Brief of the Chapter - Emerging Modes of Business | Business Studies (BST) Class 11 - Commerce PDF Download

CHAPTER  5

Emerging Modes of Business 

Meaning  

In this age of the internet, the world commerce has gradually started linking with it, this has brought a new concept of commerce called e-commerce/e-business. Now we are capable of reaching the users of the Internet all over the world simply by opening a shop on the Internet. Internet users can order goods, receive their delivery and make their payments while sitting at their homes on the Internet.  

Scope of e-Business  

It can be understood by the viewpoints of the parties involved and making transactions :  

1. B2B Commerce: It is that business activity in which two firms or two business units make electronic transactions. For example- one can be a producer firm and the other a supplier firm.  

2. B2C Commerce:  Business to the customer In this one party is a firm and the other party is a customer. On the one hand, a customer can seek information through the Internet about products, place orders, get some items and make payments and on the other hand, the firm can conduct a survey at any time to know who is buying, and can also know the satisfaction level of customers.

3. Intra-B Commerce: Within business Commerce: - Under it, the parties involved in the electronic transaction are the two departments of the same business. For Example, through the Internet, the marketing department can interact constantly with the production department and get customised goods made as per the requirements of customers.  

4. C2C Commerce - Customer-to-Customer Commerce - Under it, both the parties involved in electronic transactions are customers. It is required for the buying and selling of those goods for which there are no established markets. For example old cars through the internet.  

Benefits of e-Business  

The major benefits of e-business are as follows:  

1. Worldwide reach- The Internet gives businessmen an extended market. New customers come in contact with them. This results in an increase in sales.  

2. Elimination of Middlemen - Ever since e-business came into existence wholesalers and retailers have started disappearing. Now, most of the producers have started having direct contact with customers. As a result, the consumer gets goods on less price.  

3. Easy Distribution Process - Many types of information and servicer can be received on computer through e-business. This has simplified the system of distribution and has also made it less costly.  

4. Lower Investment required - In this, you do t require any big showroom or huge investment. All you need is a computer and the Internet. 

5. Easy to launch new products - Any company can launch its new product in the market through the medium of E-Business. Complete information about the product is made available on the Internet. In this way, the consumer and other businessmen get information about the new product while sitting at home.  

Resources Required for Successful e-Business Implementation  

The resources required for the e-business are :  

1. Computer system - The presence of a computer system is the first requirement of e-business. The computer can be linked to the Internet by just pressing its keys.

2. Internet connection - Internet connection is very essential and nowadays we can get this facility by sitting at home.  

3. Preparing the web page- This page has the greatest importance in the use of e-business. It is also known as the Home Page. Any product that is to be shown on the Internet is displayed on the web page.  

4. Effective telecommunication system- e-business requires an effective telecommunication system in the form of telephone lines etc.  

Online Transactions  

Online transaction means receiving information about goods, placing an order, receiving the delivery and making payment through the medium of the Internet. Under this system, the sale purchase of every type of thing, information and service is possible.  

Payment Mechanism  

Payment for the purchases through online shopping may be made in the following ways :  

1. Cash on delivery (CoD) - A cash payment can be made at the time of physical delivery of goods.  

2. Net-banking transfer - The customer can make an electronic transfer of funds (EFT) to the account of an online vendor over the Internet.  

3. Credit or Debit cards - The customer can make payment for online transactions through a debit or credit card by giving the number and name of the bank of the card.  

Security and Safety of e-Transactions  

The following methods can be used to ensure the security and safety of online transactions.  

1. Confirming the details before the delivery of goods - The customer is required to furnish the details such as credit card no., card issuer and card validity online.  

2. Anti-Virus Programmes - Installing and timely updating anti-virus programmes protects data files, folders and systems from virus attacks.  

3. Cyber crime cells - Govt. may set up special crime cells to look into the cases of hacking and take necessary action against the hackers.  

Outsourcing or Business Process Outsourcing (BPO)  

Many activities have to be performed for the successful conduct of business like production, buying, selling, advertising etc. When the scale of business is small, the businessman used to perform these activities easily. However, with the enlargement of the scale of business, this job has become tedious. Therefore, to overcome the difficulties connected with the performance of many activities and to get the benefit of specialisation, these services are now obtained from outside the organisation. This is called outsourcing of services or BPO.  

Need for BPO  

BPO is essential for the following reasons :  

1. Obtaining Good Quality services - If a company attempts to perform all the activities itself, there is every possibility of quality of services being affected adversely. To avoid this difficulty, the need for obtaining services from outside is felt.  

2. Avoiding Fixed Investment in Services - If a company attempts to get these services from within the organisation itself, it has to establish different departments for this purpose which involves huge investment. Therefore it appears justified to get these services from outside the organisation at a little cost.  

3. Smooth running of business - outsourcing of services is needed to run the business smoothly. The attention of a businessman gets distracted from various small things and will be focused on the main activity.  

Scope of BPO  

In modern business, many outside services are used. Out of these services, the following are the important ones :  

1. Financial Services - These servicesares those outside services which help the company in some way or other in the management of finance.

2. Advertising services - Advertisement is very necessary for increasing sales. If this service is obtained from an outside agency, it will cost less and the quality of the advertisement will also be good.  

3. Courier services - These services mean delivering goods, documents, and parcels from the company to customers and vice-versa.  

4. Customer support service - These services mean delivering goods to customers and to give after sale services also. Generally, the manufacturers of TVs, Fridge, ACsC etc. use these services.    

Questions  

1. What is electronic business?  

2. What are some limitations of e-businesses?

3. How does e-commerce make mass customisation possible? 

4. Explain briefly the need for outsourcing services.  

5. Write about advertising services and courier services.  

6. Name the essential resources required for e-business.  

7. Define online transactions.