E-business – business on the Internet

E-business models: benefits, opportunities and threats

E-business (electronic business)

Derived from such terms as e-mail and e-commerce, is the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners. One of the first to use the term was IBM, when, in October, 1997, it launched a thematic campaign built around the term. Today, major corporations are rethinking their businesses in terms of the Internet and its new culture and capabilities. Companies are using the Web to buy parts and supplies from other companies, to collaborate on sales promotions, and to do joint research. Exploiting the convenience, availability, and world-wide reach of the Internet, many companies; such as Amazon.com, the book sellers; have already discovered how to use the Internet successfully.

Whether customers are on or off line, in today’s marketplace they want quality products and information in a quick and easy manner. What are the main benefits of the Internet? Even a kid knows its advantages for speed and convenience of use. Therefore e-business, which uses the internet as the core for business dealings, can help make a company more customer-friendly in addition to many other things, such as creating a more efficient exchange of information and/or products and services.

IBM, in 1997, was one of the first to use the term when it launched a campaign built around the term. Today, many corporations are rethinking their businesses in terms of the Internet and its capabilities. Companies are using the Web to buy parts and supplies from other companies, to collaborate on sales promotions, and to do joint research. Exploiting the convenience, availability, and global reach of the Internet, many companies, both large and small have already discovered how to use the Internet

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1. Removes Location and Availability Restrictions

Users need not be in the same physical location as an e-business and the exchange of information and transactions may take place at any given time, twenty-four hours a day, seven days a week and from any location in the world with Internet access. A physical location is restricted by size and limited to only those customers that can get there, while an online store has a global marketplace with customers and information seekers already waiting in line.

2. Reduces Time and Money Spent

In e-business, there is often a reduction in costs required to complete traditional business procedures. Many of those same traditional business approaches can be eliminated and replaced with electronic means, which are often easier to carry out as well as easier on the pocketbook. For example, compare the cost of sending out 100 direct mailings (paper, postage, staff and all), to sending out a bulk e-mail. Also think about the cost of paying rent at a physical location opposed to the cost of maintaining an online site.

3. Heightens Customer Service

With e-business customers receive highly customizable service, and communication is often more effective. There is far more flexibility, availability and faster response times with online support. For example, think about the speed of e-mail inquiries and live chat as opposed to getting on the phone, especially when that business is closed for the day. There is also a faster delivery cycle with online sales, helping strengthen the customer/business relationship. The internet is a powerful channel for reaching new markets and communicating information to customers and partners. Having a better understanding of your customers will help to improve customer satisfaction.

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4. Gives Competitive Advantage

The internet opens up a brand new marketplace to businesses moving online. Competition via the internet is growing as the internet itself grows and waiting too long to move online may cause you to lose your place in line entirely. Easy access to real time information is a primary benefit of the internet, enabling a company to give more efficient and valid information and helping to gain the competitive advantage over those that are not online.

Although there are risks associating with e-business, as with most business decisions, there is also the risk associated with the inability to adapt to the changing times. Change is inevitable in today’s marketplace and should be embraced with open arms and open sites!

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E-Business will allow organisations to:

  • Reduce costs
  • Reach a larger market
  • Eliminate the use of middlemen and intermediaries
  • Reduce search costs by facilitating comparison of price, products and services
  • Reduce lead times
  • Improve production and supply capability
  • Improve personalisation and customisation of product offerings

While also offering:

  • Giving your business the leading edge. A web presence gives your company maximum marketing exposure and an advantage over competitors
  • Maximum exposure, Permanent advertising on a global scale at an extremely tiny cost
  • Customer service and feedback.
  • Customer or employee access to company information and databases during both business and non-business hours increases customer satisfaction.


An e-business model is simply the approach a company takes to become a profitable business on the Internet. There are many different approaches that could seemingly be adopted when contemplating an e-business, all depend on the situation of the business and current market that the company operates in. Although some people, such as Kenneth P. Morse, believe that electronic models are no different from traditional business models, electronic business markets have produced differing models. The basic idea of e-commerce, or doing business on the Internet, is that at least two parties – a seller and a buyer- exchange valuable products or services. The exchange transactions can occur between individuals, businesses and organizations (sic). This leads to an approach based on whether the organisation is:

  • B2C (Business to Consumer)
  • B2B (Business to Business)
  • A2M (Association to Member)
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Selling goods and services online is the natural progression for many companies that are looking to expand their market. There is no other way of reaching more customers that is more cost-effective than an ecommerce site. As you know, this model has been so successful that some businesses (e.g. Amazon.com and eBay) have even forgone a physical location. While their situations stand out from the rest, even existing

  • bricks-and-mortar
  • businesses can benefit from selling online.

One of the keys to ensuring success with your ecommerce site is to make it robust enough to meet the needs of your customers while simple enough so that they don’t need a manual to figure out how to buy something. Typically this means having a searchable catalog and a minimal number of clicks to get from the product page to the order page.

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