1. Define E-business and differentiate between E-business and E-communication.

Commerce, the exchange of valuable goods or services, has been conducted for thousandsof years. Traditionally, commerce involved bringing traders, buyers, and sellers togetherin a physical marketplace to exchange information, products, services, and payments.Today, many business transactions occur across a telecommunications network wherebuyers, sellers, and others involved in the business transaction (such as the employees whoprocess transactions) rarely see or know each other and may be anywhere in the world.This process of buying and selling of products and services across a telecommunicationsnetwork is often called electronic commerce or e-commerce.

Many people use the term e-commerce in a broader sense: to encompass not onlythe buying and selling of goods, but also the delivery of information, the providing of customerservice before and after a sale, the collaboration with business partners, and theeffort to enhance productivity within organizations. Others refer to this broader spectrumof business activities that can be conducted over the Internet as e-business. Most peopletoday use the terms e-commerce (in its broadest sense) and e-business interchangeably.In this book, we use the term e-business to indicate the widest spectrum of businessactivities that use Internet and Web technologies.

E-Business Advantages and Disadvantages :

Like buyers, sellers also benefit tremendously from the global e-business-based economy.Sellers can increase sales and operations from local to worldwide markets, improve internalefficiency and productivity, enhance customer service, and increase communicationwith both suppliers and customers. Table 1-2 illustrates some e-business advantages for sellers and buyers.

2. Explain Porters generic value chain.

E-Business Value ChainsThe widespread access to the Internet and the Web by suppliers and customers hasencouraged many companies to reevaluate their value chains. In his book, CompetitiveAdvantage: Creating and Sustaining Superior Performance, Michael E. Porter of theHarvard Business School first introduced the concept of a value chain. A companys valuechain consists of all the primary and support activities, called value activities, performedto create and distribute its goods and services.11 Primary activities include all theactivities necessary to produce, sell, and support the companys products. Support activitiesinclude purchasing, human resources, technology, and other functions necessary tosupport the primary activities. At each link in an e-businesss value chain, Internet and Webtechnologies improve communications and transaction speed. Figure 1-11 illustrates ageneric value chain.

Value chains are also used to represent the value activities of any transaction startingwith a product or service and ending with a customer. Internet and Web access is redefiningthe relationships among manufacturers, suppliers, distributors, and customers. Increasingly,a companys value chains can be seen as value networks of the multiple relationshipsthe company depends on to produce and sell its products and services (Figure 1-12).

3. Define EDI and advantages of EDI .

The initial development of e-business transactions began more than thirty years agowhen banks began transferring money to each other by using electronic funds transfer(EFT), and when large companies began sharing transaction information with their suppliersand customers via electronic data interchange (EDI). Using EDI, companies electronicallyexchange information that used to be traditionally submitted on paper forms,such as invoices, purchase orders, quotes, and bills of lading. This exchange occurs bothwith suppliers and customers (often called trading partners). These transmissions generallyoccur over private telecommunications networks called value-added networks, orVANs. Because of the expense of setting up and maintaining these private networks and thecosts associated with creating a standard interface between companies, implementing EDIhas usually been beyond the financial reach of small and medium-sized companies.Today, companies of all sizes use a less expensive network alternative to VANs for theexchange of information, products, services, and paymentsthe Internet. Global access tothe Internet and the Web has changed the way people and businesses around the worldcommunicate.

Advantages :-

1. Shortened the ordering time2. Cost cutting3. Elimination of error4. Fast response5. Accurate invoincing and payments 6. Reduced stock holding7. Speedup cash flow8. Customer lock in

4. Write a note on

i. E business Models :

A companys business model is the way in which the company conducts business inorder to generate revenue. Widespread access to the Internet and the Web is drivingcompanies to adapt old business models and create new ones. Although there are many differentways to categorize e-business models, they can be broadly categorized as businessto-consumer (B2C), business-to-business (B2B), business-to-government (B2G),consumer-to-consumer (C2C), and consumer-to-business (C2B). Table 1-4 describes thegeneral features of these e-business models and provides examples of e-businesses thatfollow them.

Consumers are increasingly going online to shop for and purchase products, arrangefinancing, prepare shipment and delivery of digital products such as software, and get serviceafter the sale. Business-to-consumer, or B2C, e-business includes retail sales, oftencalled e-retail, of goods and services, as well as online purchases of items such as airlinetickets, entertainment venue tickets, hotel rooms, and shares of stock.

Businesses that conduct their transactions from a physical location are sometimesknown as brick-and-mortar enterprises. Many traditional brick-and-mortar retailersfromnationwide companies such as Sears, Best Buy, Barnes & Noble, and the Gap, to regionalor local stores such as The Sunglass Cityare now e-retailers who maintain online storesat which their customers can also view merchandise and make purchases. Companies suchas these, which combine brick-and-mortar business facilities with e-business operations,are sometimes called brick-and-click companies.

Some B2C e-businesses provide high-value content for a subscription fee. Examples ofe-businesses following a subscription model such as this include the Wall Street JournalOnline (for financial news and articles), Consumer Reports (for product reviews andevaluations), and eDiets.com (for nutritional counseling).

Business-to-Business (B2B)

Like B2C e-business models, business-to-business, or B2B, e-business models take a varietyof forms. There are basic B2B Internet storefronts, such as Staples and Office Depot,which provide business customers with purchasing, order fulfillment, and other customizedservices. Some B2B e-businesses offer Internet and Web products such as Web sitehosting and Web page design, networking hardware and software, or e-business consultingservices.

Another B2B model is an online trading community that acts as a central source ofinformation for a vertical market. A vertical market is a specific industry in which similarproducts or services are developed and sold using similar methods. Examples of broadvertical markets include insurance, real estate, banking, heavy manufacturing, andtransportation. The information available at online trading community Web sitesincludes buyers guides, supplier and product directories, industry news and articles, schedulesfor industry trade shows and events, and classified ads. MediSpeciality.com (healthcareindustry), Hotel Resource (hospitality industry), and Elance (IT industry) are examplesof B2B e-businesses that support vertical markets. Figure 1-17 shows a B2B Web site.

In addition to supporting vertical markets, Elance also serves as a B2B exchange.B2B exchanges are e-businesses that bring multiple buyers and sellers together in a virtualcentralized marketplace, sometimes called a marketspace. B2B exchanges may aggregate information from multiple sellers, allow participants to post buy or sell opportunities on an electronic bulletin board, provide auction services that enable multiple buyers or sellers to enter competitive bids on contracts, or provide access to expert information for a specific field.

Business-to-Government (B2G)

A variation on the B2B model is the business-to-government, or B2G, model. Thesee-businesses create a marketspace for sellers wanting do business with governmentagencies. B2G e-businesses provide information on government contracting and bringsuppliers and government agencies together. E-businesses, such as Bidmain andB2GMarkets, follow the B2G e-business model. Figure 1-22 illustrates a B2G Web site.Now that youve become familiar with how B2C, B2B, and B2G e-businesses interactwith individual consumers and other businesses, you can examine another type of businessactivity fostered by the growth of the Internet and Web access, one in which consumersinteract directly with other consumers to buy, sell, and trade items, personal services,and information.

Consumer-to-Consumer (C2C)In the consumer-to-consumer, or C2C, e-business model, consumers sell products, personalservices, and expertise directly to other consumers through a number of methods: by placingonline classified ads, by participating in forward and reverse auctions, or by makingtrades. Examples of e-businesses that involve consumers selling directly to consumers areAmerican Boat Listing, an online boat listing servive; eBay, which offers both fixed priceitems and auctions; TraderOnline.com, which hosts classified ads; and AllExperts.com, anexpert information exchange.

Consumer-to-Business (C2B)Like the B2B reverse auction model, the consumer-to-business, or C2B, e-business modeluses reverse auctions to enable consumers to name their own price for a specific good orservice; once the bid is offered and accepted, it is often binding. An e-business following theC2B model collects an individual consumers bid for a product or service, such as an airlineticket, rental car, or hotel room, and then offers the bid to multiple competing sellerswho either accept or decline the consumers bid. The most well-known e-business followingthe C2B e-business model is priceline.com (Figure 1-27).

In addition to broad categories such as B2B and B2C, there are various subcategories ofe-business models. Many of these subcategories were created by organizations such as governmentagencies, non-profit institutions, and social or religious groups that decided to reducetheir operating expenses and improve customer service by adapting e-business models to theirspecific needs. National Public Radio is an example of a non-profit institution following ane-business model.

ii. Internet and Internet components :

To understand the Internet, you must first become familiar with computer networks. Acomputer network is a group of two or more computers linked by cables, telephone lines,or other wired or wireless media (Figure 1-1). A network of linked computers usuallyincludes special computers called servers that give users access to shared resources suchas electronic files, programs, printers, and connections to other networks, such as theInternet. The Internet is a worldwide public network that connects private networks (Figure1-2).

To connect to the Internet, individuals and businesses generally use some type of physicalcommunications media, such as a network cable, phone line, or, as is increasingly truethese days, wireless media. In addition to some form of media, individuals and small-tomediumsized businesses seeking access to the Internet usually need the services of anInternet service provider (ISP)an e-business that provides access to the Internet for afee. Examples of ISPs include America Online, Netscape Network, EarthLink, NetZero, andRoad Runner. Large businesses, colleges, universities, and government institutions mayhave a computer network that is connected directly to the Internet. Figure 1-3 illustratesan example of an ISP.

5. Explain VADS (Value Added Data Services)Avalue-added service(VAS) is a popular as atelecommunicationsindustry term for non-core services, or in short, all services beyond standard voice calls and fax transmissions. However, it can be used in any service industry, for services available at little or no cost, to promote their primary business. In the telecommunication industry, on a conceptual level, value-added servicesadd valueto thestandard service offering,spurringthe subscriber to use their phone more and allowing the operator to drive up theirARPU. For mobile phones, while technologies likeSMS,MMSanddata accesswere historically usually considered value-added services, but in recent years SMS, MMS and data access have more and more become core services, and VAS therefore has beginning to exclude those services.A distinction may also be made between standard (peer-to-peer) content and premium-charged content. These are called mobile value-added services (MVAS) which are often simply referred as VAS.Value-added services are supplied either in-house by themobile network operatorthemselves or by a third-partyvalue-added service provider(VASP), also known as acontent provider (CP)such asAll NewsorReuters.VASPs typically connect to the operator using protocols likeShort message peer-to-peer protocol(SMPP), connecting either directly to theshort message service centre(SMSC) or, increasingly, to a messaging gateway that gives the operator better control of the content