E-business and E-commerce
E-business and E-commerce
The Evolution of E-business
E-business is defined as the gradual transformation of vital business activities through the use of internet and other computerized technologies. There is no doubt that the internet has revolutionized almost every sphere of life, including vital economic sectors such as health provision, transport and communication, and agricultural management. Similarly, its role in simplifying and reinvigorating business activities is indeed immeasurable. For instance, since its initiation, its impact on electronic communication is increasingly becoming enormous each passing day. Currently, opportunities offered by e-business have the potential of accessing over 1 billion customers worldwide. In addition, they have the capacity to connect the customers with millions of varied items.
As more and more sophisticated communication tools keep emerging, the limit of e-business opportunities can only be estimated to be infinite. Already, enrichment of the cyberspace has led to the development of functional mediums that foster business competitiveness and profitability. Some of the mediums that have gained prominence include: use of social sites such as Facebook and MySpace, utilization of rich media platforms (blogs, online videos, and interactive applications on websites), preference for mobile commerce that exploits portable computers, and use of tracking technologies to trail goods in transit (Chaffey, 2007, p.39).
Fundamentally, e-business has used the internet to remodel the market place into three critical sub-portions, namely: intranet, extranet, and the internet. The intranet refers to the insiders or employees of a company who have unlimited access to its information. On the other hand, the extranet represents individuals who have a close collaboration with an organization. Typically, they comprise of the suppliers and consumers. Lastly, the internet comprises of the entire world that has access to online materials.
Besides modifying the global market into three subdivisions, e-business has given rise to seven new transactional models that complement the traditional commercial models. Historically, only two business perspectives existed: business to consumer (B2C), and business to business (B2B). The other additional transactions introduced by a broadened economic environment include:
- Consumer to Consumer (C2C).
- Consumer to Business (C2B).
- Consumer to Government (C2G).
- Business to Government (B2G).
- Government to Consumer (G2C).
- Government to Business (G2B).
- Government to Government (G2G).
E-business and E-commerce in the Supply Chain
Supply chain management (SCM) refers to the systematic coordination of all supply related activities that are carried out from suppliers to the consumers. There are two components to this activity, namely: value chain and value network. Whereas e-commerce is responsible for the value chain side, e-business is responsible for the value network side. The immense benefits accrued to both of these sides contribute enormously to the general success of SCM. Nonetheless, each side also has its own limitations as discussed below.
Value Chain and E-commerce
Value chain refers to the various value addition activities that ensure a company’s supply side addresses the unique requirements of its demand side. Primarily, the role of e-commerce in this chain entails use of electronic technologies to mediate the buy side and the sell side of a business. Some of its benefits in this process include: reduced distribution and transaction costs, efficient provision of vital information to suppliers and consumers, and effective utilization of time (Nakakhtar & Jianzheng, 2012, p. 5681).
Limitations to SCM. Consumer skepticism is the chief source of problems hindering the efficacy of e-commerce and value addition. For example, most consumers get discouraged by lack of a clear tangible benefit resulting from undertaking such transactions. General lack of trust also hampers some probable consumers from utilizing this model. The third limitation is the fear of security threats conducted by experienced hackers that might lead to loss funds to unscrupulous agents. Lastly, electronic distribution by firms is also derailed by lack of skills and associated cost problems. There are some suppliers or consumers who lack the necessary funds or skills that can enable them acquire or utilize complicated internet enabled devices.
Value Networks and E-business
The role of e-business in value networks is to interlink and manage many interrelated value chains. In so doing, it facilitates collaboration and information sharing amongst many businesses leading to better inventory forecasts for each firm (Wagner & Sweeney, 2010, p. 29). Ideally, value networks are created to ensure that the consumers benefit by gaining access to numerous integrated suppliers. They also benefit distributers who incur a lower cost by paying for a single network that gives them access to numerous customers.
Limitations to SCM. The limitations of e-business to the success of SCM include: poor leadership practices in organizations, reluctance to cooperate amongst peer entities, unwillingness to change, lack of trust, fear of losing jobs, danger of being by-passed by technology, communication problems, and difficulties in uniting the processes and cultures of associate companies (Wagner & Sweeney, 2010, p. 37). It is evident that the limitations of e-commerce to SCM are largely expressed by consumers, while those of e-business are expressed by partnering companies. However, problems of insecurity and lack of trust are a hindrance to both of them.
Chaffey, D. (2007). E-business and E-commerce Management: Strategy, Implementation and Practice. Pearson Education.
Nikakhtar, N., & Jianzheng, Y. (2012). Role of e-commerce in supply chain management to minimize costs. African Journal of Business Management, 6(17), 5671.
Wagner, C., & Sweeney, E. (2010). E-business in supply chain management. Electronic supply network coordination in intelligent and dynamic environments, modeling and Hershey, PA: IGI Global, 24-42.
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