Various Aspects Related to E-Business - Research Paper Example

Research Paper on E-Business of the of the Introduction This research paper will be centered towards identifying the various aspects related to e-business. This mechanism for trading has gained its importance with the emergence of advanced technology. E-business can be regarded as an application of ICT or information and communication technologies that supports all activities related to business. The word commerce in this mechanism is related to exchange of services and products between individuals, groups and businesses, and is often stated as an essential activity of any form of business. Electronic business majorly focuses on the effective utilization of ICT so as to enable all forms of external activities and set up a strong relationship of business with other businesses, individuals and groups. In the year 1996, the term e-business was coined by the internet and marketing team of IBM. E-business is not all about conducting business through internet but even refers to collaborating well with business partners and serving wide range of customers. There are various factors associated with the concept of e-business such as disruptive technology, accessing information on internet, providing information through internet and rapid evolution of advance technology. In this research study different e-business models will be analyzed in order to outline their respective advantages and disadvantages. The three models to be focused on in this study are business to business (B2B), consumer to business (C2B) and business to consumer (B2C). This research study will be based on secondary research and analysis will be conducted on collected qualitative data. The study will reveal various aspects of e-business which has facilitated its success and growth. Research aim, objectives and question The major aim of the research study is to determine the conceptual framework behind e-business. This research study will focus on critical components related to e-business. The objectives of the research study can be subdivided into various parts such as- To analyze the mechanism behind the concept of e-business To identify the various e-business models which are observed in real time scenarios To determine the advantages and disadvantages of e-business models such as B2B, B2C, and C2B. The research question is often stated as the base for any research study. In a particular study, the findings should always be aligned with the research question. The research question for this study is – “what are the disadvantages and advantages of e-business models such as business to business, business to consumer and consumer to business?” This study will be focused towards critically analyzing these three models and determining their respective strengths and weakness. Literature Review According to Beynon (2004), in 2003, Chris DeWolf and Tom Anderson had started off MySpace which was a social networking site that provided all its members information related to independent music scene across the globe representing teenage culture as well as Internet culture. In this website musicians usually signed up to post lyrics, tour dates and songs, and on the other hand, fans signed up the website in order to connect with their friends and link to their favorite bands. One of the most important benefits of Internet is that it allows organizations to execute their business operations at any time, with anyone and anywhere. E-commerce can be stated as selling and buying of goods or services across Internet. This mechanism only refers to various online transactions. The term e-business has mainly derived from e-commerce. There is a small difference between e-commerce and e-business. E-business also encompasses online information exchange which is not witnessed in e-commerce. E-business has permeated every possible aspect linked with daily lives in the last few years. Both organizations as well as individuals have embraced the new technology so as to enhance overall productivity, improve communication and maximize convenience globally. There are various types of e-businesses such as business to business (B2B), business to consumer (B2C), consumer to business (C2B) and consumer to consumer (C2C). Business to business majorly refers to businesses that sell or buy from each other over Internet. The online accessibility to data comprising of expected shipping date, shipping status and deliver date are provided by third party provider or seller and is totally supported by models of B2B. Electronic marketplaces in these models are a new approach through which large number of seller and buyers can perform e-business activities on the basis of interactive business communities. Figure1 represents the entire procedure of B2B model- Figure 1: Management process of B2B model (Source: Beynon, 2004, p. 57) As per figure1, it can be stated that these models has such a structure which is beneficial for performing commercial exchange. An effective business to business channel can result into improved productivity and economies of scale, enhanced flow of information and processing, overhead reduction and improved operational efficiencies. The other form of e-business which has gained significance over the years is business to consumer (B2C). This model is applicable to all those businesses that sell its services or products over Internet to customers (Beynon, 2004, pp. 56-58). It can even be said that e-retailers or online retailers had designed a supply chain that was consumer oriented specifically for the Internet consumers. As stated by Paul (2000), in distribution modes of B2C, value or supply chain usually relates to infrastructure or system that delivers services or goods through channels based on Internet to customers. Figure2 represents the overall phenomenon of B2C. Figure 2: B2C model (Source: Paul, 2000, p. 113) As stated in figure2, there are usually three classes of value chains of B2C. Firstly is the delivery of universe or millions of products or services within mature markets by operating as superefficient intermediary or performing under particular brand identity. Secondly is developing new market channels through leveraging Internet. Lastly, streamlining of the traditional business approach and eliminating all possible middlemen. C2B or consumer to business is another form of e-business, and it basically applies to any consumer who is selling service or goods to any business over Internet. Priceline.com can be considered to be an example of C2B model where customers or bidders set their respective prices for items like hotel rooms, airlines, etc., and sellers take the decision as whether to supply them or not (Paul, 2000, pp. 113-116). Over the next few years there is a great scope for the growth of consumer to business model due to increasing desire of consumers for lower prices and greater convenience. According to Meyer (2007), there are different models that describe the framework for e-business such as storefront models. In this model, merchants usually design a particular catalog online of products, utilizing website to take orders, ensure transactions in secured environment, manage customer data and send specific merchandize to the customers. Auction model can be stated as another framework of such e-businesses. There are specific auction sites available in which Internet users can log-in and act as a seller or bidder. Online auctions have gained its importance in the recent years and a leading company that has adopted this model is eBay. Portal model is another e-business model, in these sites visitors are provided with a chance to gain information regarding any element across the globe. These portal sites often offers information related to sports, news, weather and even provides the ability to access the Web. Dynamic Pricing models is another structure through which visitors can quote prices for any item of their choice such air tickets, home, consumer goods, etc. Bartering model is often considered to be the most prominent way of conducting e-business. In this framework, one item is offered for the exchange of another. The bartering sites usually comprise of product listings which needs to be sold. An initial offer is made by the seller so as to execute bartering and derive at a final agreement in collaboration with the buyer (Meyer, 2007, pp. 90-93). Often in these sites there is wide range of services or products available for bartering. Research Methodology The research methodology usually states the procedure which will be undertaken in order to derive at final results. Qualitative and quantitative are two major research techniques which are generally adopted by a researcher. However which of the method is most appropriate can only be determined through proper analysis of the nature of the research study. For instance qualitative research technique is most suitable when study needs to be conducted on factual data. Whereas, quantitative research method is appropriate for those research study which requires market data for conducting analysis. There are two forms of data available for a research study such as primary and secondary data. Secondary data majorly relates to data available on Internet, books, journals, magazines, etc. While primary data needs to be generated on the basis of focus group study, interviews, questionnaire survey, etc. This particular study will be based on a thorough analysis conducted over factual data. Hence qualitative research technique will be incorporated and the study will encompass secondary data (Silverman, 2009, pp. 96-97). These data will be obtained from books, articles and websites. The researcher’s interpretation on the collected data will state the findings for the research question. Findings Business to Business or B2B model has provided a great scope to business owners in terms of conducting their business activities effectively and establishing strong relationship with individuals, groups or other business. This form of e-business can be considered as a global trade market where any item can be purchased at any time. The main purpose is to save money and to make quick decision in the highly competitive business environment. Other advantage is that it makes ordering of materials simpler and faster, in an efficient manner with least error. Through this model strong network is set up between retailers, suppliers, distributors and various other partners. These channels also help to store customer related information in a common platform. It even enables tracing sales history of customers, products, and it can even encompass details about delivery terms, inventory location, transport arrangements, inventory replenishment related to response time and transportation costs. In general context, business to business is a platform through which businesses can exchange information and sell or buy goods or services in least possible time with little or no intervention. This form of platform facilitates savings through incorporating online links by replacing purchased bureaucracy. It even improves the level of efficiency in terms of ordering materials. This in turn makes business operations less complicated and enables faster transactions. In the overall process related to business to business framework there is less scope for errors in comparison to other business models. The entire structure of this form of e-business is designed in such a manner that it reflects just in time environment. This is highly beneficial as it reduces the total carrying cost associated with storage of inventory in the warehouse. In 2000 there was an explosive growth of business to business framework. The major reason behind such growth was to enhance faster and cheaper delivery and in order to do so hundred of websites was opened to support pharmaceutical, automotive, retail, chemical and various other industries. However e-commerce cannot be considered to be suitable for every type of business. The major problem in B2B model is inefficiency in relation to lack of credit. Even in some sites a certain amount is charged for any transaction and is regarded as a part of revenue. In B2B framework there lays a possibility of antitrust violations. This in turn causes a negative impact on the transactions being done between business and groups or individuals or other businesses (Ranjay & Garino, 2005, pp. 75-78). The other disadvantage is that in these models there is low barrier for market entry. This in turn increases the level of competition and makes it difficult for a business to achieve competitive advantage. The first major advantage of business to consumer model is the capability of direct link through which visual displays and content information can be accessed that is present in website of other client. On the other hand there is even the provision to update E-catalog at any time in terms of adjusting prices and incorporating new products without wastage of any time and cost related to traditional approach of printing catalogs. There is even an advantage of searching capabilities in relation to corporate name, location, item, division name, partner, manufacturer, price and any other needs. This framework even helps to reduce the advertising or marketing expenses and makes it easier to compete with larger organizations on the basis of product availability, price and quality. In customer perspective this model enables customers to shop at anytime from anywhere, thus increasing their degree of convenience. On the other hand any business can reach out to large base of customers across the globe on basis of Internet. This 24 hour store even facilitates reduction of sale cycle through elimination of unnecessary mailings and phone calls (Nelson, 2003, pp. 89-95). It has even helped to reduce overall costs associated with business in terms of transaction costs, processing costs, inventory, purchasing costs, employees, physical stores, etc. The business to consumer model eliminates the need for middlemen as selling are done directly to customers. This form of e-business helps to establish better relationships with suppliers and dealers. By utilizing this process, shipping of real time inventory can be effectively done and even site or stock levels can be adjusted accordingly. Workflow automation is achieved through this procedure as it encompasses verification based on secured and automated registration. On the other hand accounting and banking features are customized for various pre-approved third party vendor, direct sales, and internal transfer or consignment transactions. This mechanism helps to conduct various business administration tasks that can be updated, categorized and stored in real-time and even can be accessed as and when required on demand of customers. It even eliminates the requirement for sales support service and customer service (Wilson, 2000, pp. 56-64). Even recent technological advancements give customers an option for secure payment online. The disadvantages of business to consumer model are that there is a need to generate catalogs every time as and when new information or items are incorporated. It gives a limited market place to customers and often physical stores gain more significance in comparison to online stores. In certain cases, some transactions or sales may be executed indirectly or even need support of third party in order to reach to target customers. There can be inefficient business administration as information related to inventory level, receiving logs and shipping needs to be updated manually and this in turn can result into unavailability of latest information. The auction model or better pricing models can be considered to be the most appropriate structures for this form of framework. Its major advantage is that it gives a chance to consumer to set their own prices. Bidding online is a new phenomenon and has a great scope in the coming years. The framework is even beneficial as customers can exercise total control on the selling process and gain accessibility to wide range of items. On the other hand businesses also have a scope to analyze different prices and set a deal at best price. It gives a chance to business to achieve competitive advantage in the market place. The major disadvantage of this framework is that there lies a possibility that information which is displayed on the website may not be updated by the firm. This in turn results into confusion for the customers. On the other hand there is often an issue of secured payment option due to which many customers do not prefer such framework (Carvahal, 2002, pp. 123-135). There is even the problem for authenticity as customers need to rely upon the information available in order to make a purchase. On the contrary often businesses witness low revenue margins due to such models and increasing competition. Conclusion As per the analysis, e-businesses provide opportunities to all progressive enterprises in terms of reinventing their firms, automating traditional business procedure, streamlining process of business, adapting to new situations, market demands and opportunities. The speed of transmitting information is essential in any business process and these frameworks such as business to business, business to consumer, or consumer to business enables faster flow of information. Supply chains of these mechanisms based on Internet are highly efficient and encompass least cost possible. In the highly competitive business environment these models serve as a medium through which strong connections can be established and better profit margins can be gained. These channels even help to establish strong relationships with customers, dealers or suppliers. On the contrary there are certain loopholes associated with these frameworks such as lack of information availability, credit issues, technical failures, etc. However if these drawbacks can be effectively mitigated than e-business models will achieve more success and growth in the nearby future. References Beynon, D. P. (2004). E-business. Basingstok: Palgrave. Carvahal, D. (2002). Giants set to embrace electronic publishing. The New York Times, 23(1), pp. 123-135. Meyer, M. H. (2007). The fast path to corporate growth: leveraging knowledge and technologies to new market applications. UK: Oxford University Press. Nelson, M. (2003). Portals to the products you need. PC Novice, 24(2), pp. 89-95. Paul, T. (2000). Electronic commerce - strategies & models for business-to-business trading. New Jersey: John Wiley & Sons. Ranjay, G., & Garino, J. (2005). Bricks to clicks. Siliconindia, 13(2), pp. 75-78. Silverman, D. (2009). Doing qualitative research. London. Sage Publications ltd. Wilson, W. (2000). Up next: an exchange of exchanges. Internet Week, 20(2), pp. 56-64. Read More