Emerging Modes of Business Class 11 Notes

The unit is a short one and it begins with the definition, because every question on e-business begins with it, and the definition has to be written in a way that shows both the electronic medium and the commercial purpose.

• E-business means the carrying out of the business activities through the electronic medium, and the electronic medium is the internet together with the other digital networks, and the business activities are the buying and the selling of the goods and the services and the other commercial transactions, that is the payments, the orders, the information and the services that are moved over the net in place of being moved physically.
• The two words of the definition both carry a mark. Electronic means the transaction is carried on without the physical movement of the goods and the money, and the medium is the internet. And business means the transaction has a commercial purpose, that is the firm is earning and not merely giving the information free, so a free service or a government information page is not e-business in the sense of the syllabus, though it uses the same technology.
• The e-commerce is the buying and the selling of the goods and the services over the internet, and the e-business is the wider term, because it covers the whole set of the business processes that are run electronically, that is not only the selling but also the procurement of the raw material, the designing of the product, the recruitment of the staff, the training, the payment of the wages, the customer service and the accounting.
• So the e-commerce is a part of the e-business, and a firm may run most of its business on the net and yet carry on a part of its selling in a physical shop, and the two do not exclude each other, and the e-business is called an emerging mode of business because it has appeared alongside the traditional forms and is growing into them rather than replacing them wholly.
• The three components of the e-business are the business itself, that is the firm that trades, the customer, and the network, that is the infrastructure of the internet, the websites, the digital payments and the mobile, and all three must be present, because the business without the network is the traditional business and the network without the business is only a technology.
• The reason the mode has emerged is the combination of the computer, the network and the mobile, and it is the affordable access to the network that has made it possible for a small firm also to reach a national and a global market, and this is the reason the chapter matters for the small business as much as for the large one.

The scope is asked in a form that divides it four ways, and the first and the most examined division is by the parties to the transaction, because it decides who may be on the two ends of a single online sale.

• The business to business, that is the B2B, is the transaction in which one firm buys from or sells to another firm, and it is the largest of the four in value, so a manufacturer buying the raw material from a supplier, a wholesaler selling to a retailer, or a firm buying the machinery, and the saving in the e-business here is the removal of the cost of the physical movement of the paper and the middle offices.
• The business to consumer, that is the B2C, is the transaction in which a firm sells directly to the final consumer, and it is the retailing done over the net, and it is this form that the syllabus means when it says the customers, and the saving to the firm is the cost of the shop and the staff, and the gain to the customer is the wider choice and the lower price.
• The consumer to business, that is the C2B, is the reverse of the second, and it is the individual who offers his own service, or his own price, to the firm, and the firm chooses from among them, and a freelance writer who bids for the work of a publisher, a photographer who offers the images, a student who offers the tutoring and a small farmer who offers the produce are all of this form, and it is the form that has given the individual a market without any capital at all.
• The consumer to consumer, that is the C2C, is the transaction between two individuals, one of whom is the seller and the other the buyer, and it is the form in which a classified site connects them, so the sale of a second-hand book, of a second-hand mobile phone or of a used bicycle, and the firm is absent from this transaction altogether, so the e-business here is the platform and not the trade.
• The government also stands at one end of a transaction, and the e-governance, in which the state is the supplier of the service and the citizen is the consumer, is the form that has grown the fastest in terms of the number of the persons covered, because the certificate, the licence, the tax and the examination result now reach every person and not only the ones who live near the office.

The other three divisions of the scope are by the function of the firm that is run electronically, by the size of the firm that uses it, and by the fact that the state itself is a user, and these three carry the marks that distinguish a full answer from a list of the four letters.

• The first division is by the function, and here the firm on the net is not only selling, it is buying, it is employing and it is serving. The procurement is the buying of the raw material and the stores on the net. The marketing and the sales are the display of the goods, the placing of the order and the payment. The customer service is the enquiry, the complaint and the support. And the human resource function is the advertising of the vacancy, the receipt of the application, the selection and the training of the staff, all of which are done on the net.
• The second division is by the size of the firm, and it is the division that the syllabus stresses, because the e-business is not confined to the large corporation. The large firm uses it to cut the cost of the transaction and to manage the supply chain, but the small firm uses it to reach a market that it could never serve with a shop in one street, and the cost of the entry is only a website and a connection, so the medium has lowered the entry and it has widened the market of the small firm, and this is the reason the chapter matters for the small business as much as for the large one.
• The third division is by the state, and here the government itself has become a user of the same technology. The e-governance is the delivery of the public services, the issue of the certificates, the payment of the taxes, the result of the examination, the allotment of the licences and the whole of the public information, on the net, and this is a very large part of the scope, because the volume of the transactions of a state is larger than that of any single firm and it touches every citizen.
• The infrastructure on which all of it rests is also part of the scope, and it is the internet and its web sites, the digital payment systems of the banks, the mobile network and the digital signature, and the firm that wishes to trade on the net must have all of them, and the absence of any of them is the limitation that the rural business faces.
• The result of the scope is that the e-business is not a single transaction but a change in the whole way of doing business, in which the information moves instead of the paper, the enquiry and the order happen before the customer travels, and the money moves through the banking system rather than through the cash box.

The benefits are asked in three columns, the business firm, the customer and the government, and the three columns must not be mixed, and the losses or the limitations are asked along with them.

• To the business firm the first benefit is the lower cost of the transaction, because the shop, the rent, the sales staff and the display of the stock are no longer required, and the cost of the information and the communication also falls, so the same transaction is performed more cheaply.
• To the business firm the benefit is the wider market, because the firm is no longer limited by its own location and can sell to the whole of the country and beyond, and this widens the demand that it can serve and reduces the dependence on the local buyer.
• To the business firm the benefit is the twenty-four hour availability, the seven days a week, and the round the clock service, so the orders can be placed at any hour, and the cost of the staff is lower because the interaction is automated, and the firm is also freed from the constraint of the office hours.
• To the business firm the benefit is the speed of the communication, in which the enquiry, the order, the confirmation, the payment and the delivery are all recorded at once, and the paperwork falls, and the transparency of the price brings the firm into competition on the price, and the firm can customise the offer for the individual customer at a small cost.
• To the customer the benefit is the choice, because the goods of the whole market are available on one screen, and the price is transparent, so the customer can compare and choose, and this is the consumer sovereignty that the e-business gives in practice.
• To the customer the benefit is the convenience and the twenty-four hour shopping, the wider choice, the cheaper price that follows from the lower cost of the transaction, the information about the product before the purchase, the easy access to the reviews, the time saved in not having to travel to the market, and the new modes of payment, that is the card, the net banking and the wallet, which the customer uses without carrying cash.
• To the government the benefit is the efficiency of the delivery of the services, since the certificate, the licence, the tax payment and the result are given on the net without the file being moved from one office to another, and this is the saving of the cost of the administration, and the transparency and the less scope for the corruption that the direct online payment allows.
• The limitations have to be written along with the benefits, and they are the absence of the personal contact and of the personal service, the inability of the customer to see and to touch the goods, the possibility of the fraud, of the computer virus, of the misuse of the card, the requirement of the infrastructure of the power and the network, the difficulty of the small firm that cannot afford the technology, and the divide that this creates between those who have the access and those who do not.

The syllabus names this comparison expressly, that the e-business is to be distinguished from the traditional business, and the answer is a table of points, so write them in pairs and keep the two columns clean.

• The medium is the first difference, because the traditional business is carried on face to face in a physical market with the goods actually moving, while the e-business is carried on the electronic medium, that is the internet, in which the transaction moves but the goods need not move at all, so a service can be sold from one end of the world to the other.
• The timing is the second difference, because the traditional business runs within the fixed hours of the shop, and the e-business runs twenty-four hours a day and seven days a week, so the transaction is possible at any hour of the night.
• The reach is the third difference, because the traditional business is confined to the customers who can reach the shop within a reasonable distance, while the e-business is not confined by geography and can serve a national and a global customer at the same cost per transaction.
• The contact is the fourth difference, because the traditional business depends on the personal relationship, on the advice of the salesman and on the goodwill of the shopkeeper, while the e-business depends on the information displayed and on the technology, and it is therefore impersonal but far more uniform.
• The product is the fifth difference, because the traditional trade was practical only for the goods, since the goods could be seen and touched and carried away, while the e-business sells the services as well, since a course, a ticket, an insurance and a ticket of the railway can be delivered over the net, and these are the intangibles that the syllabus calls the services.
• The cost is the sixth difference, because the traditional business carries the cost of the premises, the rent, the staff, the stock and the transport for every transaction, while the e-business carries a largely fixed cost of the technology that is spread over a very large number of transactions, so the cost per transaction is lower as the volume rises.
• The seventh difference is the middleman, because the e-business allows the producer to reach the customer directly and so removes one layer of the intermediaries, and this is why the price to the customer can be lower and the margin of the firm can be higher at the same time.
• The conclusion to state is that the e-business does not replace the traditional business, because the customer who wishes to touch the product and to deal with a person will go to the shop, and the two are used together, and the firm that can do both gains the widest market at the lowest cost.

The last part of the unit is the condition on which all of this depends, because the e-business is not possible without the infrastructure and it is not complete without the conclusion about how the two modes stand to each other.

• The first requirement is the internet, that is the network that carries the enquiry, the order, the payment and the information, and the firm must have the web site or the presence on the platform through which the customer reaches it, and the site must carry the catalogue, the price, the terms of the delivery and the address for the service.
• The second requirement is the means of the payment, and this is where the digital payments of the banking system are used, that is the card, the net banking, the wallet and the UPI, because the transaction cannot be closed on the net without a way of moving the money, and this is the link with the business services unit.
• The third requirement is the mobile, which has brought the customer inside the transaction instead of leaving him outside it, because the order can now be placed from the phone, and this has made the e-business reach the large population that has a phone but not a computer.
• The fourth requirement is the security, which is the digital signature, the encryption of the payment and the record of the transaction, because the customer will not pay by the net if the firm cannot show that the message is genuine and that the money is safe.
• The conclusion to state in the answer is that the e-business does not replace the traditional business, and the two are used together, and the reason is that the customer who wishes to see and to touch the product and to deal with a person will still go to the shop, while the firm that can do both reaches the widest market at the lowest cost, and the sensible firm therefore uses the net for the reach and the shop for the experience.
• The last point of the unit is the effect on the smaller economies, where the e-business gives the small firm the reach that it never had and at the same time gives the large firm the ability to reach the customer directly and to remove the middleman, so the market of the small firm is both widened and made harder, and the two effects have to be written together.