Emerging Modes of Business - Class 11 Business Studies - Chapter 5 - Notes, NCERT Solutions & Extra Questions
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Extra Questions - Emerging Modes of Business | NCERT | Business Studies | Class 11
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State any three differences between e-business and traditional business.
Sure, here are three differences between e-business and traditional business:
-
Presence:
- E-business operates online, accessible via the internet.
- Traditional business operates from physical locations like stores or offices.
-
Communication:
- E-business uses digital communication methods (emails, online chats).
- Traditional business relies on face-to-face interactions, phone calls, and physical mail.
-
Cost:
- E-business generally has lower operational costs (less need for physical space, inventory management is streamlined).
- Traditional business often incurs higher costs (rent, utilities, physical inventory management).
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Emerging Modes of Business: Comprehensive Class 11 Notes
Introduction to Emerging Modes of Business
What Are Emerging Modes of Business?
Emerging modes of business refer to the new ways businesses operate in today's digital and connected world. Over the past decade, significant changes have shaped the business landscape, driven primarily by advancements in technology, outsourcing, and globalisation. These changes are ongoing, indicating a dynamic business environment that constantly evolves to meet the needs of modern consumers.
E-business vs. Traditional Business
E-business encompasses various electronic transactions and business functions, which differs from traditional business approaches. Below is a comparison between e-business and traditional business models:
Aspect | Traditional Business | E-business |
---|---|---|
Ease of Formation | Complex with many procedural steps | Relatively easy with fewer requirements |
Physical Presence | Required | Not necessary |
Operational Cost | High due to physical resources | Lower due to digital infrastructure |
Customer Interaction | Indirect through intermediaries | Direct through digital channels |
Understanding e-Business
Definition and Scope of e-Business
E-business involves all aspects of running a business over the Internet. It encompasses a wide range of business functions, including production, inventory management, product development, accounting, finance, and human resource management. E-commerce, on the other hand, is a subset of e-business, focusing primarily on buying and selling goods and services over the Internet.
Key Components of e-Business
- Business to Business (B2B): Transactions between businesses, such as suppliers and manufacturers.
- Business to Customer (B2C): Transactions between businesses and their customers, often realised through online stores.
- Intra-Business (Intra-B): Transactions and communications within the same organisation.
- Consumer to Consumer (C2C): Interactions between consumers, often facilitated by platforms like eBay.
Benefits and Limitations of e-Business
Benefits
- Ease of Formation and Lower Investment: Starting an e-business is relatively easy and requires fewer procedures.
- Convenience: Offers '24/7/365' shopping, making it highly accessible.
- Speed: Transactions and information exchange occur almost instantaneously.
- Global Reach: The Internet allows businesses to reach a global audience effortlessly.
- Movement Towards a Paperless Society: Reduces reliance on paperwork, making processes more streamlined and eco-friendly.
Limitations
- Low Personal Touch: E-business lacks the personal interaction found in traditional business settings.
- Incongruence Between Order Taking and Fulfillment: There can be delays or mismatches between online orders and their physical delivery.
- Need for Technological Competence: Requires a high level of familiarity with digital technology.
- Increased Risk Due to Anonymity: Higher risks of fraud and data breaches.
- People Resistance and Ethical Fallouts: Employees may resist technological changes, and ethical issues like privacy invasion may arise.
Online Transactions
Stages Involved in Online Transactions
- Pre-Purchase/Sale Stage: Advertising and information seeking.
- Purchase/Sale Stage: Price negotiation, order placement, and payment.
- Delivery Stage: Physical delivery of products or digital fulfilment.
Payment Mechanisms
- Cash-on-Delivery (CoD): Payment is made at the time of physical delivery.
- Cheque: Payment through a cheque picked up by the vendor.
- Net-Banking Transfer: Electronic transfer using bank services like IMPS, NEFT, and RTGS.
- Credit or Debit Cards: Widely used for online transactions, offering convenience and credit facilities.
- Digital Cash: Electronic currency used for transactions in cyberspace.
graph TD;
A[Pre-Purchase Stage] --> B[Advertising and Information Seeking];
B --> C[Purchase Stage];
C --> D[Price Negotiation and Order Placement];
D --> E[Payment];
E --> F[Delivery Stage];
F --> G[Physical or Digital Fulfillment];
Security and Safety in e-Business
Transaction Risks in Online Transactions
Transactions online are prone to several risks, including:
- Default on Order Taking/Giving: Either party denies placing or receiving the order.
- Default on Delivery: Orders are delivered incorrectly or not at all.
- Default on Payment: Payment issues where the customer claims to have paid, but the seller has not received it.
Data Storage and Transmission Risks
Data is vulnerable during storage and transmission. Tools like encryption (cryptography) can protect data by converting it into unreadable formats, which can only be decrypted by those possessing the secret key.
flowchart LR
user[User] -->|Sends Data| encrypt["Encryption(Cyphertext)"];
encrypt -->|Transfers Encrypted Data| decp["Decryption(Plaintext)"];
decp --> user2[Receiver];
Intellectual Property and Privacy Threats
The open nature of the Internet makes it difficult to protect intellectual property and privacy. Measures such as secure websites and privacy policies are crucial for safeguarding this data.
Business Process Outsourcing (BPO)
Understanding BPO
Business Process Outsourcing (BPO) involves contracting out various business processes to third-party service providers. BPO can include IT services, customer support, human resources, and more. It provides cost savings and allows businesses to focus on core activities.
Examples of BPO
- Customer Support: Call centres and online customer service.
- IT Services: Managed IT and software development.
- Human Resources: Recruitment, payroll, and employee training.
Requirements for Successful e-Business Implementation
Financial and Technological Resources
- Investments in Technology: Hardware, software, and internet infrastructure.
- Manpower and Skillset: Technically qualified personnel to manage and maintain e-business operations.
Operational and Managerial Resources
- Website Development and Maintenance: A functional and user-friendly website is crucial.
- Customer Service and Support: Efficient support channels to address customer queries and issues.
Conclusion
Emerging modes of business, notably e-business and outsourcing, are reshaping how companies operate. They offer numerous advantages, including global reach, lower costs, and improved efficiency. However, businesses must also address challenges such as security risks and technological demands to maximise the benefits of these modern business models.
Frequently Asked Questions (FAQs)
What exactly is e-business?
E-business refers to conducting all types of business processes over the Internet, including production, inventory management, and customer service.
What are the major security concerns with e-business?
Security concerns include transaction risks, data storage and transmission risks, and threats to intellectual property and privacy.
How can e-business benefit a small firm?
E-business allows small firms to reach global markets, reduce operational costs, and provide 24/7 service to customers.
This article on emerging modes of business provides a comprehensive overview for Class 11 students, explaining key concepts, benefits, limitations, and operational details of e-business and BPO. Use this knowledge to understand the evolving business landscape and apply it in your studies and future career.
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