E – BUSINESS AND CYBER LAW

                    

Module-1

E-business concepts: Definition- e-business v/s e-commerce, transformation of business structure-Trends- E-business models (an overview) - E-business design: knowledge building, capacity evaluation, design steps

E-business

E-business (electronic business) is the conducting of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners. It allows companies to link their internal and external process more effectively and efficiently.

Definition

            According to Kenneth “E-business refers primarily to the digital enabling of transactions and processes within a firm, involving information systems under the control of firm.”

Benefits of e-business                                                Challenges of e-business

Ø  Highly accessible                                        * Protecting consumers is risky

Ø   Increased customer loyalty                        * Leveraging existing

Ø  Improved information content                    * Malpractices through internet

Ø  Increased convenience                                * Increasing liability

Ø  Increased global reach                                            * Providing security is expensive

Ø  Decreased cost                                            * Adhering to taxation rules

E-business models

An e-business model is an approach to conducting electronic business on the internet. E-business transactions take place between two major entities – businesses and consumers. All e-business activities happen within the framework f two types of business relationship:

(1)   The exchange of products & services between businesses (B2B)

(2)   The exchange of products & services between consumers (B2C)

E-business models includes Business to Business model, Business to Consumer model, Consumer to Consumer model, Consumer to Business model.

Business to Business model (B2B)

                                    Business to business (B2B) applies to businesses buying from and selling to each other over internet. E-market places represent a new wave in B2B model. E-market places are interactive business communities providing a central market where multiple buyers and sellers can engage in e-business activities. Their primary goal is to increase market efficiency by tightening and automating the relationship between buyers and sellers.

Business to Consumer model(B2C)

            Business to consumer (B2C) applies to any business that sells its products or services to consumers over internet. B2C e-business models include e-shops and e-malls. E-shop/e-store/e-retailer is a version of retail store where customers can shop at any hour of the day without leaving their home. E- Mall consists of a number of e-shops; it serves as a gateway through which a visitor can access other e-shops. An e-mall may be generalized depending on the products offered by the e-shops.

Consumer to Consumer model(C2C)

            Consumer to Consumer (C2C) applies to sites primarily offering goods & services to assist consumers interacting with each other over internet. eBay, the internet’s most successful C2C online auction website, links buyers and sellers for a small commission. C2C business models are consumer-driven and opportunities are available to satisfy most consumers’ needs.

Consumer to Business model(C2B)

            Consumer to business (C2B) applies to any business that sells its products or services to business over internet. The demand for C2B e-business will increase over the next few years due to customer’s desire for greater convenience and lower prices.

E-Commerce

            E-commerce is the process of trading goods and services using computer networks. It allows firms to establish a market presence or enhance an existing market position by providing a cheaper and more efficient distribution chain of their products and services.

E-Commerce models

            Depending on the parties involved in the transaction, e-commerce can be classified as:

Business -to - Business (B2B) model

                        The B2B model involves electronic transactions for ordering, purchasing, as well as other administrative tasks between businesses. Sometimes in the B2B model business may exist between virtual companies, neither of which may have any physical existence. In such cases, business is conducted only through the Internet. The advantages of the B2B model are:

1.      It can efficiently maintain the movement of the supply chain and the manufacturing and procuring processes.

2.      It can automate corporate processes to deliver the right products and services quickly and cost-effectively.

Business - to - Consumer (B2C) model

                        The B2C model involves transactions between business organizations and consumers. It applies to any business organization that sells its products or services to consumers over the Internet. These sites display product information in an online catalogue and store it in a database. The B2Cmodel also includes services online banking, travel services, and health information.

Business - to –government (B2G) model

                        The B2G is generally defined as commerce between companies and the public sector. It refers to the use of internet for public procurement, licensing procedures and other government related operations. This kind of e-commerce has two features:

a)      Public sector assumes a leading role in establishing a commerce

b)      Public sector has the greatest need for making its procurement system more effective.

Consumer- to- Consumer (C2C) model

                        The C2C model involves transaction between consumers. Here, a consumer sells directly to another consumer. eBay and www.bazee.com are common examples of online auction Web sites that provide a consumer to advertise and sell their products online to another consumer. However, it is essential that both the seller and the buyer must register with the auction site. While the seller needs to pay a fixed fee to the online auction house to sell their products, the buyer candid without paying any fee. The site brings the buyer and seller together to conduct deals

Consumer – to- Business (C2B) model

                        The C2B model involves a transaction that is conducted between a consumer and a business organization. It is similar to the B2C model, however, the difference is that in this case the consumer is the seller and the business organization is the buyer. In this kind of a transaction, the consumers decide the price of a particular product rather than the supplier. This category includes individuals who sell products and services to organizations

Government-to-Government (G2G) model

                        This model involves transactions between 2governments. For example, if the American government wants to by oil from the Arabian government, the transaction involved are categorized in the G2G model.

Government-to-Consumer (G2C) model

                        In this model, the government transacts with an individual consumer. For example, a government can enforce laws pertaining to tax payments on individual consumers over the Internet by using the G2C model.

Consumer-to-Government (C2G) model

                        In this model, an individual consumer interacts with the government. For example, a consumer can pay his income tax or house tax online. The transactions involved in this case are C2G transactions.

E-business v/s E-commerce

E-commerce	E-business
Involves monetary transactions	Besides monetary transactions it involves marketing, procurement of raw materials, customer education etc...
It is a wider term	It is a broader term
It concerned with sale only	It concerned not only in sale but also in retaining customers
It is a process of covering external partners	It is a process of covering internal partners
It is online selling component	It is the integration of company’s activities
It always operates on internet	It always operates on intranet
It is used for small and large transactions	It is used mainly for bulky transactions

Transformation of traditional business to e-business

                                    Making the decision to change from traditional business methods to e- business is a big step, but one that can lead to tremendous business growth if handled properly. There are some essential steps that any business must take in the process of evolving to be an e-business:

1)      Analyze and codify the core values that must represent your brand, services and product.

2)      Identify the key metrics against which these are measures to provide consistent and real data.

3)      Identify and document, the known shortfalls in existing channel integration and cross channel support.

4)      Identify new channel opportunities and integrate those to the existing channel gaps.

5)      Analyze and document the application sets and identifies the challenges exists today.

6)      Identify and document the key deliverables for service access, projection, support and integration.

7)      Identify top level changes required to existing process to align channels and processes.

8)      Establish and agree the key business changes that would benefitable and realistic in time.

9)      Plan to change the existing traditional channels to new efficient channels

10)  Design a transition plan to provide channel choice & encourage consumer to use new channels.

11)  Appoint a top manager at board level having an authority to responsible for the process of integration.

12)  Integrate the internal experts and driven individuals to support the project

13)  Rely on people as internal drivers of change rather than external consultants.

14)  Clearly define the process and outputs from the project.

15)  Define manageable, logical, realistic, cumulative, sequenced outcomes.

16)  Inform and educate all personal as the project proceeds.

E-business design

E-business design is designing or creating an online trading through electronic media. E–business design is one of the important factors which help an organization for marketing their product or service through internet. For changing a company’s business model into an e-business model, a pool strategy has to be formulated. It essentially needs to have three components: - Knowledge building, Capacity evaluation and E-business design.

Knowledge building:

                        Knowledge building refers to understanding the customers, their needs, wants and aims. It is essential if a business is to align its processes and services to build real customer relationships. It includes intimate and tacit knowledge such as that of key account managers and distant or analytic knowledge including database information about sales, web- behaviour or other analytical piece of data.

            The ultimate aim of knowledge building is to build up a strong body about customers and to manage a good customer relationship now and over the longer term. Customer knowledge should be determining what to offer, when to offer it and how much for. In the long term the company has to design new products, offer new services, compete in new markets, but even in the short term then processes are also continues after considering the needs and wants of consumers. Thus knowledge building provides know more about customers and delivering according to their needs.

Capacity evaluation:

                        Capacity evaluation includes a company evaluating itself to see whether it is able to serve its customers with the existing infrastructure. After collecting all the information and analyzing it, the organization embarks on designing the e-business models best suited for its processes.

E-business design:

                        The business world has changed over the last few decades, and changed drastically. Competition today is no longer between Product and rival Product. The real competition, the struggle for superiority is between the traditional e-business models versus the e-business models. In order to survive and succeed, the companies need to create innovative business designs and effectively deliver value to clients and consumers. Shifts in the corporate business environment and complete changes of direction are making businesses rethink the way they do business. Thus the most innovative technique they adopted is e- business. E-business is done only after maintaining a good e-business design. E-business design provides more functions and opportunities to e-business trading.

Steps to build e-business design

                        There are many advantages to opening an e-business. An e-business eliminates the need for a storefront and allows the owner to have flexible hours. It can also expand markets for existing business and for newly starting business. In addition owning an e-business is also advantage for some people who have physical challenges and cannot work in a normal environment. The main steps for e-business design are:

1. Decide on a business

                        The first step in e-business design is to decide a business. It means first we decided to start a business. It can be either a product, service or a combination of the two. There are so many sources to getting more idea about to start a business. After deciding the type of business or if we have already a business and wants to do business through electronic media i.e. E-business, it is best to do some preliminary research to determine the need for the product or service by asking three questions:

·         What is my online competition?

·         If there is no competition, why not?

·         Is there a market for my product or service through online?

2. Create a business plan

                        If there is launching a traditional business or an E-business, then need a business plan. A business plan identifies the business, its goals and objectives. Too often, people decide to eliminate this crucial step in the business start up stage. Creating a business plan allows the businessman to think about present and future needs.

3. Select a domain name

                        The domain name will be the URL (Uniform Resource Locator) which is the web address or location on the internet for the website. Selecting a domain name is very important. Select a name that closely identifies your product or service and one that will easy for customers to remember. There are many websites that offer free searches for domain names. Domain names are generally purchased for one year and then renewed annually. However some companies now have different options; evaluate each company’s options before making decision. When the renewal notice comes due the businessman must promptly pay or someone can buy that domain name. Some entrepreneurs make a business of purchase domain name and reselling them when they are not renewed. Once lost the domain name may or may not be able to acquire the name again.

4. Select Meta tags

                        Meta-tags are the keywords, title, and description you select to describe your website so that search engines can direct people to your Website. Once a URL is submitted to a search engine, the search engine will “crawl” the site with a type of scanning software known as “spider”. The spiders read the information contained in the Meta tags, along with the content of the web pages themselves, and uses that information to determine a site’s position with search results. Once the site has been “crawled” and catalogued by search engines, it becomes visible in search results.

5. Design a Web site

                        For creating or designing a website there are three options available: design a website by the businessman, hire a web designer or utilize the “one stop” method where the Web host designs the Web page from templates. If the businessman chooses to design the Web site by himself, take the advantage of online tutorials and classes art universities.

                        If the budget allows, hiring a Web designer may offer more options in design and get the Web site functioning. Having a knowledgeable Web designer work will eliminate the learning curve that most do-it experience. Some Web designers also offer more expanded services that include launching the site and securing the domain name. It is wise to shop around for a designer and view his work online before signing a contract for services.

 6. Select a Web host

                        Select a Web host (Internet service provider) to host it. It can be either own or operate the Web server. There is an option that requires significant financial investment and a high – level technical proficiency, or you can use a “hosting service”, which is essentially renting space on a server maintained by someone else. Hosting services provide server space and some basic programming features for a monthly fee. Before choosing a Web host considers:

v  Does the host have experience with my type of Website?

v  Does the server have adequate bandwidth to handle my storefront?

v  Are the technicians knowledgeable?

v  Is the Web host reliable?

v  Have other E-businesses had problems with the Web host?

v  What features will need and will the host be able to provide them?

7. Decide how you will accept orders

                        Taking customers orders is a critical activity for any business. Customer satisfaction which make more interest among customers to order again and again. Company’s duty to make ordering procedures as easy as possible. If it’s too difficult to order from you, customers will simply go elsewhere. Therefore customer satisfaction is important. In selecting an ordering and payment method for the website, mainly there are two options:

a) Requires little assistance from Web store owner

                                    Customer can browse the Web site placing items in the shopping cart until they are ready to check out. At check out time, the order is totalled. This program can be provided by your Web host or you can purchase one. When choosing a Web host ask if shopping cart is an option and if the shopping cart system has the option of adding, removing, modifying, clearing, saving and checking out to make transactions simple for the customer.

b) Requires direct involvement from the Web store owner

                                    The Web store owner agrees to take credit card payments. Depending on the setup, the Web site may instruct customers to e-mail, call, or fax their orders with a credit card for payment.

8. Provide Web security

            To ensure that the customer’s transactions are safe and secure, it will need to provide security. Although, it comes with a price, it may put dollars in the pocket of businessman in long run. Consider contracting with a credit card verification company. VeriSign® Security Service is one popular credit card verification company, but others can be found by doing a search for “credit card verification companies”

9. Customer communication system

            A Web store will need to communicate with its customers. So create a page providing contact information. That information should include a telephone number, e-mail, physical address, and mailing address. Once you have received an order, you will need to acknowledge receipt and send notification of shipment to the customer. Tracking customer orders is also a valued option.

10. Developing a marketing strategy for the E-business

            The final step in building E-business is to develop a marketing strategy for the e-business. Submit the URL to the big search engines: Google, Yahoo! MSN, Alta Vista, Excite, WebCrawler, Lycos and HotBot. After signing up with search engines periodically, check to make sure that the site comes up when searched by using keywords. Keep in mind that it takes a month or longer after signing up for your site to appear. However, sometimes dead links develop and your site disappears, so check periodically to make sure that the site is available.

            Cross promotion is another marketing tool that can use. Link the sites to other site to get more visibility. Many sites offer reciprocal linking; if you link their site, they will link to yours. This technique is most effective when the sites exchange links with have some relationship to the site, either as a recommendation or as a similar type site.

Conventional advertising is another marketing tool. Advertise the website on the radio, television, business cards, brochures, stationery, fax cover sheets, invoices, quotes etc...