1. Define E-business and differentiate between E-business and
E-communication.
Commerce, the exchange of valuable goods or services, has been
conducted for thousandsof years. Traditionally, commerce involved
bringing traders, buyers, and sellers togetherin a physical
marketplace to exchange information, products, services, and
payments.Today, many business transactions occur across a
telecommunications network wherebuyers, sellers, and others
involved in the business transaction (such as the employees
whoprocess transactions) rarely see or know each other and may be
anywhere in the world.This process of buying and selling of
products and services across a telecommunicationsnetwork is often
called electronic commerce or e-commerce.
Many people use the term e-commerce in a broader sense: to
encompass not onlythe buying and selling of goods, but also the
delivery of information, the providing of customerservice before
and after a sale, the collaboration with business partners, and
theeffort to enhance productivity within organizations. Others
refer to this broader spectrumof business activities that can be
conducted over the Internet as e-business. Most peopletoday use the
terms e-commerce (in its broadest sense) and e-business
interchangeably.In this book, we use the term e-business to
indicate the widest spectrum of businessactivities that use
Internet and Web technologies.
E-Business Advantages and Disadvantages :
Like buyers, sellers also benefit tremendously from the global
e-business-based economy.Sellers can increase sales and operations
from local to worldwide markets, improve internalefficiency and
productivity, enhance customer service, and increase
communicationwith both suppliers and customers. Table 1-2
illustrates some e-business advantages for sellers and buyers.
2. Explain Porters generic value chain.
E-Business Value ChainsThe widespread access to the Internet and
the Web by suppliers and customers hasencouraged many companies to
reevaluate their value chains. In his book, CompetitiveAdvantage:
Creating and Sustaining Superior Performance, Michael E. Porter of
theHarvard Business School first introduced the concept of a value
chain. A companys valuechain consists of all the primary and
support activities, called value activities, performedto create and
distribute its goods and services.11 Primary activities include all
theactivities necessary to produce, sell, and support the companys
products. Support activitiesinclude purchasing, human resources,
technology, and other functions necessary tosupport the primary
activities. At each link in an e-businesss value chain, Internet
and Webtechnologies improve communications and transaction speed.
Figure 1-11 illustrates ageneric value chain.
Value chains are also used to represent the value activities of
any transaction startingwith a product or service and ending with a
customer. Internet and Web access is redefiningthe relationships
among manufacturers, suppliers, distributors, and customers.
Increasingly,a companys value chains can be seen as value networks
of the multiple relationshipsthe company depends on to produce and
sell its products and services (Figure 1-12).
3. Define EDI and advantages of EDI .
The initial development of e-business transactions began more
than thirty years agowhen banks began transferring money to each
other by using electronic funds transfer(EFT), and when large
companies began sharing transaction information with their
suppliersand customers via electronic data interchange (EDI). Using
EDI, companies electronicallyexchange information that used to be
traditionally submitted on paper forms,such as invoices, purchase
orders, quotes, and bills of lading. This exchange occurs bothwith
suppliers and customers (often called trading partners). These
transmissions generallyoccur over private telecommunications
networks called value-added networks, orVANs. Because of the
expense of setting up and maintaining these private networks and
thecosts associated with creating a standard interface between
companies, implementing EDIhas usually been beyond the financial
reach of small and medium-sized companies.Today, companies of all
sizes use a less expensive network alternative to VANs for
theexchange of information, products, services, and paymentsthe
Internet. Global access tothe Internet and the Web has changed the
way people and businesses around the worldcommunicate.
Advantages :-
1. Shortened the ordering time2. Cost cutting3. Elimination of
error4. Fast response5. Accurate invoincing and payments 6. Reduced
stock holding7. Speedup cash flow8. Customer lock in
4. Write a note on
i. E business Models :
A companys business model is the way in which the company
conducts business inorder to generate revenue. Widespread access to
the Internet and the Web is drivingcompanies to adapt old business
models and create new ones. Although there are many differentways
to categorize e-business models, they can be broadly categorized as
businessto-consumer (B2C), business-to-business (B2B),
business-to-government (B2G),consumer-to-consumer (C2C), and
consumer-to-business (C2B). Table 1-4 describes thegeneral features
of these e-business models and provides examples of e-businesses
thatfollow them.
Consumers are increasingly going online to shop for and purchase
products, arrangefinancing, prepare shipment and delivery of
digital products such as software, and get serviceafter the sale.
Business-to-consumer, or B2C, e-business includes retail sales,
oftencalled e-retail, of goods and services, as well as online
purchases of items such as airlinetickets, entertainment venue
tickets, hotel rooms, and shares of stock.
Businesses that conduct their transactions from a physical
location are sometimesknown as brick-and-mortar enterprises. Many
traditional brick-and-mortar retailersfromnationwide companies such
as Sears, Best Buy, Barnes & Noble, and the Gap, to regionalor
local stores such as The Sunglass Cityare now e-retailers who
maintain online storesat which their customers can also view
merchandise and make purchases. Companies suchas these, which
combine brick-and-mortar business facilities with e-business
operations,are sometimes called brick-and-click companies.
Some B2C e-businesses provide high-value content for a
subscription fee. Examples ofe-businesses following a subscription
model such as this include the Wall Street JournalOnline (for
financial news and articles), Consumer Reports (for product reviews
andevaluations), and eDiets.com (for nutritional counseling).
Business-to-Business (B2B)
Like B2C e-business models, business-to-business, or B2B,
e-business models take a varietyof forms. There are basic B2B
Internet storefronts, such as Staples and Office Depot,which
provide business customers with purchasing, order fulfillment, and
other customizedservices. Some B2B e-businesses offer Internet and
Web products such as Web sitehosting and Web page design,
networking hardware and software, or e-business
consultingservices.
Another B2B model is an online trading community that acts as a
central source ofinformation for a vertical market. A vertical
market is a specific industry in which similarproducts or services
are developed and sold using similar methods. Examples of
broadvertical markets include insurance, real estate, banking,
heavy manufacturing, andtransportation. The information available
at online trading community Web sitesincludes buyers guides,
supplier and product directories, industry news and articles,
schedulesfor industry trade shows and events, and classified ads.
MediSpeciality.com (healthcareindustry), Hotel Resource
(hospitality industry), and Elance (IT industry) are examplesof B2B
e-businesses that support vertical markets. Figure 1-17 shows a B2B
Web site.
In addition to supporting vertical markets, Elance also serves
as a B2B exchange.B2B exchanges are e-businesses that bring
multiple buyers and sellers together in a virtualcentralized
marketplace, sometimes called a marketspace. B2B exchanges may
aggregate information from multiple sellers, allow participants to
post buy or sell opportunities on an electronic bulletin board,
provide auction services that enable multiple buyers or sellers to
enter competitive bids on contracts, or provide access to expert
information for a specific field.
Business-to-Government (B2G)
A variation on the B2B model is the business-to-government, or
B2G, model. Thesee-businesses create a marketspace for sellers
wanting do business with governmentagencies. B2G e-businesses
provide information on government contracting and bringsuppliers
and government agencies together. E-businesses, such as Bidmain
andB2GMarkets, follow the B2G e-business model. Figure 1-22
illustrates a B2G Web site.Now that youve become familiar with how
B2C, B2B, and B2G e-businesses interactwith individual consumers
and other businesses, you can examine another type of
businessactivity fostered by the growth of the Internet and Web
access, one in which consumersinteract directly with other
consumers to buy, sell, and trade items, personal services,and
information.
Consumer-to-Consumer (C2C)In the consumer-to-consumer, or C2C,
e-business model, consumers sell products, personalservices, and
expertise directly to other consumers through a number of methods:
by placingonline classified ads, by participating in forward and
reverse auctions, or by makingtrades. Examples of e-businesses that
involve consumers selling directly to consumers areAmerican Boat
Listing, an online boat listing servive; eBay, which offers both
fixed priceitems and auctions; TraderOnline.com, which hosts
classified ads; and AllExperts.com, anexpert information
exchange.
Consumer-to-Business (C2B)Like the B2B reverse auction model,
the consumer-to-business, or C2B, e-business modeluses reverse
auctions to enable consumers to name their own price for a specific
good orservice; once the bid is offered and accepted, it is often
binding. An e-business following theC2B model collects an
individual consumers bid for a product or service, such as an
airlineticket, rental car, or hotel room, and then offers the bid
to multiple competing sellerswho either accept or decline the
consumers bid. The most well-known e-business followingthe C2B
e-business model is priceline.com (Figure 1-27).
In addition to broad categories such as B2B and B2C, there are
various subcategories ofe-business models. Many of these
subcategories were created by organizations such as
governmentagencies, non-profit institutions, and social or
religious groups that decided to reducetheir operating expenses and
improve customer service by adapting e-business models to
theirspecific needs. National Public Radio is an example of a
non-profit institution following ane-business model.
ii. Internet and Internet components :
To understand the Internet, you must first become familiar with
computer networks. Acomputer network is a group of two or more
computers linked by cables, telephone lines,or other wired or
wireless media (Figure 1-1). A network of linked computers
usuallyincludes special computers called servers that give users
access to shared resources suchas electronic files, programs,
printers, and connections to other networks, such as theInternet.
The Internet is a worldwide public network that connects private
networks (Figure1-2).
To connect to the Internet, individuals and businesses generally
use some type of physicalcommunications media, such as a network
cable, phone line, or, as is increasingly truethese days, wireless
media. In addition to some form of media, individuals and
small-tomediumsized businesses seeking access to the Internet
usually need the services of anInternet service provider (ISP)an
e-business that provides access to the Internet for afee. Examples
of ISPs include America Online, Netscape Network, EarthLink,
NetZero, andRoad Runner. Large businesses, colleges, universities,
and government institutions mayhave a computer network that is
connected directly to the Internet. Figure 1-3 illustratesan
example of an ISP.
5. Explain VADS (Value Added Data Services)Avalue-added
service(VAS) is a popular as atelecommunicationsindustry term for
non-core services, or in short, all services beyond standard voice
calls and fax transmissions. However, it can be used in any service
industry, for services available at little or no cost, to promote
their primary business. In the telecommunication industry, on a
conceptual level, value-added servicesadd valueto thestandard
service offering,spurringthe subscriber to use their phone more and
allowing the operator to drive up theirARPU. For mobile phones,
while technologies likeSMS,MMSanddata accesswere historically
usually considered value-added services, but in recent years SMS,
MMS and data access have more and more become core services, and
VAS therefore has beginning to exclude those services.A distinction
may also be made between standard (peer-to-peer) content and
premium-charged content. These are called mobile value-added
services (MVAS) which are often simply referred as VAS.Value-added
services are supplied either in-house by themobile network
operatorthemselves or by a third-partyvalue-added service
provider(VASP), also known as acontent provider (CP)such asAll
NewsorReuters.VASPs typically connect to the operator using
protocols likeShort message peer-to-peer protocol(SMPP), connecting
either directly to theshort message service centre(SMSC) or,
increasingly, to a messaging gateway that gives the operator better
control of the content