E BUSINESS REPORT- ESSAY SOLVED
The business processes is changing overtime, from a simple one to very complex one. Industrial age is the most innovative era of the entire business history. It opened for a more technical and less manual systems that are used in overall manufacturing of an industry. It makes the tasks of the workers a lot easier as well as a lot safer because it enables machines to do the major of the manufacturing and production process of the company.
Since time immemorial, ancient people already began to produce goods for their personal used ( 2001). After some time, people had begun to be skilled and trade their products with other products that will be useful to them. As time goes by, people began to learn the formal structured process of trading ( 2001). It evolved from one-to-one transactions to many-to-many exchanges. People eventually learned the process of manufacturing and production that started from their own homes and eventually to their own workplaces ( 2001). The production and manufacturing processes enables them to have their storage room for their raw materials as well as for their finished products ( 2001).
This started more complex and convoluted commerce, this started the buy and sell of goods as well as trade of different countries in Europe, Asia, America and Australia. Due to this complexity, the marketplace was implemented and eventually made the trading process more efficient and effective ( 2001).
Application of information technologies or ITs and other new e-business solutions helped transformed the operation of supply chain from production to customization (2004). Innovation and implementation of new technologies had helped to improved productivity that helped to generate strong growth of many economies and helped to create much higher standards of living (2004). Over the years of the past century, most of the businesses are focusing on their technological advancement for them to improve their processes of design and manufacturing. This focus on the needs of many organizations and businesses in improving the process of transferring raw materials, machinery and the finished product throughout the entire supply chain of a firm (2004). The application of new technologies with their transportation, telecommunications as well as applications of computerized systems and the Internet had helped many supply chain managers to improved the ability of their organization to plan, organize, supervise and assess their overall processes (2004).
As of now, the business sector is facing another major change in their environment that affects the overall strategies of each and every companies and organizations world wide. The presence of globalizations helps many companies to improve their sales as well as to expand the size of their organization. But for them to succeed there are different dilemma that they have to face and solutions that they have to use in order to prevent future big problems. As of today, the use of IT and other computerized system, continuous innovations and the use of the Internet are considered as the most valuable and useful tool or weapon that can be used in order to maintain their competitive advantage as well as to absorb and adapt to the continuous growing market.
What is E-business?
E-business or Electronic Business is the application of IT and other automated system in different aspects of the overall business processes of an organization. The CEO of IBM, was the one who coined the term e-business.
(2000) defined the e-business as the process of applying variety of information technologies in order for an organization to deliver its mission and is used as the generic and overarching term that signifies the overall behavior of internal and external operations and processes that is conducted over the network (). It includes the use of the Internet, intranets and intranets as well as the World Wide Web to aid the implementation of the organization’s different processes such as the delivery system.
(2002) described e-business as the fully integration of information and communication technologies or ICTs to the operations of an organization that will enable them to redesign its business processes as well as reinvent its business model (2002). IBM also stated that e-business is the holistic concept that covers the full range of overall business functions, aspects and structures that are affected by the Internet technology ( 2002).
(2002) said that e-business is the child of the e-commerce but since its use and eventually bloom, it started to eclipse its parent. It started to develop since its adoption of the Internet during the mid-1990s and started to become widely used due to the importance of information as one of the factor that can provide competitive advantages using the technology of computers. ()
More and more e-business supposes that through the use of these technologies such as data mining, data warehousing, intelligent agents, it will be able to replace the traditional physical processes with a new and improved processes that can be done over the networks. Some think that e-business is a new and major evolutionary step that varies from the online catalogues and different online payments to the adoption and implementation of personalization technologies and supply chain integration ( 2000).
E-business enables different organizations to gain competitive advantage by serving the customers any time and any place that they want, whether in a store, over the phone, online and even offline (2000).
Types of E-business Model
There are two types of e-business that is commonly applied by most of the companies that are using the concept of e-business: the business-to-business or B2B and the business-to-consumer or B2C.B2C like what the name itself pertain, it focuses on the transactions between the business and their customers. All of their products or services will be delivered and served directly to their customers. On the other hand, B2B focuses on the relationships, connections and links of one company or organization to another. It is the application and implementation of different information system that links, connects and relate to or more trading partners in order for them to exchange information, products and services as well as payments with the use of the computer and network technology (2004). It is considered as more popular in the US than the B2C because it focuses on targeting a larger market than focusing on individual customers. It has been said that the
What is Supply Chain?
Supply chain is an infrastructure that is considered as critical for different business processes such as production, distribution as well as consumption of goods and services in big and globalize network of economy (2006). It consists of manufacturer, supplier, distributors, retailers and consumers who are sharing the same demand in the market ( 2006). (2006) explained that there are many factors that can affect the supply chain. This can be the availability of supplies of raw materials, price shocks and the interruption of the transportation modes or the disturbance of telecommunications may affect the supply chain and eventually affect the overall performance of a company or organization. Alternatively, phenomena such as increases in demand for the product, decreases in the transaction costs, new demand markets, new modes of transaction as well as new suppliers will offer new opportunities for maximization of profits for the manufacturers, distributors and the retailers and create new linkages that were not possible in the past ().
Supply Chain in B2C model of E-Business
Just like the usual supply chain, the B2C model is consists of different parties and entities that are involved in delivering the demand and order of the customer. It includes manufacturer, suppliers, transporters, warehouses and the retailer or customers itself. The difference is that B2C e-business model uses the power of technology in development of new products, marketing, distributions, finance, operations and the customer service. It takes advantage of different technologies such as information systems, the Internet, the use of intranet and extranet as well as other computer hardware in organizing, managing and delivering the needs of their customers.
Different companies with the B2C model have different supply chain processes and supply chain entities; it will vary due to the products that they are offering as well as different organizational culture that they are implementing.
All of the supply chain starts from the demand of the customers. All of the information regarding the products and services they are offering and selling are all available in the Internet. This is one of the advantages of using the e-business because it will target the internal and external processes of a company as well as helping to boost the marketing strategy of the company by having and applying the application of e-commerce at the same time. During the first phase of the supply chain in a B2C model, customer will browse the net and eventually find products or services that will suit their tastes, demands and needs.
After that, customers will process their order, and this order will be forwarded to the server of the company and stored in their database for future references. After accepting the order of the customer, it will be checked from the internal inventory system of the company that will distinguished whether the company will be going to order from their suppliers and manufacturer or if the product is already stored in their warehouse. This will help the company to manage their inventory in no time and prevent error in managing the in-flow and out-flow of their products and will be able to monitor in effortless manner the order of their customers whether it was delivered or not.
The payment of the customer will be a bank-to-bank transaction with the help of international or local credit and ATM cards. Using this function or feature, customers will no longer have to go to their main office or branches of the company just to pay their bills and can also cater to the customers that are from other part of the country or even will be able to expand their market by catering to the customers from other countries.
After processing the order of the customers, the company will going to process the delivery of the products to their customers. In this phase, different companies will offer different entities in the supply chain. There are companies that have their own delivery department or delivery feature while others only get the service of an external delivery companies. Therefore, there are some companies who have shipping companies in their supply chain while other has their own department as a part of it.
After the delivery of the product, the company will have to wait for the reaction or feedback of their customers regarding the delivered product. If the product was reported as defective or something like that, the company will have to replace it and again they will have to communicate to their manufacturer or supplier to return and ask for the replacement of the product. There are also some cases that customers are asking for a refund.
The main effect of this model to the supply chain is that it helps to lessen the effort of different companies in communicating with their customers and their respective manufacturer as well as suppliers. It also help to maintain the inside and outside flow of data and information regarding information about their customers, suppliers and employees that will be helpful in retrieval of data. It can also help to monitor the overall process of the business of a given period of time. It can also help the decision making and planning processes as well as application of changes that will help the company to improve.
Advantage of B2C model
One of the most important advantages of B2C model of e-business is that it focuses on the need of the customer individually. Another is that it caters to the three components that are considered as the most important part of any business: the channel of business, the channel of distribution or transportation and the channel of payment ( 2004). With the use of B2C model, businesses will be able to connect these three channels and enables them to gather and analyze correct and reliable information that can be used for decision-making. (2004) explained that this information can be stripped from the products or services and can be analyzed separately to make a better decision with accordance to the company’s overall sales, production, marketing, distribution and other activities that are done inside and out of the company that will affect its overall performance ().
Because all of the information regarding the customer as well as all of the information regarding their transaction to the company are all stored and properly managed with the use of e-business technology, it will be easy for the company to know the taste and needs of their customers. By doing this they will be able to change or improved their services regarding the satisfaction of their client and it can help them to plan and implement their marketing strategies.
Another advantage is the proper management of a company’s inventory. Information at all points of the supply chain is integrated with the use of the e-business technology and can help to create a decision with regards to the required level of inventory and movement of products (2004).
The flow of money is also essential to the e-business. Because of the use of new technologies and other aspects of e-business, company will be able to create an e-payment where in they can receive payments directly from the client to their server. By doing this, customer will no longer exert much effort in paying their bills so as the company will no longer have to communicate physically to their supplier in paying their bills.
The use of B2C e-business can also help save money in inventory process of the company. Those inventories of products that were not used and not sold can carry cost by warehousing and storage cost, obsolescence and spoilage cost as well as insurance cost. Sufficient and well maintained inventory will help the company to meet the demand of the customers as well as to maintain the smoothness of the flow of the production process (2004).
Reliable information about the demand of the product, the change of orders, possible bottleneck and the like situations will allow fewer inventories all through the supply chain, eventually it will increase the return to the shareholders and minimized the cost and at the same time fulfilling the ordered products (2004).
B2C can also enhanced and lower the logistics costs or the cost that is consumed in transporting the product from one place to another. In case of the tangible goods, it involves the freight transportation of raw materials that are pulled from the ground the process of facilitating and converting as well as transforming the materials into usable and finished products and then delivered to the consumers. B2C helps to manage the information flow in separate manner from the flow of the goods by means of connecting the critical point with the supply chain, due to the use of the said technology; logistics are more focused on managing the inventory in in-transit aspect. Because of B2C e-business technology, inventory is managed and eventually reflects to the process of logistics.
The most important advantage and edge of the B2C is that it enables faster and more efficient transactions minus the human interaction therefore promoting error-free and effortless transaction. Technologies such as automated order replacement, payment, and billing are all possible with the use of e-business and therefore promoting faster, cheaper and enhanced supply chain.
Disadvantage of B2C model
One of the most discussed disadvantages of the B2C model is that it is less popular than of the B2B. Another is that because it focuses in individual customer, the sales are less than that of the B2B. B2B offers more opportunity in terms of sales than that of the B2C.
Most of the businesses are already taking the e-initiatives, where most of them believe that technology, innovations and the application of e-business will be able to help them to improve and eventually follow the flow of the fast growing global market. The reason why there are still companies and organizations that are not applying this technology is that because it is definitely costly. In order to implement this kind of technology, companies must get the service of external entities that have the knowledge regarding this technology. After hiring the needed professionals, they have to buy different hardware and software that will be applied to the company, and again it will cost high but the result will be cost-effective. The implementation of the new system will also cost high because it will add cost for the training and other development activities that will help the current employees to adopt the new technology. It is also possible that the company will plan and implement change management that will help the culture and other policies and rules of the company to improved and develop with accordance to the newly installed system.
The application of e-business doesn’t stop in implementation of the system; maintenance will be forever because it will help the company to enhance their system in case that there will be a future problem. Maintenance also cost high for the company because they will have to hire new employees that will cater to the needs of the company regarding its technical aspects, there are even companies that are building and creating new department that specializes in the technical needs of the company.
Application of B2C
B2C are applicable for those companies that are catering individual companies and offers retailing of products. It can also be applied for those companies that are catering to a large area such as one city, one country or even international customers. It also offers direct delivery in household of their customers. B2C is ideal for those companies that are planning to expand the size of their firm and extending and improving their marketing strategy.
The reason why there is B2B because, B2C has no capability of catering to another business as its customer. B2C is not applicable for those companies or businesses that are catering to the needs of another business.
eBay is a well known company in terms of their B2C model of e-business. eBay is a company that offers an online auction that connects their customers that are separated by time and space. It encompasses the traditional face-to-face or personal transaction of buying and selling. eBay made the life of the buyers and sellers easier and make the bonding process a lot cheaper. Because they are online, it offers 24 hours of service, no holidays. Due to these features eBay have become one of the most popular companies that are implementing e-business as well as e-commerce. Electronic auction have become popular around the world and eBay have become the number one and the most successful Internet auction site. It has 22 million registered users from 200 different countries. It started its online service during September of 1995 and as of 2000, it completed a value of $5.4 million worth of customer’s transaction. It offers a fast search engine that enables their customers to search for their more than 8,000 categories in a specific item. It popularity and usability continue to grows and because of the demands and request of their client, eBay is now offering their eBay motors that offers auction for automobiles, different parts as well as accessories with the help of AutoTrader.com. It also offers art collections online auctions. It is just like the traditional auction but the main difference is that anyone can join the auction from different part of the world. To improve their services, the company is still doing their researches and study regarding the behavior of their market and continues to create linkages with other companies all over the world.
eBay is also one of the most profitable companies in the US and become the major player when it comes in marketing and selling variety of items. It is currently running in an annual rate of $9B. Their used car categories enabled them to get a $1B rate that enables them to become the number one company that offers used cars online. It also has the 5% of the whole stamp and coin marketplace. In general, they have their 13% for cars, 50% for the practical products and items, and 30% for their collectibles. The company is now considered as one of the top competitors of other companies in the US that is offering offline services.
The reason behind the success of this company is that it has a vast and diverse collection of products, it also offers products that are rare and difficult to find in other stores, another is that it took advantage of the growing demand of the Internet as well as the globalization, it also offers their customers to interact with other customers and offers wide variety of products in a low price. Excitement is also another factor since the company offers different products every time that the customers go online.
Amazon.com is a B2C company that offers different products and services to their customers all over the world. It has different items such as CDs, DVDs, books and other gadgets. Almost all of the products and items that are rare and limited are available in the site. Amazon.com is also considered as one of the most successful e-business company in the world. But Amazon is well known for its books. It is one of the largest online sellers of books. It became of the well known in that area in just short period of time and became one of the most profitable sellers of books online.
Recently, the company also branched out and offers Internet auctions. This was done due to the popularity and profitability of online auction that was shown by the eBay.com.
The reason behind the success of this company is that they are offering vast varieties of books but because of the use of their technology, it is easy to retrieve information regarding the book that the customer wants to get. It also made the life of the customers a lot easier by delivering the books right after their doorsteps and because they have their e-business, it is easy for them to deliver the books on time.
FedEx is considered as one of the most trusted delivery company in the world. During its 27 years of services, it is the one who pioneered the express delivery service. FedEx is also considered as one of the first companies that have took advantage of the B2C and enables them to offer different services to their customers that enables them to offer their enhanced services, track deliveries in more accurate manner and speed up merchandise returns.
FedEx has its 369 automated hubs and local-pick-up-and-delivery terminals throughout the areas of the US and Canada. It has more than 2.5 million of customers that are connected through their information network and two-thirds of the US transactions are handled online ( 2001).
FedEx uses the technology of the Internet in reaching their customers by offering different customer services that are available in their official website. They have made the transparency of their company by informing their client regarding the status of their deliveries as well as offering money-back guarantees, offer 24 hours of services including Saturdays and personalized scheduled of delivery ( 2000).