Emerging Modes of Business

5.1 INTRODUCTION

The business environment has undergone fundamental changes over the last decade, leading to new ways or 'modes' of conducting business. The term 'mode of business' refers to the manner in which business activities are carried out. The prefix 'emerging' highlights that these changes are current and ongoing trends likely to continue shaping the business landscape. Three major trends shaping business today are: (i) digitisation — converting text, sound, images, video, and other content into electronic signals (ones and zeroes) for transmission; (ii) outsourcing — contracting out business processes to external agencies; and (iii) internationalisation and globalisation — expanding business activities beyond national borders. This chapter focuses on the first two trends: digitisation (electronic business or e-business) and Business Process Outsourcing (BPO). These are not new types of business but new ways of conducting existing business activities. Business aims to create utilities or value in goods and services that satisfy consumer needs and wants. To improve business processes such as production, marketing, finance, and human resources, managers continuously seek better methods. Firms must enhance their capabilities to deliver quality, lower prices, faster deliveries, and superior customer care to meet competitive pressures and increasing consumer expectations. The adoption of emerging technologies drives this evolution in business practices.

• Mode of business refers to the manner of conducting business activities.
• Emerging modes signify current and ongoing changes in business methods.
• Three key trends: digitisation, outsourcing, and globalisation.
• Digitisation involves converting content into electronic signals for transmission.
• Business aims to create utility and value for consumers.
• Continuous improvement in business processes is essential for competitiveness.
• 📌 Mode of Business: The manner or method of conducting business activities.
• 📌 Digitisation: Conversion of information into electronic digital format.
• 📌 E-Business: Conducting business processes electronically using computer networks.

5.2 e-Business

E-business refers to conducting industry, trade, and commerce using computer networks, primarily the internet. While the internet is a public network accessible globally, firms may also use private networks for secure and efficient internal management. E-business is broader than e-commerce. E-commerce specifically involves transactions between firms and their customers or suppliers over the internet. In contrast, e-business encompasses all electronically conducted business functions including production, inventory management, product development, accounting, finance, and human resource management. The scope of e-business is vast and includes various types of electronic transactions: (i) B2B (Business-to-Business): Transactions between business firms, such as manufacturers ordering components from suppliers or coordinating distribution channels. For example, an automobile manufacturer sourcing parts from multiple vendors worldwide uses computer networks to place orders, monitor production, and make payments. (ii) B2C (Business-to-Customer): Transactions between firms and individual customers, including online shopping, marketing, promotion, and delivery of products such as music or films. B2C commerce enables businesses to interact with customers 24/7, customize products, and conduct online surveys. (iii) Intra-B (Intra-Business): Electronic transactions within a firm among departments and employees, facilitating flexible manufacturing, inventory management, cash flow, and human resource functions. Technologies like intranet and Virtual Private Networks (VPN) allow employees to work remotely and hold online meetings. (iv) C2C (Consumer-to-Consumer): Transactions between consumers, often involving used goods or barter. Platforms like eBay facilitate such exchanges by providing ratings and payment intermediaries like PayPal to ensure security. E-business has transformed traditional business by enabling flexible manufacturing and mass customization, allowing firms to offer tailored products at lower costs and faster delivery times.

• E-business uses computer networks to conduct all business activities electronically.
• E-commerce is a subset of e-business focused on transactions with customers and suppliers.
• B2B involves transactions between businesses, e.g., suppliers and manufacturers.
• B2C involves business interactions with customers, including marketing and sales.
• Intra-B commerce manages internal business processes electronically.
• C2C enables consumer-to-consumer transactions via online platforms.
• 📌 E-Business: Conducting all business processes electronically using computer networks.
• 📌 E-Commerce: Buying and selling of goods and services over the internet.
• 📌 B2B (Business-to-Business): Electronic transactions between businesses.