E-Business

E-Business

E-business is the largest emerging trend in business today. The movement into e-business is dramatically changing the way people buy and sell. Business is no longer a one for all concept, that concept is being replaced by a consumer economy that is driven by choice. These choices are not only in product and price but in shopping environment as well, where their transactions can take place face to face or in an online environment. Not only are traditional businesses completing their transactions with other businesses in such an online format, but such transactions are taking place between businesses and consumers as well as consumers to consumers. The following paper outlines some of the differences and similarities of each of these e-business models.

Business to Business E-Business

There are many companies that offer e-business solutions, but I will be using Intel for an example. Intel is a leader in this field when it comes to the solutions they offer their clients. By utilizing a product based web experience for their business customers they have tailored their organization to effectively manage their supply chain as well as customer relations (David and Malone p. 103).

Intel realizes that e-business is not only about selling products over the Internet but the involvement of managing the supply chain and customer service is also crucial. Tremendous value is added to the process of getting raw materials and also of supplying goods to retailers and distributors in a manor that is desired is required (David and Malone p. 106). The main use of business to business e-commerce is the simplification of all business communications. Intel is able to link with all business customers via the Web, which gives them instant access to each other. Their business based site allows things such as their inventories to be linked. Thus, an entire stage of business, product ordering, is eliminated.

Intel is a leader in e-business supply chain management. One product they have is called TransConnect, which is an end-to-end shipping and fulfillment solution. Corporations can combine a product like TransConnect with custom-made solutions from Intel Supply Chain Consulting and experience new levels of efficiencies and customer service. This allows Intel to be more responsive and productive when meeting the needs of their customers (David and Malone p. 106-107).

Business to Consumer E-Business

Benefits

The development of the Internet combined with decreasing technological costs, the trading between buyer and seller is once again being redefined as E-business. I have outlined some strengths and weaknesses of business to consumer e-business and the way it is affecting the relationship between the consumer and merchant using Amazon.com's Virtual Retailing Model as an example.

Virtual retailing involves the request for and closing of a transaction over the medium of the Internet, via a web page (http://www.cybersolve.com/retail.html). While the processing of the transaction, itself, is key to the existence of a virtual retailer, it is not the most important piece. The key to the success of a virtual retailer, according to Peter G. W. Keen, is the ability of that virtual retailer "to build strong customer relationships". Amazon.com has by far been one of the most successful virtual retailers in building strong customer relationships. 70% of Amazon's customers are repeat customers; this is no surprise when Amazon.com invests 20% of its revenue in attracting consumers and develops different techniques to "bond with the customers", such as "My Amazon" (http://www.computerworld.com/home/print.nsf/all/990614AD62 ).

Traditionally businesses had to locate themselves, plant themselves several times over in order to establish themselves within a close proximity to their customers. However with the development of the internet and e-business this is no longer the case. The physical location of a store is thing of the past to many consumers.

E-business greatly expands the choices available to consumers. From the comfort of their home, place of work, local library or any other location with the internet a consumer can visit stores all over in less time than it takes to drive to a local shopping mall, fight traffic and make their purchase only if they can find the item they wanted. Stores are limited in the number of items they have available, but this is generally not the case when shopping online. This marketing concept can be observed currently among large retailers such as Amazon.com. They can offer their customers the most specialized products just as easy as everyday products.

Most consumers cite convenience as being a prime motivator for online transactions. Customers no longer have to arrange their schedules around the business hours of a local retailer. Shopping at three in the morning is as easy as twelve in the afternoon. In addition to the convenience, education behind the transaction is greatly enhanced. For example, Amazon.com is able to give brief summaries of their products, so that easy comparison is possible.

Threats

The number one threat to the consumer when shopping in a virtual environment is security. Vast improvements have been made in the area of Internet security. Unfortunately, rumors and breached security can have a bad effect amongst consumers with less knowledge of their surroundings. In the area of e-commerce, security perception reigns over reality, especially since reality is hardly defined in such areas. According Melanie Menagh, associate editor of Computerworld, states that "even percent of those online have fallen victim to credit card fraud" (Menagh p. 134). While this number seems relatively low, it translates into six million users. During 1998 online auction sites registered the highest number of complaints. Auction site complaints were up six hundred percent over 1997 (Menagh p. 134).

Security is not the only threat a consumer faces when shopping online. The risk of purchasing items and never receiving the item can also wreak habit on the online environment. Most