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Unit 8: e-Business

Overhead Costs Are Reduced: An E-business, essentially, is independent of costs that are Notes
incurred due to business having a physical entity. Utility bills and other expenses are
manageable. You also cut back on costs incurred for hiring personnel and retaining them
with competitive incentives topped with abundant facilities. Running an e-business is
highly convenient as the proprietor does not require need to rent another site to execute
the business.

Task How does e-business help in improving customer service?

Self Assessment

State whether the following statements are true or false:
10. Firms still use expensive online advertising strategies to their advantage.
11. Firms need to have a competitive strategy in order to ensure a competitive advantage.
12. Readily available customer service may help in encouraging the customer to know more
about the product or service.

8.4 Issues with e-Business

A growing number of companies use computers and the Internet in their daily business. It is
therefore not surprising that e-business is an important if not significant part of their business
strategy.
For more information on how you can use e-business as a part of your business strategy, let us
discuss the following issues.
E-marketplace development: Back in 1999-2000, the hype surrounding e-markets was
immense and an average of three new e-marketplaces was being launched every day.
Globally, the number of e-marketplaces for businesses is extensive. This makes it difficult
to identify those e-markets that are most significant. Companies interested in international
trade should be aware that e-marketplaces are potential sources of new customers, and
access routes to global supply chains. eMarket Services has compiled a list of 52 significant
e-marketplaces in 17 industries based on two main criteria; the e-markets are well known
globally in their industries and they have significant global traffic.
Strategic Issues: An organisation’s strategic planning process for e-business needs to be
firmly grounded in the whole of the business. To many in business, the rise of social
media as an effective business tool might have been easily missed. A recent study showed
that 54% of Fortune 100 companies now have a presence on Twitter and 30% are active on
Facebook. Many of those businesses are extracting very real benefits from using social
media. Like other businesses, E-marketplaces also cannot afford to have only one media
(i.e. its website) to engage with existing and potential users. Instead, E-marketplaces need
to be where their users are – and right now, that is on social media sites.

Building Confidence: Beyond compliance with legal requirements one of the primary
concerns of the parties involved in an electronic transaction is the key question of “Trust”.
It is fundamental to develop a sufficient degree of confidence in an electronic transaction
such that the companies are willing to ship the product, transfer funds and enter into a
binding contractual commitment in a real time environment. When it comes to electronic
commercial transactions, if there is no trust, there is no deal.

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