The key aspect of e-business is its focus on digitization of business processes. The universal connectivity permitted by the growth of the internet and a standardized way of communicating across different computing platforms is shifting the balance of importance from the physical world to the digital world.
Fundamentally, e-business is a broader concept and it is concerned with using the internet and related technologies to integrate and redesign an organization’s internal activities, processes and external relations, and create new ways of working that are significantly different from, and very often far superior to, what was possible (or conceivable) in the past. In other words, e-business is about developing new ways of working by innovatively exploiting the new capabilities of ICTs in general and the internet and related technologies in particular. Interest in e-business has been driven by companies wishing to increase revenues and lower both operating and capital costs. In summary, e-business is broader in scope and involves marketing, product design, consumer service evaluation, and more. Equally, e-commerce is considered as a sub-set of e-business that covers the use of the internet and other technologies for marketing, selling and servicing of products and can equally apply to either business-to-business or business-to-consumer, although more generally it is associated with the B2C category.
Differentiate between business-to-consumer (B2C) and business-to-business (B2B) transactions (refer to E-Business)
Business-to-Consumer (B2C) transaction refers to businesses dealing with individual consumers or end customers; where as B2B refers to business-to-business transactions where customers are other businesses.
Differences between B2C and B2B E-commerce:
Business-to-Consumer (B2C)
Business-to-Business (B2B)
1. Does not require the business to spend on expensive or extensive infrastructure
1. The process is expensive, time-consuming and attracts many questions about security etc. This is because it requires huge amounts to be spent in integrating the systems of the organization as well as those of its business partners.
2. Sales are made by highlighting the advantages of the product and its usefulness. (i.e. in a B2C sales environment, the sale is between the customer and the product)
2. Sales are made based on the relationship between the buyer and seller. (i.e. in a B2B sales environment, the emotional part of the sale is based on the interpersonal relationship)
3. Requires that sellers update their site regularly regarding product cost and incorporate product catalogue with picture and description of product.
3. Involves association of catalogues of different suppliers that need to be formatted, priced, and presented to buyers in a consolidated fashion.
4. A wide target market. In B2C sales, the market is the entire sales market of consumers.
4. A narrow target market when selling your products. In B2B sales, focus is on the segment that has a use for your product.
5. It is far much easier as options like cyber cash enable the business to function easily.
5. Inconvenient payment options, which involves back-office connectivity, invoicing etc.
6. Shorter sale cycle, in that the sale is almost instantaneous. The customer decides to buy a product and pays right then.
6. Involves a lengthy sale cycle. Where sales are almost based entirely based on a rational decision of business value to your customer.
Table 1: Differences between B2C and B2B E-commerce
Explain how a business benefits from having its own website
For a business, a website is as a central repository for business information and possibly a revenue centre in case of an online store. However, a website typically does not work alone but in sync with a wider range of online activities that collectively serve to generate business. Here are some of the main benefits it will help a business do:
1. Project a professional image. Some customers consider businesses that don’t have websites to be less serious or less stable than businesses that have them.
2. Reach the ever-growing number of customers who look for businesses online. This is true for all kinds of businesses, not just web-related ones.
3. Communicate more information than you can typically fit on a business card or brochure. When you include the web address, called the URL for uniform resource locator, on your business cards, brochures or other printed materials, potential customers can go to your site for more in-depth information such as product details or portfolio pieces.
4. Create a permanent place where you can post information that potential customers can always refer to, unlike brochures or business cards that often get thrown away or lost. This can be helpful to current customers or clients who may need to look up your phone number or payment mailing address.
5. Market your business without paying print costs. This can save you a lot of money if the information you want to communicate is lengthy or changes frequently, such as sales, specials, and new product arrivals. And of course, your website can use full colour, which can be quite expensive to print.
6. Create a central place where all your marketing activities – both online and offline – can be referenced and linked. For instance, your site can (and should) offer links to your Facebook, YouTube and Twitter pages; and a sign-up form for your email promotion list; and a calendar of special events or workshops your business is hosting.
Analyze the nature of E-Business communication
E-business can be defined as the conduct of automated business transactions by many electronic communication networks (e.g. through the internet), end to end. The term end-to-end business transaction signifies that a series of automated business processes and information systems of different companies, which are involved in an inter-company business transaction, is successfully integrated. The aim is to provide seamless interoperation and interactive links between all the relevant members of an extended demand and supply chain. Therefore, an end-to-end process involves integrating designers, suppliers, buyers, trading partners, logistics providers and end-customers in the entire planning and execution process. E-business promotes inter-company business relationship. In fact e-business subsumes the term collaborative business. Another important consideration is customer service; good customer service means ‘quick to respond’.
The concept of e-business is very flexible and covers all possible uses of information and communication technology for any and all of the following activities: making the relationships between the enterprise and its clients and different partners (suppliers, authorities, etc.) more efficient, developing new business opportunities, facilitating the internal flow of information, and controlling the different processes of the enterprise (production, warehousing, purchasing, human resources, sales etc.)
Describe how the internet works:
The internet is a global network of interconnected computer networks linked together by telecommunication facilities (e.g. telephone wires, satellite links, routers etc.) that use a standard internet protocol suite to serve a large number of users. When you connect your computer to the internet, you are connecting to a specific server which is provided and operated by your Internet Service Provider (ISP). A server makes information available to the general public and provides a link between your browser and the rest of the internet.
Figure 1: A connection of a browser to the Internet via a server
In order to provide browsers with the pages and files, ISP servers cannot process the whole requests. Hence, the host server stores and makes information available to other servers. Browsers are application programs that retrieve, presents and traverses information resources on the World Wide Web, for example, Internet Explorer, Mozilla Firefox, Opera, Safari etc.
Figure 2: Connection of ISP servers to the Host server
For the internet to work efficiently, a protocol must exist between two or more communicating computers. A protocol refers to a set of rules that governs communication between two or more computers. The worldwide web (www) is thus a distributed multimedia hypertext systems. Multimedia files are distributed across servers and accessible by clients by use of a Uniform Resource Locator (URL). A URL is a web address for example www.google.com.
Explain how messages are transferred across the internet.
Every computer needs one to communicate on the internet and it is usually built into the computer’s operating system (i.e. Windows, Mac, Linux etc). The protocol stack used on the internet is referred to as the TCP/IP protocol stack because of the two major communicating protocols used. TCP, Transmission Control Protocol which is a set of rules that keeps track of the individual units of data (packets) that a message is divided into for efficient routing through the internet. On the other hand, IP Internet Protocol governs or handles the actual delivery of the data.
The message would start at the top of the protocol stack on your computer and work it’s way downward.
1. If the message to be sent is long, each stack layer that the message passes through may break the message up into smaller chunks of data known as packets.
2. The packets are transmitted via the Application Layer to the TCP layer. Each packet is assigned a port number, after which the packets proceed to the IP layer.
3. Now that the message packets have a port number and an IP address, the hardware layer takes care of turning our packets (data) into electronic signals and transmitting them over the phone line.
4. On the other end, your ISP has a direct connection to the internet. The ISP router examines the destination address in each packet and determines where to send it.
5. Eventually, the packets reach the destined computer. Here, the packets start at the bottom of the destination computer’s TCP/IP stack and are transmitted upwards.
6. As the packets goes upward through the stack, all routing data that the sending computer’s stack added (such as IP address and port number) is striped from the packets.
7. Finally, the data reaches the top of the stack where the packets have already been re-assembled into their original form. There you have received the message sent!
Describe the main features of HTML, the language of the web.
The HTML is a ‘native language’ of the WWW. HTML documents use markup tags, such as the heading tag, body tag etc.
The main features include;
1. The capability to specify a title, a hierarchy of headings, and paragraph elements within an HTML document.
2. The inclusion of hypertext anchors within an HTML document, either defining a jump to another document or object on the Web, or defining both ends of a jump from one location to another location within the same or two different documents.
3. Insertion of non-keyboard character entities
4. The denotation of an included section of text as an address block, in which authorship and contact information can be provided.
5. An HTML element to designate the content of a document as HTML.
6. The specification of bulleted lists and glossary lists
Differentiate between the internet, intranets and extranets.
The Internet is a world-wide system of interconnected yet independent computer networks. It relies on network devices and accepted conventions and protocols to relay the data traffic until it gets to its destinations, therefore not controlled by a central entity.
An intranet is an internal corporate network built using Internet and World Wide Web standards and technologies. Employees of an organization use it to gain access to corporate information. These private networks use the infrastructure and standards of the Internet and the World Wide Web. Using an intranet offers one considerable advantages: Many people are already familiar with internet technology, so they need little training to make effective use of their corporate intranet.
On the other hand, an extranet is a network based on web technologies that links selected resources of a company’s intranet with its customers, suppliers, or other business partners. That is, it limits access to private network to people who are external to the company. Security and performance concerns are different for an extranet than for a web site or network-based internet. User authentication and privacy are critical on an extranet so that information is protected.
Both intranets and extranets are owned, operated and controlled by a single organization. However, the difference between intranets and extranets is distinct in terms of who has access to the private network and the geographical reach of that network. Intranets allow only members of the organization to access the network; extranets allow persons from outside the organization to access the network, while internet allows unlimited access of the network by everyone. Usually, network access is managed through the administration of user IDs and passwords, which are also used to determine which parts of the extranet a particular user can access.
