves time.

Exam Trick

Remember: E-business = Electronic business = Internet based. E-commerce is only buying and selling, but e-business is everything done on the internet including customer support, payment, and delivery also.

Points to Remember

E-business means doing business on the internet.
IBM started e-business term in 1997.
E-business connects buyers and sellers from all over the world.
It is cheaper and faster than traditional business.
E-commerce is a part of e-business, not the whole thing.

5.1.2 Scope Of E-Business

The scope of e-business is not restricted to only online shopping, it also includes on line stock, transactions and the use of software. In India, till now business is managed through traditional methods. Now many businesses are becoming aware of the advantage of e-business and are incorporating this into their strategies. It also helps in better communication between business house and makes purchasing easier for large organizations.

We have mentioned above that the scope of E-business is quite vast. Almost all types of business functions such as production, finance, marketing and personnel administration as well as managerial activities like planning, organizing and controlling can be carried out over computer networks. The other way of looking at the scope of e-business is to examine it in terms of people or parties involved in electronic transactions. Various business and payment apps popularly used in E-business transactions are phone pay, google pay, swiggy, ola etc.

Viewed from this perspective, a firm, electronic transitions and networks can be visualized as extending into six directions as follows:

1) Business to Business (B2B)

2) Business to Consumer (B2C)

3) Consumer to Business (C2B)

4) Consumer to Consumer (C2C)

5) Business to Administration (B2A)

6) Consumer to Administration (C2A)

1) Business to Business (B2B)

In this form the buyer and seller are both business entities and do not involve individual consumers. Here, both the parties involved in e-commerce transactions are business firms and hence the name B2B i.e. business to business.

Transactions between business firms come under this category. Business firms interact with each other for a variety of services. These include supplying ancillary parts/components to manufacturers providing value added services like catering and also providing man power.

Teacher's Note

B2B is when one shop owner buys things from another shop owner on the internet. For example, a small shop owner buys shirts from a big factory online to sell them in his shop.

Exam Trick

Remember: B2B = Both are businesses. Like Flipkart buying books from publishers. Both are business to business transaction.

Points to Remember

B2B means both buyer and seller are business companies.
No regular customers are involved in B2B.
They buy and sell in large quantities.
This type of business is faster and easier.
One business buys things from other businesses to use or resell.

2) Business to Consumer (B2C)

Customer identifies a need, and searches for the product or services to satisfy the need. Customers select a vendor and negotiates a price. Customers receives the product or services, makes payment, gets service and warranty claims. As the name implies, B2C transactions have business firms at one end and its customers on the other end.

The transactions under B2C are between business firms and consumer. Firms use their sites for a range of marketing activities. These include promotion, product information, reviews about the product/ service and delivery of the product at the doorstep. The cost of products and services is kept low through this method and the speed of transaction is also faster. Examples of web sites: www.flipkart.com etc.

Teacher's Note

B2C is when you buy something from Amazon or Flipkart. The business sells products directly to you, the customer. It is like buying from a shop but doing it online from your home.

Exam Trick

Remember: B2C = Business to Consumer = You buying from a shop online. Like buying a mobile phone from Flipkart. Flipkart is the business, you are the consumer.

Points to Remember

B2C is when a business sells directly to customers.
Customers buy one or few items for personal use.
Examples are Flipkart, Amazon, and Snapdeal.
The customer pays through credit card, debit card, or cash on delivery.
The business delivers the product to the customer's home.

3) Consumer to Business (C2B)

In this electronic transaction the consumer requests a specific service from the business. Consumer to Business is a growing arena where the consumer requests a specific service from the business. It enables buyers to quote their own price for specific goods or services. A consumer posts his request with a set budget online and, companies review the customers requirements and bids out the project. For example, pest control services, taxi services, door step food delivery etc.

Teacher's Note

C2B is when you (the consumer) offer to pay a business for a service. Like posting on the internet "I will pay Rs 500 for someone to paint my room." A painter then comes and does the work.

Exam Trick

Remember: C2B = Consumer to Business = You telling the business what price you will pay. Like Uber where you request a taxi and drivers bid to pick you up.

Points to Remember

C2B is opposite of B2C.
The consumer decides the price and the service needed.
Businesses bid to do the work at that price.
Examples are Uber, Ola, and online freelance work sites.
This is growing very fast in India.

4) Consumer to consumer (C2C)

It facilitates the online transaction of goods or services between two people. Consumer to consumer (C2C) involves the electronically facilitated transactions between consumers through some third party. A common consumer posts an item for sale and other consumers bid to purchase it. The sites are only intermediaries, just to match the consumers. The internet allows a lot of space for consumer groups to be formed. These forums are very interactive. Redressal of complaints is also possible through such groups. For example, eBay.

Teacher's Note

C2C is when you sell something to another person through the internet. Like selling your old mobile phone on OLX to another student. Both of you are consumers, not businesses.

Exam Trick

Remember: C2C = Consumer to Consumer = You selling to another person. Like selling your old books on OLX. No business is involved. Just two people buying and selling.

Points to Remember

C2C is when two consumers buy and sell from each other.
No business company is involved.
Examples are OLX, eBay, and Facebook Marketplace.
The website is just a middleman to connect both people.
You can buy and sell anything from anyone through C2C.

5) Business to Administration (B2A)

This part of e-commerce encompasses all transactions conducted online between business and public administration. For example, registration of companies, payment of taxes, getting permits etc.

Teacher's Note

B2A is when a business deals with the government online. Like a shop owner paying taxes to the government through the internet instead of going to the office.

Exam Trick

Remember: B2A = Business to Administration = Business dealing with government. Like paying business taxes online to the government.

Points to Remember

B2A is business doing things with government online.
Examples are paying taxes and getting business licenses.
The government office is the administration.
It saves time and paper work.
Everything is done on the internet now.

6) Consumer to Administration (C2A)

The consumer to Administration model encompasses all electronic transactions conducted between individuals and public administration. For example, getting passport, aadhaar card, licenses etc.

Teacher's Note

C2A is when you (a person) deal with the government online. Like applying for a passport or Aadhaar card on the internet instead of going to the office.

Exam Trick

Remember: C2A = Consumer to Administration = You dealing with government. Like applying for Aadhaar card online on the government website.

Points to Remember

C2A is individuals dealing with government online.
Examples are getting Aadhaar card, passport, and driving license.
Everything is done on the internet now.
It is faster and easier than going to the office.
You can do it from home anytime.

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