Emerging Modes of Business

Gone are those days, when we had to plan to visit a market to buy one commodity. Nowadays, everything is one click away, place an order from your phone, and the item gets delivered within a few minutes or a day. Online shopping is getting successful because of its convenience and simplicity. It is possible because of only two electronic networks, commonly known as e-business and e-commerce.

Let’s understand each concept in details.

Related link: The difference between Businessman and Entrepreneur 

Introduction of E-Business

E-business, commonly known as electronic or online business is a business where an online transaction takes place. In this transaction process, the buyer and the seller do not engage personally, but the sale happens through the internet. In 1996, Intel’s marketing and internet team coined the term “E-business”.

Additional Reading: What Is Entrepreneurship?

Features of E-Business

Here are the few features of e-business:

  • Easy setup
  • No geographic barriers
  • Cost-effective
  • Flexible trading hours
  • Cheap marketing policy
  • No interaction between buyer and seller 
  • Delivery of goods takes extra time
  • Transaction threat is prominent than traditional business
  • People can buy any goods and services from anywhere and at anytime

You might also want to know: What is Marketing Mix?

Advantages of E-Business

There are various e-business advantages, but the most notable points are mentioned below. 

  • Easy to Organize – The online business can be set-up at home but only if the necessary software,  the internet, and a device are available.
  • More Economical – Online business is more affordable as the cost required to set-up a traditional business is much higher. 
  • No Geographical Barriers – There are less geographical boundaries in terms of e-business as anyone can buy anything from anywhere at any given time. 
  • Government Subsidies – e-Business or online businesses receive advantages from the government as they are promoting digitalization.
  • Flexible trading hours – Since the internet is available every time, anybody can buy and sell goods or service to the customers through the business website at any given point.

Do you know? What is the difference between Marketing vs Branding?

Disadvantages of E-Business

Though e-business has many advantages, they also have certain disadvantages. Some of the barriers are mentioned below :

  • No Personal Connection – There is no personal touch, and the customer cannot feel and touch the product when buying. This makes it difficult for the customer to verify the quality of the product. Whereas, in the traditional business, we can make contact with the seller or salesperson and develop trust with the customer.
  • Delivery Time –  It takes time to deliver the products as compared to the traditional business where you see the product and buy it. This delivery duration often discourages customers to buy online. However, e-businesses like Amazon are promising one-day delivery time. 
  • Security Issues –  In online business, people are often engaged in a scam as it is effortless for hackers to get the necessary financial details of a customer. 

Added link: Importance of Consumer Protection

Definition of E-Commerce

E-Commerce stands for electronic commerce and is a process through which an individual can buy, sell, deal, order and pay for the products and services over the internet. In this kind of transaction, the seller does not have to face the buyer to communicate. Few examples of e-commerce are online shopping, online ticket booking, online banking, social networking, etc.

The essential requirement to operate e-commerce is a website. After that, selling, marketing, advertising, and conducting transaction are done through the internet.

Types of E-Commerce

  • Business-to-Business (B2B) – When the selling and buying of goods and services are between businesses. Manufacturer and wholesalers operate with this kind of electronic commerce. Example: Oracle, Alibaba, Qualcomm, etc.
  • Business-to-Consumer (B2C) – Here, the goods are commercially traded by the business to customer. Such as Intel, Dell etc.
  • Consumer-to-Consumer (C2C) – The commercial business is done between customer to customer. Example: OLX, Quickr etc.
  • Consumer-to-Business (C2B) The business transaction happens between customer to the business.

Introduction to Outsourcing

It is a process where the business operation or particular business activity is given as a contract to the specialized agency. Most of the company outsource security, sanitation, pantry, household, etc. by making a formal agreement with that particular agency.
The agency then assigns the workforce as required by the company and charge them for their assistance. Across the globe, outsourcing business is rising rapidly, and with its help, firms can focus on their core operations and gain more profits and enhance product quality.

Advantages of Outsourcing

Few advantages of outsourcing are given below.

  • Cost-Benefit – No need of hiring anyone in‐house permanently. Hiring costs are reduced by saving time and efforting on training. 
  • Encourage Employment, Entrepreneurship, and Exports – It encourages entrepreneurship, employment, and exports in the nation from where the outsourcing is made.
  • Less Labour Cost – The cost of labour is cheaper than the host nation. For instance, In India, there is a significant skilled human resource. Therefore,  the labour cost is much less expensive.
  • Passage to High‐quality Services –  Only the skilled individual is given a particular task resulting in better service and few errors. 
  • Low investment –  The company do not have to invest in the latest software,  infrastructure, and technology themselves, and let the outsourcing partner manage the complete infrastructure.
  • Enhanced Performance – The outsourcing results in improved productivity in the complementary areas of a company.

Explore link: What is 4 p of Marketing?

Disadvantages of Outsourcing

  • Less Customer-Centric – An outsourced merchant caters to multiple companies, so they lack concentration on an individual company’s tasks.
  • Security Threat – A company’s confidential news may be leaked, so there is a safety concern and may result in a company’s losses. 
  • Inferior Services –  Sometimes, outsourcing includes sub-standard quality service and extends of delivery time.
  • Ethical Problems – Outsourcing creates employment and generates capital for another nation instead of the origin country. 
  • Lack of Communication – Can include disagreement in various steps of operation due to the lack of communication, delayed services, and poor quality.

The above mentioned is the concept, that is elucidated in detail about ‘Emerging Modes of Business’ for the Commerce students. To know more, stay tuned to BYJU’S.