1. INTRODUCTION
Organisations cannot compete solely on past record of success in today’s rapidly changing business environment that is characterised by boundary blurring, disintermediation and hyper competition. To move ahead of these rivals they need to seek innovation constantly at every level of activities. Their ability to generate successful business models and strategies as well as new products, will be the key for their survival in new economy. The first step of such innovation is internet, which made the traditional commerce to evolve in to e-business trend.
IBM as defined the e-business as the transformation of key business process to the use of internet technologies (Schneider and Perry 2001). This essay explains the how the e-commerce has brought a great change in the commerce with the relevance to use of internet. First half of essay clearly states the emergence of e-commerce and latter part criticizes the various business models.
2. ABOUT E-COMMERCE
When talking about e-commerce, many people use terms like e-commerce, e-business, i-commerce etc… Though literal interpretation of these terms denotes particular domains of activity and little rigour is applied to their application. Generally speaking e-commerce refers to the buying and selling of information, products and services via computer networks today and in future may be using any myriad of networks that make up internet (Lawrence & Corbitt 1998).
2.1. HISTORY OF E-COMMERCE
Over thousands of years, people have engaged in commerce with one another, they have adopted various methods which includes the inventions like steam engines, printing press and telephones which brought a major changes in the commerce activity. After several decades the firms slowly developed various electronic communication tools to conduct different kinds of business transaction. EFT (Electronic Fund Transfer, which was used by banks for electronic transmission of account exchange information through private communication) and EDI (Electronic Data Interchange, which is used in between business for transmitting computer readable data in standard format) are some stepping stones for the development.
Later, innovation of E-Mail has encouraged commerce activities to become digital commerce phenomenon in nineties. Also many institutions and government departments started insisting the people in use of the new technology. This paradigm shift drives new practices in financial service industries too. Many financial institutions desired to build new computer systems across an open platform to handle secure digital transaction. “The way of doing business has dramatically changed by the use of information technology- old ways of dealing with customers, suppliers and employees have been destroyed and replaced by radical new ways….” Says Peter Schumpeter, a Harvard Economist, (Lawrence 1998). He calls this change as “Creative Destruction”.
2.2. E-COMMERCE – A BRIEF SUMMARY
As generations passed by, the marketers faced many challenges as well as opportunities. Such opportunities brought the innovations like e-commerce. Following table clearly illustrates the activities of e-commerce,
Perspective Description
Communication To deliver information, product/services and payments over communication network.
Business To automate business transactions and work flows Services To cut service cost while improving quality of goods and elevate the speed of service delivery Online To provide the capability of buying and selling products and information over internet and other online services (Kalakota & Whinston 1997)
3. ABOUT INTERNET
The existence of internet has been a boon to bring the traditional commerce into the digital world. The internet is one that brings people together from every country in this world. It reduces the distance between the people in many ways. Internet, in simpler terms can be explained as the large system of interconnected computer networks that spam the globe (Schneider & Perry 2001). Nowadays internet has offered various tools like e-mail, messenger, news, games and stimulators for entertainment.
The opening of internet to the business activity helped to increase the internet growth drastically. however there was another parallel development that is commercialisation of the internet which let to the development of World Wide Web. World Wide Web (WWW) is subset of the computer on the internet that are connected to each other in a specific way that makes these computers easily accessible to each other the web is more way of mincing about and organising information storage and retrieval that its technology.
4. E-BUSINESS
No matter what business model the fledging electronic business adopts, it is possible to adopt essential disciplines of successful management to participate in online business on internet. the key strategies that are put forward as being essential for establishing a successful presence on the internet are planning, controlling, monitoring, adjusting and managing quality. Each of these strategies is dealt within the context of providing advice for business wishing to maximize the cyber potential.
The methods of building a commercial presence on the internet includes following models:
· Fundamental Models
1. Online yellow pages model
2. Subcription model
3. Advertising Model
4. Auction Model or Reverse Auction model
5. Affiliation Model
6. Portal Model
· Buy or sell Fulfilment model
1. Virtual Store front model
2. E-procurement model
· E-Market place Model
Following figure demonstrates the various models that are employed to e-business environment, (Lawrence and Corbitt 1998)
4.1. ONLINE YELLOW PAGES
This is one of the fundamental models. Businesses using online yellow pages create a hyperlink with each item on the menu pointing towards related resources and providing further information on particular topic. These menus can be created on gopher server, bulletin boards, the web and wide area information services. A higher profile for business is being setup by this model. This model also includes search engines that enables the customers or users to access the business information by just entering the name or business type or any phrase related. Even site location can be identified by downloading the map or the photograph of the industry. This model also provides the users the information such as special offers, methods of payment and other accessories. www.tatayellowpages.com, is an example for this model, where we can access the information regarding major INDIAN companies’ profiles, their addresses, web addresses etc.
4.2. SUBSCRIPTION WEBSITE
The main theme of subscription model has been borrowed from publishing industries. Using this model customer can easily subscribe for magazines in online version. This model has becoming more popular in business where products can be delivered online. This also facilitates the customers to download the latest version of software, for an example updating the Norton antivirus software can be very useful for the users to protect their system from the worms. The website www.cnet.com helps to download free trail software, games and other tools. The website like www.123greetings.com guides the users to send greetings, gifts and other related services to the distant user easily and economically. The user can even subscribe in news website so they can get the complete news update that’s happening in this world. An example for news network is www.bbcworld.co.uk. Some entertainment website also provides pornographic materials after verifying the age details and as per the request of the users.
4.3. ADVERTISING MODEL
Mostly the website with search engines uses the advertisement models. They offer advertising space on their web pages to obtain revenue. They use targeted advertising, that is when customer enters into www.Google.com and searches for the second hand cars, he can trace various links related to it. Also some banner appear on search page result like “fiat car-special offers” which directly targets to company’s home page. This model has been more attracted by many business entrepreneurs. Obviously the website has been able to attract large number of people. Best example for advertising website is www.directoffers.com which provides the users the special offers of the products and some deliverable goods and even customers are able to choose the product of their variety and price. The advertisement model is appropriate primarily for the service oriented, online business. However, a site could use business products in the online environment. Cross marketing, the sale of complementary goods in conjunction with another good is the major exemption. For example, swimming goggles manufacturer can advertise from the suppliers of swim suits. The cyber business offers valid opportunity for the advertisers to convey their messages to an appropriate demographic; it may have chance in attracting advertisers to contribute to the success of the new business (Lawrence & Perry 2001).
4.4 AUCTION AND REVERSE AUCTION MODEL
Originally online auctions where used as a way for computer manufacturers to offload surplus materials quickly. In USA the companies like BEANIE BABIES propelled the growth of online auctions using auction model. The auction model depicts a website that conduct online auction for the seller possibly individuals or companies. www.ebay.com and www.sold.com.au are some popular auction sites. The reverse auction model is the one where bidder set the price for the item. www.price.com is the best example for such model. Other popular sites www.westbid.com .au and www.respond.com (Lawrence & Perry 2001).
4.5 AFFILIATION MODEL
These models, in simpler term can be explained as pay for performance model. The website like www.amazon.com encourages the other website owners to sign up to sell their price booklet inventory. Once approved the affiliate is send an email with instruction how to setup link or banner advertisement .these affiliate do not sell but merely direct to the homepage of the online store, which takes order and pay. www.pricewatercoopers.com is an online books store, which helps the users to select and buy their books online, however some money may be charged for postage.
4.6 PORTAL MODEL
In portal model, the website is designed to offer a variety of internet services. Some single convenient location and to drive high volume traffic. Many portal offer many free services such as search engines, news, and reference to directories or maps, e- mails, chat rooms and shopping malls. www.msn.com , www.altavista.com and www.yahoo.com are some examples. Some business to business portals offer services to the businesses rather than individuals tailoring to other resources to the company focus. The website www.retailtrade.net guides the customer to the retail suppliers and purchasers. in some portals, users are allowed to personalize their portal. My.Netscape is a good example of popular personalized portals.
4.7 VIRTUAL STOREFRONT MODEL
This model is also known as direct or sells site model which provides full information and transaction services designed for marketing business services and products thro online purchasing and customer support. this model is typically for business customers focus. The payment is made thro direct debit or credit cards. in cyber space such transaction are increasingly being conducted entirely online thro encrypted two data traffic within consumer and virtual store .in some cases like software and entertainment company helps the user to download software or music thro network. the website like www.shopfast.com and www.dell.com guides the customer for easy and quality purchase of computer peripherals.
4.8 E-PROCUREMENT MODEL
E-Procurement model also called as buy-side model enables to reduce indirect and internal operational cost by adopting electronic approach to the procurement. This can be achieved by digitalizing the catalogues which displays the products details and services offer by the company.
Raytheon Systems Company has employed this model and has reported to less US$ 3 for every purchase of goods worth US$ 100.
5. CONCLUSION
Each way of doing business has a role to play and that the road to competitive advantage, for many organizations, is in the integration of appropriate e-commerce technologies throughout the supply chain. As Bill Gates quoted “The rise of internet and increase in subscribers to online services is a fantastic thing… virtually agree that by the end of the decade the internet will be significant business channel”, the internet based commerce had become a significant channel for doing business. As the time goes, the technology also develops, so the business will also stick to the new technology rapidly. In future, e-business will be more faster, and reliable media.
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