Unit – V: Emerging Modes of Business
Very Short answer types Questions:
1. Name the popular name of Debit and Credit Card.
Ans. Plastic Money
2. Which electronic currency exists in cyberspace?
Ans. Digital Cash
3. Give the full name of BPO?
Ans. Business process outsourcing
4 . Which is the common mode of payment under E -Commerce?
Ans. Credit Card
5. Name the service in which a firm gets its tasks done by another firm.?
6. What does ‘e’ stand for in e-commerce?
Short/ Long answer type questions:
Q.1. What is E-Business? Mention its scope.
Ans: E – Business: E – Business refers to all business transactions and functions conducted electronically.
Scope of e – Business: The scope of e – Business is quite vast, it includes the following:
a) B2B Commerce: Refers to electronically conducted business transactions between business to business.
b) B2C Commerce: Refers to electronically conducted Business transactions to Customers.
c) Intra-B Commerce: Refers to electronically conducted business transactions within a given business firm.
d) C2C Commerce: Refers to electronically conducted Business transactions between Consumer to Consumer.
Q.2. Mention the merits and limitations of E-Business.
Ans: Benefits of E – Business
a) Easy to form: It is very easy to start e – business because lots of procedures required for traditional business are not required for e – Business
b) Requires Less Investment: Both big and small business gets the benefits of internet equally. Thus even one start of small business with less investment can derive the benefit of e – Business.
c) Convenience: Internet offers the convenience of 24 hours X 7 days a week with a less investment – i.e. one can access anything, anywhere, any time.
d) Speed: Any business transaction can be made simply at the click of the mouse button.
e) Global reach/access: In e – Business both businessmen and consumers have no national boundaries because internet is without such boundaries.
f) Movement towards paperless society: Cutting thousands and thousands of trees to make paper adversely affects the environment but internet has considerably reduced the dependence on paper.
Limitations of e – Business 2015
a) Low Personal Touch: Interpersonal touch between businessmen and the consumer is very important. e – Business may be high tech but the lacking interpersonal interaction is truly one of its shortcomings.
b) Delayed Delivery: Sometimes order may be placed at once through internet but delivery may be delayed, which may disturb the customers.
c) Need for technological capability and competence of parties: If any one party – either buyer or seller is not familiar with digital technology, e – Business becomes difficult.
d) Risk of Non-Traceability of parties: Cyber personalities participate in e – Business, when any one is in remote area – Traceability may be one the biggest problem.
e) People’s Resistance: In general, people resist changes and halt will be more if any organization prefers to go fully online.
Q.3. Mention the resources required for e-business.
Ans: Resources required for e-business:
a) Adequate computer systems
b) Internet connection and telecommunication system
c) A website
d) Technically qualified workforce
e) Fool-proof system of receiving payments
Q.4. What is the meaning of e-commerce? Distinguish between e-business and e-commerce.
Ans: E - commerce is an electronic system of dealing in all-commercial activities and business transactions through Internet. E-commerce can take place within or among three groups of economic factors namely business, government and individuals.
Difference between e-business and e-commerce:
E – Business is more inclusive term than e – Commerce while e – Commerce refers to a firm’s interactions with its customers and its supplier over the internet. e – Business, apart from e – Commerce includes all other electronically conducted business activities such as inventory management, production, product development, accounting, finance, etc.,
Q.5. What are essential elements for security and safety of e-business transactions?
Ans: There are five essential elements for security and safety of transactions carried out through e-business:
a) Authenticity: It implies that each party in a transaction must ascertain with certainly the identify of the other party
b) Integrity: It implies that there must be honesty in dealings.
c) Confidentiality: It implies that there must be privacy of the transaction
d) Non- reputability of origin: It implies that the parties to a transaction cannot subsequently deny their production
e) Non-reputability of receipt: It implies that the seller subsequently cannot deny the payment received.
Q.6. List the opportunities offered by E-Business.
Ans: E-business offers tremendous opportunities to following four parts of the business:
a) Opportunity to producers: E-Business enables producers to select the best suppliers regardless of their geographical location. The producers can acquire quality raw materials and latest production technology from new suppliers.
b) Opportunity to wholesaler / distributes: Wholesaler by taking the advantage of e-business can work more closely with their suppliers and they can be more responsive to the needs and expectations of their retailers and customers
c) Opportunity to retailer: A retailer can save his existence by linking his business with the on – line Distribution. There fore the retailers who have the capacity to link their business with the online, E-business is a good opportunity
d) Opportunity to customer: Customers can purchase required quality products and services at competitive prices from suppliers anywhere in the world.
Q.7. What do you understand by outsourcing? What is the Need for outsourcing of Services? 2015
Ans: Outsourcing of services means delegation of one or more business processes to an outside agency that would normally have been performed within the organization on a regular basis.
Need for Outsourcing of services:
a) To obtain specialized Services
b) To Get Benefits of latest developments
c) To avoid fixed investment
d) To run business efficiently
Q.8. Mention the nature of outsourcing of services.
Ans: Nature of outsourcing of services:
a) Availability of specialized service agencies
b) Quality service
c) Cheaper service
d) Increase in efficiency of the users
Q.9. Name the types of services which are outsourced.
Ans: Types of outsourcing services:
a) Financial Services
b) Advertising services
c) Courier Services
d) Customer Support Services
Q.10. Mention the major drawbacks of outsourcing.
Ans: Problems of Outsourcing:
1. Confidentiality: Outsourcing depends on sharing a lot of vital information and knowledge. If the outsourcing partner passes it on to competitors it can harm the business to a greater extent.
2. Sweat Shopping: As the firms that outsource seek to lower their costs, they try to get the maximum from the low-cost manpower of the host countries, this may result in sweat shopping.
3. Ethical Concerns: In the name of cost cutting, unlawful activities such as child labour, wage discrimination maybe encouraged in other countries.
4. Resistance in home countries: Contracting out ultimately result in contracting out of employments; this may create resistance in the home countries.
Q.11. Define the following in one line.
Ans: E – Business: E – Business refers to the process of performing Business activities electronically through the means of internet.
E – Trading: e – Trading involves securities trading, i.e. online buying & selling of shares and other financial instruments.
Digital Cash: Digital Cash refers to electronic cash instead of actual money which exists only in cyberspace (also known as cyber currency)
E – Commerce: e – Commerce refers to a firm’s interactions with its customers and suppliers over internet.
Business Process Outsourcing (BPO): The process of contracting out non-core business activities to 3rd parties in order to reduce costs and time involved.
Online Trading: The act of selling and buying anything online.
Q.12. What are the various steps involved in online purchases?
Ans: Steps involved in online purchase
1. Registration: Register yourself with online vendor by filling up registration form.
2. Placing an Order: You can pick and drop the items of your choice in the online ‘shopping cart’.
3. Payment Options: a. Cash on Delivery(COD) b. Cheque c. Net-Banking Transfer d. Credit/Debit Cards e. Digital Cash
Q.13. What are the various steps involved in online transactions?
Ans: Online Transactions involves three stages:-
1. Pre-Purchase/ Sale Stage – Including advertising and information seeking.
2. Purchase / Sale Stage – Comprising of price negotiation, closing deal & payment.
3. Delivery Stage – Involves physical delivery of goods.
The first two steps – involves only interaction and thus can be effectively done online.
Q.14. Distinguish between Traditional business and e-business.
Ans: Difference between traditional and e-business are mentioned below:
Basis of distinction
e – Business
Ease of formation
Need to be near market or Raw Materials
Cost of Setting Up
Nature of Contact with suppliers & Customers
Indirect – Through Intermediaries