EMERGING MODES OF BUSINESS

 

E-Business risks :

I. Transaction risk :

  1. Denial by customer/seller for order placed.
  2. Default on delivery - wrong address & wrong goods delivered.
  3. Default on payment - Seller does not get payment where as customer claims that the payment was made.

II. Data storage and transmission risk :

  1. Virus destroys information
  2. Hacking : means unauthorized entry into website.

III. Risk of threat to intellectual property & privacy :

Once the information in available on internet, it may be copied.

Resources required for successful e-business implementation

  1. Well designed website.
  2. Adequate computer hardware.
  3. Technically qualified and responsive workforce.
  4. Effective telecommunication system.

OUTSOURCING :

Meaning : Outsourcing means contracting out non core & routine activities to outside agencies with a view to benefiting from their experience, expertise & efficency e.g. Reliance Industries Ltd. wants to advertise its ‘Vima’ brand of clothing. it may appoint ‘X Advertising Co. to design, prepare & release advertisements on its behalf.

Nature / Salient features of outsourcing :

  1. Outsourcing involves contracting out :
    e.g. activities like sanitation, (cleanliness) outside agencies on contractual basis.

  2. Generally non-core business activities are outsourced :
    1. Financial Services: e.g. issue of shares / debentures etc.
    2. Advertising Services : avail the services of expert in advertising related work.
    3. Courier Services: with cheaper rates & safety.
    4. Customer Support Service: After sale service i.e. handling diverse complaints from their customers.

  3. Processes may be outsourced to a captive unit or a third party :
    There are three types of third party service providers.
    1. Captive BPO unit : Provides service of a given kind to only one firm.
    2. Horizontals : Service provided to a wide base of clients, cutting across industries.
    3. Verticals : Specialize in one or two industries & scale up to doing a number of process from non-care of care.

Scope / Segments of outsourcing :

Contract manufacturing
Contract research
Contract sales Information

NEED FOR OUTSOURCING (BENEFITS) :

  1. Focusing on core functions: By contracting out routine / non-care activities, a company can focus on more crucial matters.

  2. Quest for excellence / benefit of specialization : Outsourcing agency provide expertise of concerned function.

  3. Cost reduction: Specialist perform the job at lower price due to large scale services.

  4. Convenience & less investments: The firm need not to invest money in creating & maintaining system for routine & non-care activities.

  5. Economic growth and development : Due to outsourcing every function is performed by the organization most competent to do it. Division of labour & great or specialization helps to maximize productivity & profits limitation of outsourcing.

LIMITATIONS :

  1. Confidentiality : Vital information / knowledge may pan to competitors. via outsourcing firms.
  2. Sweat Shipping : Outsourcing firm try to get maximum benefits from Low-cost manpower.
  3. Ethical concern : Use to child labour in outsourcing firm n unethical.
  4. Resentment in home counters : Contracting out jobs / employment may cause resentment in home countries.

Importance : Questions : (1-10 One mark each) :

  1. Mention any two strongest trends that are shaping the business.
  2. What is e-business.
  3. What is e-commerce.
  4. Mention any two application of e-business.
  5. Give two examples of application of C2C commerce
  6. Mention any two importance of e-business.
  7. How does e-business provide customer convimence?
  8. What is the popular name for credit cards & debit cards.
  9. What is VIRUS.
  10. Mention two types of e-business risks.

3/4 MARKS QUESTIONS :

  1. State any three difference between e-business and traditional business.
  2. What are the opportunities & benefits offered by e-business to the customers.
  3. Explain briefly any four limitations of e-business.
  4. Why are business increasingly outsourcing services. Explain any three reason.

5/6 MARKS QUESTIONS :

  1. Elaborate the steps involved in on-line trading.
  2. How can a business firm assure safety an security of e-transaction? Explain any four methods.

 

CBSE Business Studies Class XI ( By Mr. Kailash Gururani )
Email Id : [email protected]