Emerging Modes of Business

Any three differences are:

1. Ease of formation: Traditional business is difficult to set up, while e-business is simple and can be started with much less formality.
2. Physical presence: Traditional business requires physical presence of the parties and a real place of business, while e-business does not require physical presence.
3. Operating cost: Traditional business has high operating cost because of expenses on storage, production, marketing and distribution facilities, whereas e-business has lower operating cost because it relies more on networks and relationships.

Other differences from the chapter include direct contact with customers, faster response time, flatter organisational structure, and higher risk in e-business.

Two applications of e-business are:

1. e-Procurement: This means internet-based transactions between business firms. It includes reverse auctions and digital marketplaces where buyers and sellers trade online.
2. e-Delivery: This includes delivery of digital products like software, e-books, journals, music, videos, photographs, etc., directly to the user's computer. It also includes some consulting services provided electronically.

Other applications mentioned in the chapter are e-bidding/e-auction, e-communication/e-promotion, and e-trading.

The data storage and transmission risks in e-business are:

- Stored data can be stolen or modified by unauthorised persons for selfish motives or even for fun.
- Computer viruses may damage files, disrupt functioning, or even destroy the system.
- Data can be intercepted during transmission over the internet.
- To protect information, firms use anti-virus software and cryptography, which encrypts data into unreadable form called cyphertext.

So, the main risks are theft, alteration, virus attacks, hacking, and interception of information while it is being sent.

e-business and outsourcing are called the emerging modes of business because they represent new ways of doing business that have developed in recent years and are still evolving. They are not new business activities, but new methods of conducting business.

They are growing in importance because of both internal and external factors:

- Internal factors: Business firms want to improve efficiency, reduce costs, and strengthen their capabilities in creating utilities and delivering value.
- External factors: There are competitive pressures and ever-growing demands from consumers for better quality, lower prices, speedier deliveries, and better customer care.
- Emerging technology: The development of digitisation, internet networks, and information technology has made electronic business possible and efficient.
- Globalisation and outsourcing: Firms are increasingly operating in a global environment and finding it useful to contract out activities to specialised agencies.

Thus, e-business and outsourcing are important because they help firms become more efficient, competitive, flexible, and responsive to customers.

The steps involved in on-line trading are:

1. Registration: The buyer first registers with the online vendor by filling in a registration form and creating an account with a password.
2. Placing an order: The customer selects items and puts them into the shopping cart. After choosing what to buy, the customer checks out.
3. Payment mechanism: Payment can be made in several ways, such as:
- Cash on Delivery (CoD)
- Cheque
- Net-banking transfer through IMPS, NEFT or RTGS
- Credit card or debit card
- Digital cash
4. Delivery: After payment is confirmed, the goods are delivered. In the case of digital products like software, books or music, delivery can even happen online.

So, online trading follows the stages of registration, order placement, payment, and delivery.