The framework captures several business, human and time dimensions. Governments across the world are using the Internet to augment their communication systems with their citizens. The information was market controlled, customers were ill informed, and the exchanges were market initiated. Form a critical mass of the population with access to the Internet and disposable income enabling widespread use of credit cards, ii. Airlines and railways across the world are selling tickets online, some are even offering discounts to direct customers and cutting commissions to travel agents. Since then it has expanded into broad range of product lines. Chapter 1 Introduction to Business Combinations and the Conceptual Framework 1-3 !! It also includes the strategic adaptations of business practices integrating the use of technology. Get information about the manufactures of the products and brands around the world, ii. M-business facilitates interaction among business stakeholders with the World Wide Web, irrespective of location-specific context. M-commerce finds enormous applications in various businesses, especially the following: Mobile banking and stock investments carried out over wireless devices, Placing orders and making payments over wireless devices for retail purchase, Single wireless device for getting account status, changing services, and making payment. ! While some use e-commerce and e-business Traditionally, firms used to push advertisements to the customers, generally as a mass communication tool. As a result, businesses are increasingly adopting e-manufacturing using real-time information on customer needs and preferences and productive capacity across the entire supply-chain so as to speedily deliver customized products directly to the customers rather than huge volumes of mass production to fulfil anticipated demands. 0000004581 00000 n The Indian BPO business began with basic data entry and transcription of medical records. A business enterprise generally adopts a uniform strategy for a given market segment. These include activities, such as general accounting, transaction management (accounts receivables and payables management), corporate finance (i.e., treasury and risk management, and tax management); compliance management and statutory reporting, etc. Business applications of digital technology have given rise to an era of information asymmetry where customers are much better informed, information is controlled by customers, and customers also initiate market exchanges. 7 Asia-Pacific e-commerce revenues are projected to increase from $76.8 billion at year-end of 2001 to $338.5 billion by the end of 2004. Suggested Citation: Suggested Citation Majmudar, Utkarsh and Prabhu, Ganesh, Electronic Commerce Business Models: A Conceptual Framework (July 25, 2000). ii. Computer Numerical Control (CNC) machines, Automated Storage and Retrieval Systems (ASRS), and Flexible Manufacturing Systems (FMS). Legal institutions that would enforce the legal framework (laws and regulations) and protect consumers and businesses from fraud, among others. This article defines the meaning of conceptual framework and lists the steps on how to prepare it. External audiences include stockholders, customers, the general public, etc., whereas both suppliers and employees constitute a firm’s internal audiences. Carry out comparison of product features, quality, prices, etc., from a variety of sources, iii. It is arrived at by subtracting lifetime costs such as costs of customer acquisition, operating expenses, customer service, etc. It may be in the form of either online delivery or physical delivery. 0000001722 00000 n Copyright 10. Besides, banks compete with each other to offer a variety of value-added services to their customers, such as checking their balances, account statements, fund transfers, bill payment, transactions in the stock and commodity markets, customer service, etc. ` kR�� Policy Framework for Global E-business: Essay on the Introduction to Global E-Business, Essay on the Conceptual Framework of Global E-Business, Essay on the Prerequisites for Effective Global E-Business Transactions, Essay on Global E-Enabled Business Process Transformations and Challenges, Essay on Global E-Business Technology and Environment, Essay on the Alternative Global E-Business Strategies, Essay on the Policy Framework for Global E-business. E-business integrates traditional business practices and information systems with the world-wide reach of the web and connects its various stakeholders. Commerce is a basic economic activity involving trading or the buying and selling of goods. Various discussion groups and consumer forums share with each other their experiences over the net. 0 However, in practice, the terms ‘electronic’ and ‘Internet’ commerce are often used interchangeably. Viability of carrying out business transactions differs across firms, depending upon their nature of business and resource availability. 19.2, consists of basic 4Ps of marketing, i.e., product, price, place, and promotion. Therefore, a specific trade policy is required for international trade electronically. 19.1, reveals that it involves electronic exchange of information or ‘digital content’ between two or more parties, i.e., the business enterprise and the buyer or the supplier. 0000003880 00000 n This not only increases transparency in prices but also pulls down the prices. ICT is employed to collect information at the point of sales and to transmit it instantaneously from the retailer to the manufacturer. In technical terms, there is hardly any difference between the Internet, the extranet, and the intranet. A corporate Intranet so that orders are processed promptly and efficiently, iii. Although most insurance companies are reluctant to alienate their existing massive agent structure, they are simultaneously making attractive online offers for direct insurance. 19.11. The World Wide Web or the web is relatively a new addition to the Internet. Generally each ministry, government departments and agencies thereof do have separate portals that not only host relevant information but also provide interactive platforms. Gradually it moved up the ladder to rules-set based processing where agents made judgments based on rules set by the customer, for instance, upgrading travellers from economy to business class. vi. Information search and retrieval mechanisms: Although the terms ‘e-commerce’ and ‘e-business’ are often used interchangeably, these are two distinct concepts. Integration of ICT finds wide applications in a range of business activities, including the following: In traditional auctions, buyers and sellers gather at an agreed place, often the auction house, at a pre-determined time. 19.1, reveals that it involves electronic exchange of information or ‘digital content’ between two or more parties, i.e., the business enterprise and the buyer or the supplier. It greatly adds to transparency in government processes and curbs irregularities and corrupt practices, leading to reduced transaction costs. i. ii. Further up the ladder, offshore IT-enabled services (ITeS) included trouble-shooting by BPO agents, such as the discretion to enhance credit card limits. Over recent years, the scope of IT- enabled services has expanded considerably to include the increasingly complex processes involving rule-based decision-making and even research services requiring informed individual judgment. The Economist Intelligence Unit annually publishes e-readiness ranking for the world’s 70 largest economies based on nearly 100 separate quantitative and qualitative criteria to assess countries’ technology infrastructure, their general business environment, the degree to which e-business is adopted by consumers and companies, social, cultural and legal environments and government policy and vision. A number of e-marketing firms, such as Indiatimes(dot)com, allow the customers to set their own price. Learn more. eBay permits sellers to list items for sale, buyers to bid on the items of their interest, and all eBay users to browse through listed items on easy to use online services. The ability to transmit information packets between widely dispersed computer networks was perceived as a means of lowering the computing costs. Integration of digital technology into the business processes has considerably transformed the traditional ways of doing business. However, in the virtual market space, customers can scan information on the Internet and make comparisons to suit their individual requirements. The term ‘Internet economy’ comprises of physical ICT infrastructure, business infrastructure, and commerce. Besides, the Internet is a more efficient channel in terms of effort, time, and money spent compared to its traditional counterparts. Telephone directories, the so-called ‘white pages’ containing private telephone numbers and the ‘yellow pages’ for businesses have widely been used to locate a person or a company. In an e-enabled system the payments flow from end customers to the seller directly takes place electronically unlike through market intermediaries in a traditional system. Should together form a critical mass of companies (especially within supply chains) with Internet access and the capability to place and take orders over the Internet. It uses Internet standards for electronic communication within the organization, separating these websites from the rest of the world by firewalls and other security measures. It includes use of electronic data and its applications for conceptualization, planning, pricing, and distribution and promotion of goods and services so as to create exchanges to satisfy customer needs. Besides, it is easy to use and it involves extremely low transaction costs. ‘Brick and mortar’ firms generate their total revenue from traditional means of sale whereas the website is only used to provide information. A research framework is a clear illustration of the structure of a research project plan. Until customers invite marketers to participate in their exchange processes, marketers have to wait. However, the breakthroughs in ICT have made it possible to transmit these products through electronic networks, which are not subject to customs duties. In other words, the conceptual framework is used to arrive at a hypothesis. India witnessed the world’s highest growth of 37.5 per cent—from US$8.5 billion in 2000 to US$41.7 billion—in 2005 among the top 30 major exporters of ICT-enabled services, as depicted in Fig. The 1998 declaration also included a so-called moratorium stating that ‘members will continue their current practice of not imposing customs tariffs on electronic transmissions’. Application of e-business between government agencies with businesses may be categorized under government to business (G2B) or business to government (B2G) e-business. Introduction to Global E-Business 2. The use of the Internet has empowered buyers significantly. Internet has made mass customization possible for different users so as to create individualized web pages, products, and services. However, in the electronic market space, sellers often attract buyers by way of creating interesting websites, offering competitive prices, and superior purchasing experience so as to induce purchase decisions. This paper proposes a conceptual framework to assess strategic IT investments for e-business. Moreover, electronic directories are often user-friendly. 0000020497 00000 n The rapid expansion in scope of BPOs has been accompanied by an equally rapid adoption across a range of vertical industries. The conceptual framework that facilitates readers to understand e-enabled business systems vis-a-vis traditional marketing systems has been examined. Thus, e-business leads to transformation of an organization’s business processes so as to deliver additional customer value through application of technology and processes. Technology and Environment 6. The process of eliminating the middlemen from the exchange processes is known as ‘disintermediation’. Advent of ICT has facilitated businesses to gather information about individual customers’ tastes and preferences, their buying behaviour and customized marketing strategy to cater to each of the customers. Advent of the Internet and world-wide web offers cost-effective alternative to proprietary and value-added networks, ii. Items generally transacted under eBay include apparel and accessories, books and magazines, computers and peripherals, fitness and sports, jewellery and watches, music and instruments, stamps, coins and hobbies, consumer electronics, mobiles and accessories, movies and videos, etc. conceptual framework recognition and measurement in all its concepts of assumptions, principles and constraints, related to the accounting of transactions underlying E- commerce business, from the viewpoint of the Jordanian external auditors. Earlier, the marketers used to initiate the marketing activities, but the breakthroughs in ICT have metamorphosed the marketing system, enabling customers to initiate marketing activities. E-governance has significantly contributed to transparency and efficiency in public administration. Increase in availability of information online on the public domain augments the chances of its copying by the competitors who make its use for their own benefits. 0000005365 00000 n 0000001430 00000 n Major reasons for companies making online presence include: iv. This is the traditional business model wherein websites are used only as a company brochure. A simplified example is added. The traditional ‘hierarchical organizational structures’ are transforming into ‘network organizational structures’ so as to take benefit of emerging e-business opportunities and meet the potential challenges. In view of the growing significance of digital technology, especially as a tool to achieve and sustain competitiveness, a thorough conceptual understanding of e-business becomes crucial to managing global business effectively. Firms using ‘brick and click’ model need to be cautious that their online sales do not cannibalize existing sales through traditional marketing channels. It has transformed the markets from ‘physical marketplace’ to ‘virtual market-space’ leading to basic alteration in the consumer-decision process. The traditional marketing strategy requires dividing the heterogeneous universe of customers into homogeneous subgroups, known as market segmentation, who would respond more or less similarly to a given marketing strategy. In the initial phases of development of e-commerce, proprietary networks were often used under an EDI framework. The conceptual framework provided would help the management authorities of the business organizations a lot to make the captured data ready and fit for use by the AI algorithms. The banking industry is a pioneer in using EDI for intra-bank transfer of funds using the SWIFT network. The US was the top exporter of IT-enabled services during 2005 with an export of US$184.7 billion followed by UK (US$132.8 billion), Germany (US$73.8 billion), Japan (US$52.5 billion), and France (US$42.0 billion), whereas Canada exported for US$28 billion, Switzerland for US$28.7 billion, Singapore for 27 billion, and China for US$26.6 billion. eBay’s pioneered online person-to-person trading by developing a web-based community wherein the buyers and sellers transact personal items (Fig. Basic process-flow and linking together of diverse business functions is termed as a ‘business model’. Delivery of news, stocks reports, sports figures, such as cricket or football scores, entertainment, such as jokes, ring-tones, astrological predictions, etc. Collective participation of multiple buyers and sellers in a single e-market reveals market price information and transaction processing to all the participants. 0000002460 00000 n Norway has the highest level of penetration rate of 88 per cent of the population, followed by the Netherlands (87.8%), Iceland (85.4%), New Zealand (777%), and Sweden (773%), whereas the US has 71.7 per cent, Japan 68.7 per cent, UK 66.4 per cent, Canada 65.9 per cent, France 54.7 per cent, and Singapore 53.2 per cent of penetration rate. %%EOF Thus, in simple terms, e-business refers to integration of ICT with business processes. B2B e-commerce adds to the efficiency of marketing transactions. However, the hype of dotcoms was short-lived and bust in 2000. It is an Internet-based network between a business enterprise and its suppliers, distributors, and business partners which is not open to the general public. The penetration of B2C e-business is of high significance for developing countries as the ban on customs duty is applicable to digitized products which mostly fall in this category. In addition to online buying and selling, e-business also involves collaborating with a firm’s business partners and servicing its customers with the use of ICT over the Internet. The breakthroughs in information and communication technology (ICT), especially the advent of the Internet and the World Wide Web, have significantly changed the way people communicate and manage their daily lives across the world. English is the highest used language on the web^’ with 30.1 per cent of total users, followed by Chinese (14.7%), Spanish (9.0%), Japanese (6.9%), French (5.1%), German (4.9%), Portuguese (4.0%), Arabic (3.7%), Korean (2.7%), and Italian (2.6%) whereas other languages account for 16.3 per cent. A large segment of customers is resistant to carrying out business transactions over the Internet. 76 0 obj<> endobj 79 0 obj<>stream Today, the Internet is extensively used by businesses to communicate with their external and internal audiences. Firms such as Avon, Compaq, etc. The use of ICT is gaining significance as a strategic tool to increase productivity, reduce costs, enable mass customization, and encourage greater customer participation. On the other hand, the buyer also has to link to an electronic network, search and locate content on network, retrieve information from network, display information, place a purchase order, and link to an electronic payment system. vii. Business to business (B-to-B or B2B) transactions account for about 80 per cent of total electronic transactions and are predicted to move faster compared to the B-to-C segment. 0000026644 00000 n Michael Dell, founder of Dell Computers, was among the first to adopt innovative business processes that integrated digital technology with marketing, as illustrated in Exhibit 19.2. Outsourcing of functions in the process of e-commerce, such as web-hosting, security, and customer-care solutions (i.e., outsourcing providers, such as e-Share, Net-Sales, etc. Hypermedia advantage may be measured by various methods (Exhibit 19.3), such as hit count, page view, click through, unique visitors, reach, etc. The uses of electronic surveys for business research have increased tremendously in the last decade. It is used to make conceptual distinctions and organize ideas. However, the firm has very efficient supply chain management so as to ship PCs on local or regional basis. 0000003928 00000 n Such systems are replacing the earlier EDI systems. Auction sites generally serve as a forum of buying and selling and charge a commission on sales made. Electronic linking of the entire supply-chain has contributed not only to speedy flow of information but also to boost the overall efficiency of business processes. Intranets provide platforms for communications within organizations whereas extranet links a business organization with its various stakeholders. Moreover, since integration of ICT with business operations provides a level playing field, it enables small and medium enterprises (SMEs) to compete with large and capital-based businesses. Disclaimer 9. A conceptual framework is a system of concepts, assumptions, expectations, beliefs, and theories that supports and informs research (Miles & Huberman, 1994; Robson, 2011).
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