E-Business as the Latest Form of Business in Organizations - Coursework Example

Table of Contents Introduction 2 2. E-businesses 2 Esure 2 Wikipedia 3 Mortgagebundles 5 Podcast 6 3. Challenges 7 4. Conclusion 8 References 9 1. Introduction E-business is the latest form of business that organizations are adopting today. E-Business requires a powerful platform – the internet to gather information and to conduct transactions. E-business includes buying and selling of goods and services, servicing customers, collaborating with business partners and conducting electronic transactions within an organization. E-business means conducting any aspect of business online and includes functions like buying, selling, transacting, or exchanging information with customers, suppliers, distributors, resellers, or employees (Robertson & Sribar,1997). 2. E-businesses Four such e-business concepts would be analyzed here to study their innovative strategies. Esure.com Esure was launched in 2000 offering insurance cover using the internet as the primary sales channel. Using technologically advanced systems they became the fastest growing insurers ever. They are known for their quality cover, their online services and their innovative marketing. They aimed to harness the efficiency of the internet to give a better deal to responsible drivers and the careful home owners. They clubbed together several factors and ensured that esure was exceptionally well placed to harness the benefit of the internet as the major distribution channel for insurance (BBC News, 2000). These factors included the strength of the Hallifax brand, the vast potential of the internet, and the founder’s experience of launching mould breaking companies offering best prices and best services to the customers. They were confident that e-commerce would transform the insurance sector and they wanted to be at the heart of the revolution with esure. Esure uses the internet and the phone as the channels and they kept the premia low. They then launched the Sheilas Wheels brand in 2005 initially offering only car insurance. Sheilas’ Wheels is now one of the most recognized female insurance brands in the UK. Today they offer insurance cover for anything that a person could think of – home, vehicles – such as car, motorbikes and vans, pet insurance, and not to forget travel insurance. They offer online quotes, they accept online payments and they also allow online renewal of insurance. They keep the customers updated on insurance news through their website. They also have abundance of guidance provided to the insurance buyers so that they can take an informed decision. They offer special rats for those who opt for more than one insurance cover. Esure, a part of the HBOS, adopted a slick marketing campaign, a brand awareness that soon became the envy of many and a service that delivered what they promised (Net Direct, 2008). They made the website user-friendly so that the online quote system was simple. Added to this was excellent service and competitive pricing. All of these factors have contributed to the growth of e-business pursued by esure. They have built themselves a solid online foundation for a business which continues to grow. Wikipedia.org Wikipedia is an online encyclopedia that is free and immensely searchable. It is open to everyone, anyone can contribute and anyone is free to edit the contents. It is an open source solution for a complex dynamic system called encyclopedia. It has no editors and anyone is free to delete any content. Wikipedia is one of the most inspiring success stories on the internet today. When initially launched by Jimmy Wales, he too thought it was an insane idea to have a free online encyclopedia which anyone could edit, delete or contribute to. It has no fact checkers and no staff at all. In less than four years, Wikipedia has grown to have more than 1 million entries written in 100 languages from Albanian to Zulu (Waldman, 2004). It is a fantastic research source and it demonstrates what is possible through collaboration and cooperation over the internet. The main problem with Wikipedia is that it lacks authority. However, when Wikipedia was compared with two established, traditional digital encyclopedias: Brockhaus and Microsofts Encarta, it scored over others, on breadth, depth, and comprehensibility of content, ease of searching, and quality of multimedia content. It may not replace the traditional encyclopedia but as far as content is concerned it does not lack anything. Wikipedia is continuously evolving and on any given day there are 3000 new entries. As the size gets bigger the number of edits also has increased. Wikipedia has the potential to reveal what is normally hidden in the traditional encyclopedia. There are countless decisions that lie behind each entry. In Wikipedia the decision-making never stops which leads to edits and re-edits of the same entry over and over again. There are there reasons why Wikipedia has been such a success. The first is its ownership and the lack of commercial imperative. It is now owned by a foundation which means that people willingly give their time and intellectual property to the venture. The second is its overriding editorial principle that all articles show a neutral point of view. The third and the most important factor has been the evolution of an intricate and democratic social order that has allowed such a venture to keep growing. Wikipedia is one of the wonders of the digital age and it demonstrates how the internet can evolve as a true “citizens’ medium”. Mortgagebundles.com Mortgagebundles had started off by lending money to borrowers at very cheap rates and with minimum formalities. This was again an innovation of e-business where internet was the primary mode of interaction with the customers or borrowers. Mortgagebundles.com aimed to find cheaper mortgages for borrowers, based on a bulk-buy model (Rob, 2006). This was a revolutionary way of financing home ownership. The concept was to bundle the like-minded borrowers together and then ask the lenders to bid on the bundle of mortgage applications. The idea was that a bundle of borrowers, say fifty at a time, would be more attractive to the lenders than single applicants. The concept required the borrower to answer nine simple questions with the assurance that all information would be confidential. The questions included the type of loan, the credit history and the employment status. Similar customers were then bundled together for lenders who then took part in an online auction and the one who offered the most competitive deal was granted the business. The potential customers then receive an email with details of the winning mortgage deal. Even at this stage the borrower has the option to withdraw. The lenders benefited as well as they got a platform to conduct business without having to spend on advertisements. Besides the process was streamlined as it did not require the customers and the mortgage advisers to have exchanges and interviews. This concept immediately attracted several lenders because the lenders could offer the consumers a cheaper deal because of the bulk business. mortgagebundles.com’s revenue model was based on a monthly fee from the lenders as well as a ‘procuration fee’ of 0.24 percent from every deal completed (Kassam, 2006). In any case these charges were paid to the brokers by the lenders. The borrowers did not have to pay any brokers’ fees. The service was free to them. The lenders could see and inspect all the auctions available at the website and decide which auction they wanted to participate in. This concept was another challenging way of harnessing the benefits and advantages of the internet to reduce costs, improve efficiency and strike lucrative deals. This is an example of B2C platform where buyers and sellers meet and exchange products and services. Podcasts.net This was yet another innovation in the digital era where the internet was used to download the audio and video files. This requires special client software applications known as podcatchers like iTunes, Juice or winamp (Wikipedia). These applications could identify and download new files in the series when they were released. These files were published as RSS or Really Simple Syndication feeds, using XML file format technology (Withers, 2008). These files can be delivered to computers or portable music players. They can be automatically deleivred to the computer and then transferred to the MP3 player or the iPod. Listeners can select the files they wish to download or set the software to automatically download the files when it is available. Podcast.net has been able to bring the customers and marketers on the same platform. It is a great way to attract customers. The marketing opportunities are obvious as the internet marketers can insert advertisements into the podcasts. Podcasts attract search engine traffic also. For the customers the benefits are the ease of use and the availability of many free and low cost software. It allows the customers to stay on top of the trends in technology and keep up with the current events. The main advantage is that podcasts have the ability to be syndicated, subscribed to and downloaded automatically when new content is added. Podcasting is targeted so it becomes easy for marketers to take advantage of this situation. Once people have listened to the first podcast and subscribed to it, this suggests that they are interested in listening further. Podcasts give measurable results of how many people have listened and for how long (Mitch, 2008). It is also possible to measure the conversion rates. Not only is the audience captive and an interested audience, it is now a new method of direct marketing. Apart from being cost effective, it also gives exposure to the needs of the market. Advertisements on the radio and television last only a few seconds whereas people listen to the podcasts for one to three minutes. Hence it fetches better exposure at cheaper costs. Podcasts are hence yet another innovative method of using internet as a platform to market products and services. 3. Challenges All the four e-businesses have been innovative in their approach. This shows how the internet has been able to bring people closer together and how it is possible to use technology to ease the marketing functions at reduced costs while enhancing efficiency. The wide range of products – from insurance to mortgages and from encyclopedia to free downloads - have truly been innovative. For the success of e-business policy is important (Jarvenpaa & Tiller, 1999). This perhaps is the reason that wikipedia faces challenges as there are no rules and anyone can delete any subject or matter. Any strategy has to be interlinked with political, social and regulatory environments in which e-businesses operate. These forces can ultimately create blocks, increase or decrease regulation, create entry barriers and lower or raise the cost of competition. 4. Conclusion and future trends Marketers are now trying to take advantage of the social networking sites such as FaceBook, MySpace and Twitter. These have particularly been useful in service organizations such as the hospitality industry. Marketers are also tapping into Blogs as blogging is going to be an industry by itself. Technology has already advanced from web2.0 to web3.0 technology. Blogging is an industry because it attracts buyers and sellers, advertisers and content creators, celebrities, personalities, press, media, analysts and even booth babes (Rodella, 2008). This social media industry has been predicted to have a ten year growth. Blogging companies such as TechCrunch bring in $240,000 per month in advertising and gets additional revenues from conferences and parties (Zuckerman, 2007). This was started as a hobby but today it fetches more than any business could with staff strength of just eight people. Hence the internet has provided opportunities in different ways to every individual. It depends on one’s interest and the familiarity with technology to harness it and use it to their advantage. Reference: BBC News. (2000). Halifax to offer online insurance. Retrieved online 23 August 2009 from http://news.bbc.co.uk/2/hi/business/646184.stm Jarvenpaa, S. L., & Tiller, E. H. (1999). Integrating market, technology, and policy opportunities in e-business strategy. Journal of Strategic Information Systems, 8, 235–249 Kassam, I. (2006). Home loans go under the hammer. The Independent. Retrieved online 23 August 2009 from http://www.independent.co.uk/money/loans-credit/home-loans-go-under-the-hammer-524913.html Mitch. (2008). The Advantages of Podcasting. Retrieved online 23 August 2009 from http://mitchcarson.com/new-technology/the-advantages-of-podcasting/ Net Direct. (2008). esure Insurance Review. Retrieved online 23 August 2009 from http://www.carinsuranceuk.co.uk/esure-car-ins.php Rob. (2006). MortgageBundles.com. Money Watch. Retrieved online 23 August 2009 from http://money-watch.co.uk/266/mortgagebundlescom Robertson, B., & Sribar, V. (1997). Enriching the Value Chain: Infrastructure Strategies Beyond the Enterprise. Chapter 3, Intel Press IT Best Practices Series, Retrieved online 23 August 2009 from http://www.intel.com/intelpress/chapter-book3.pdf Rodella, C. (2008). Is Blogging really an Industry? Retrieved online 23 August 2009 from http://www.web-strategist.com/blog/2007/11/09/is-blogging-really-an-industry/ Waldman, S. (2004). Who knows? The Guardian. Retrieved online 23 August 2009 from http://www.guardian.co.uk/technology/2004/oct/26/g2.onlinesupplement Withers, B. (2008). The Advantages of Podcasting; Another Social Media Marketing Trend. Retrieved online 23 August 2009 from http://www.articlesbase.com/internet-marketing-articles/the-advantages-of-podcasting-another-social-media-marketing-trend-481946.html Wikipedia. Podcast. Retrieved online 23 August 2009 from http://en.wikipedia.org/wiki/Podcasting Zuckerman, S. (2007). Yes, some blogs are profitable - very profitable. Retrieved online 23 August 2009 from http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/10/21/BUVJSNSTC.DTL Read More