CLASS XI BUSINESS STUDIES

CHAPTER V
EMERGING MODES OF BUSINESS
Meaning: In this age of 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 Internet all over the world simply by opening a shop on the
Internet. The Internet users can order for the goods, receive their delivery and make their
payment while sitting at their home on the Internet.

Scope of e-business (e-Business models)

The scope of e-business is very wide. Business functions like production, finance, marketing,
personnel etc., and managerial activities such as planning, organizing, staffing and controlling
can be carried out effectively through computer networks. Various parties are involved in
electronic transactions. Thus, on the basis of parties involved the electronic transaction can be
classified into the following four categories:
Different models/parts of e-business are:
1) Business to Business (B2B)
2) Business to Consumer (B2C)
3) Intra- Firm Business
4) Consumer to Consumer (C2C)
1. Business to Business (B2B) Here, both the parties involved in e-commerce transactions
are business firms. So, it is called Business to Business (B2B) commerce. It is the exchange
of product, services or information between businesses firms with the help of internet.
Around 80% of e commerce transactions are of this type.
Examples - B2B transactions:
a. Placing order with suppliers
b. Transactions between business firms like trade negotiations.
c. Transfer of goods from one branch to another
d. Making payments to suppliers
e. Receiving and sending documents like purchase orders or invoices.
2. Business to Consumer (B2C) E-commerce transactions taking place between business
firms and customers are called Business to Customers (B2C) commerce.B2C involves online
selling, online advertisement, online payment, online compliant registration, after sales
services through online etc.B2C commerce permits conduct of these activities at a much
lower cost but high speed.B2C commerce enables a business to be in touch with its customers
24 hours.

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Examples - B2C transactions:
a. Order placed by consumer through online
b. Electronic payment made by consumers
c. Register complaints through online
d. Provide customer support through internet.
3. Intra- Firm Commerce: This refers to transactions between the parties or persons who are
the part of one firm only. These transactions within the firm that it is called intrafirm.
Generally, a firm has to deal with its suppliers, customers, employees, etc. These are called
intra- B- Commerce interactions.
Example – If marketing management wants to make some changes in the design of the
product on the request of a particular customer, then they can immediately do so by
contacting production department through Intra B- Commerce transactions without any delay.
4. Consumer to Consumer (C2C) It involves transactions between customers. There are
many sites offering free classifieds, auctions forums where individuals can buy and sell
products and services. C2C commerce provides a market for dealing in goods for which there
is no established market.
Examples
a. Selling of used books or cars.
b. Selling antique items
c. a vehicle owner in a traffic jam can alert others via message on radio (you must have heard
traffic alerts on FM) about the traffic situation of the area he is stuck in
d. an aggrieved customer can share his experience with a product/service/ vendor and warn
others by writing just a message and making it known to the entire group.
e-business vs e-Commerce
e-business is a wider term and includes e-commerce. As commerce is one of the branches or
one of the activities of business, similarly e-commerce is one branch of e-business.

Benefits/Advantages of E-business
Advantages of e-commerce over traditional commerce are the following:
1. Provide global market for both buyers and sellers: E– Business provides global market
for both buyers and sellers. Buyers can select his needed goods from anywhere in the world
with the help of internet. In e- business the boundaries of sellers’ market is not defined by
geography but by the coverage of computer network, it is worldwide.

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2. Speed: Through e-business information can be exchanged, buying and selling etc can be
done just with the click of a mouse. This type of sale is more suitable in case of product like
software, movies, music etc.
3. Convenience: E-business offers the advantage of accessing anything, anywhere, anytime.
4. Easy to form and lower investment requirements: Unlike physical stores E-business is
relatively easy to start. There is no need to construct building, keep stock, decorate shop etc.
5. Reduced cost of purchase: In e-business a customer can order his goods from his house
itself with the help of internet. There is no need to wander here and there in search of a
product. This will save his time, money and energy.
6. Reduced Selling and Marketing cost: In e-business selling and marketing costs are much
less as compared to traditional commerce. It can run with very little advertisement cost, staff
cost, show room cost etc.
7. Less effort for sale: E-store will provide all details with images about the available
products. So, the customer gets a detailed idea about products. So, there is no need for the
sales executive to explain about the product to each visitor. It greatly saves time consumed
per transaction.
8. Lower advertisement cost: Internet advertisement is cheaper as compared to other audio-
visual medias like radio, TV, Newspaper etc.
9. Equal chance for all E-commerce: enables small and medium sized business firm to set
up their business to reach the global market. It is usually accessible only for multinational
companies.
10.Secure and Safe operations: Usually e-commerce transactions takes place directly with
the help of internet, there is no role for middlemen. The use of password maintains privacy,
safety and security of transactions.
11.Enable flexible working practices: It enables people to work from home.
12.Paperless office work: Use of internet has significantly reduced dependence on paper
work. Granting permissions, approvals etc. can be done through online.

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