Emerging Modes of Business

Basis	Traditional Business	e-Business
Ease of Formation	Difficult (requires more formalities).	Simple and easy.
Physical Presence	Required (stores, offices).	Not required.
Operating Cost	High (due to fixed charges).	Low.

• e-Procurement: Involves internet-based sales transactions between business firms, including ‘reverse auctions’ where a single business buyer facilitates trade with many sellers.
• e-Communication/Promotion: Includes the use of email, online catalogues, banner ads, and opinion polls to promote products and interact with customers.

Data in e-business is exposed to several risks:

• VIRUS (Vital Information Resources Under Siege): Malicious programs that can replicate and destroy data or disrupt systems.
• Hacking: Unauthorized interception of data during transmission to steal vital information or modify it for personal gain.
• Data Interception: Critical information can be intercepted while en-route unless protected by cryptography (encryption).

Emerging Modes: They are called “emerging” because they have revolutionized traditional business practices by adding speed, efficiency, and convenience, and are continuously evolving.

Factors Responsible:

• Cost Reduction: Intense global competition forces firms to reduce costs to survive. Outsourcing and e-business help minimize operational and production costs.
• Quest for Excellence: Firms focus on their “core competence” (what they do best) and outsource the rest to specialists, improving overall quality.
• Speed & Convenience: e-Business allows for 24/7 trading and faster cycle times, meeting the demands of modern customers.
• Innovation: These modes facilitate the continuous development of new products and technologies.

The process of online trading involves three main stages:

1. Registration: The customer registers with the online vendor by filling out a form with details like name, address, and creating a password to open an account.
2. Placing an Order: The customer browses the online store, adds items to a “shopping cart,” and proceeds to checkout to confirm the order.
3. Payment Mechanism: Payment is made through various modes:
   • Cash on Delivery (CoD).
   • Cheque.
   • Net Banking Transfer.
   • Credit or Debit Cards.
   • Digital Cash/Wallets.

Need for Outsourcing:

• Focused Attention: Allows firms to focus on core activities.
• Cost Reduction: Specialist partners can perform tasks cheaper due to economies of scale.
• Growth through Alliance: Lowers investment requirements, allowing firms to expand faster.

Limitations:

• Confidentiality: Sharing vital information with a third party risks data leakage to competitors.
• Sweat-Shopping: Outsourcing firms may exploit low-cost labor in developing countries, raising ethical issues.
• Resentment in Home Country: Taking jobs away from the home country can cause public dissatisfaction (unemployment issues).

Business-to-Consumer (B2C) commerce involves transactions between a business and the final consumer.
Salient Aspects:

• Online Selling: Involves selling goods and services online directly to customers (e.g., Amazon, Flipkart).
• 24/7 Convenience: Customers can shop anytime from anywhere.
• C2B Interaction: It allows customers to access call centers or email support for queries and complaints (Customer Support).
• Promotion and Delivery: Includes online marketing and delivery of digital products (music, e-books) or physical goods.
• Payment Options: Offers varied payment methods like cards, wallets, and CoD.

Limitations:

• Low Personal Touch: Lacks the warmth of interpersonal interaction, making it less suitable for products requiring a “touch and feel” experience (e.g., garments).
• Incongruence in Speed: Order placement is instant, but physical delivery takes time, causing customer impatience.
• Security Risks: High risk of identity theft, hacking, and virus attacks creates distrust.
• Technological Capability: Requires computer literacy and internet access, limiting reach in areas with a “digital divide”.

Conclusion: No, these limitations are not severe enough to restrict its scope. With advancements in logistics, secure payment gateways, and increasing digital literacy, e-business continues to grow rapidly. It is here to stay as it offers unmatched global reach and efficiency.

Factor	Online Store	Retail Shop
Price	Generally lower (discounts, no middlemen).	Often higher (MRP, overheads).
Variety	Huge range available globally.	Limited shelf space and stock.
Quality Check	Virtual check only (reviews/images).	Physical “touch and feel” possible.
Satisfaction	Delayed gratification (delivery time).	Instant gratification.

Sample Insight (e.g., a local boutique going online):

• Cost Savings: Saved ₹50,000/month on rent by closing one physical branch and moving stock to a warehouse.
• Reach: Expanded customer base from local neighborhood to nationwide delivery.
• Advantage: Automated inventory tracking reduced manual errors.
• Challenge: Increased packaging and courier costs.