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2007-04-25T04:15:05+09:00

E-business　Model and the Issues Tue, 2007-04-24 Definition Purpose of Study History of E-Business New economy and Old economy Definition Electronic business (e-business) refers to the application of the internet to network and empower business transaction, organizational communication and collaboration within a firm and its customers, suppliers, and other stakeholders. “The e-business concept covers all the means to make business through a Web site on the Internet; it covers e-services, e-products, e-sales, the supply chain, the relations between an organization and its customers, individuals or organizations themselves, providers and partners, subsidiaries, employees, etc”(Light e-business glossary English French I to Z, 2005, www site). E-business is sometimes recognized as the business utilizing any kinds of computer technologies, for example electronic spreadsheet or computer design software. However, in this paper, the study will focus on the use of network, in particular, internet, intranet , and extranet . Purpose of study I have written this paper with two major goals in mind. The first goal is that how firms need to choose their business model to demonstrate their best in the competitive economy. Therefore, the first chapter will make comparison between the main e-business models. And the next chapter will presents the advantages and the drawbacks of e-business. The second goal, related to the initial chapter, is to find the solutions for the security, privacy, and trust issues. Although, there are a number of e-business models which is suitable for the each forms of firms, there are also many problems in relation to such models. Hence, the more the number of e-business models increase, the more serious such issues become. The last chapter will discuss the internet law in relation to the security, privacy, and trust. History of e-business E-business has experienced three distinct periods between 1995 and 2005. In the first point, there was a great deal of enthusiasm and hopefulness that resulted in significant investment funds and lent momentum to the early development of the new business. The elevated value spotted in the new business fascinated ever-increasing number of investors who did not want to miss out a possible financial reward. This sequence of the event reflected the so-called ‘dot-com era’ from 1995 to 1999 when the number of internet-based companies increased dramatically each year. Ultimately, the market value far exceeded the real value of the industry and new funding started to decline. Simultaneously, the industry has tempted ever-increasing numbers of competitors who, alike to investors, fear missing out on prospective profits. The industry could not retain inflated values and high numbers of competitors and this, finally, turned out to be the industrial shake out. The second period is when the industry sought to strike a balance that better reflects the value of competitors and matched supply with demand. The dot-com crash in 2000 was an instance of the market movement righting themselves after a time of instability led by the first excitement connected to the business potential of internet. A number of internet-based companies disappeared as quickly as they had emerged and the new business fact indicated that only businesses with first actor advantages or a sturdy business model based on adding actual value to customers would survive. This period between 2000 and 2002 was a reflection time for entrepreneurs, investors, and lenders in the internet economy. They were thought about themselves and learned concerning the usage of the internet for business and commerce. Customers had also improved the knowledge in relation to how to use the new means for browsing and transactions. By the year of 2004, e-business had come to the third phase that many companies resumed using internet as a viable means of transacting and communicating. In this time, entrepreneurs, investors, and customers had come to be much wiser and more experienced in terms of the use of the internet. Managers have considered through their business strategies more carefully and have possessed in the key skills to their structures that could empower a competitive advantage. Entrepreneurs have re-emerged e-business with further better processes and more strong business models for acquiring a competitive advantage. Many more customers have obtained how to use the internet effectively and have been able to transact on the internet. This fact illustrates that internet-based organizations attained some of the greatest customer satisfaction rates of all commercial operations. New economy and old economy Internet has a notion of boundaryless between country and country, because it has opened up the hope of exchanging information, products and services around the world. This type of economy is often called “new economy”, for the internet technology has brought about the economy feature that is very different from the old economy’s one. Table 1 shows the key differences between old and new economy. As the table illustrates, there are many differences between the new economy and the old economy. One of the notable differences between the two economies is that the old economy is relatively stable, while the new economy is dynamic and complex. This fact is reflected in the Business factors since the feature for the new business economy indicates more connective between firms and firms or firms and customers than that of the old economy. As for the consumer factors, it seems that the distance between business and consumer has come to be closer. Issues Old economy New economy Economy factors Markets Stable Dynamic and complex Competition National International abd global Structure Manufucturing Service Value driver physical capital Human capital Business factor Organization Hierarchy Network or virtual Production Mass Flexible,customised Growth rdiver Capital and labour Innovation,speed,quality Relationship Independent Collaborative Consumer factors Tastes Stable Dynamic,segmented Skills Specialized Multipul and Flexible Educational needs Trade orientated Lifelong learning Workplace relations Confrontational Collaboratibe Nature of employment Stable Insecure,opportunistic Chapter1 E-shop and E-bisiness Portaling Manufacture model Distribution model Virtual community Many ambitious business actors in1995 to 1999(dot com era) invested a great deal of capital in the internet, because they were eager to benefit from the new types of business. However, most of them had gone bankrupt due to a lack of the knowledge about the technology, failure of the customers’ expectations, disagreement with the customers’ tastes, or discord between their own business and the new technology. Among them, only the companies established good business model could survive. In the current market, there are countless of internet-based businesses belonging to some of the models. In the beginning, we will examine five of the business models, by looking at the features, aims, targets, and some example of the firms and will concern about how the businesses utilize the internet as the key factors of their businesses. E-shops,Emalls A good place to start is to examine E-shops, E-malls. E shops offer companies with a channel of communication to customers and provide worthful information about what products and services are required by customers. They supply a quick, efficient and convenient course to accessing information on products and services and handling transactions. It is considered that e-shops are easy to enter in the market, for the type of the market is actually perfect competitive market, where there is no prevention from launching business and companies have no influence over the price that they sell. Some of the illustration of this is Nursery goods that provides infant clothes and accessories; Empiredirect specializing in electrical items; Onevillage that supply home accessories; Spoilt4choice offering delivery of gifts. Secondly, e-malls are a collection of e-shops that the owners run individually. In general, the e-malls that consist of a number of e-shops have some commonality between them. This may include the categories of products or services provided, the sort of payment system used or a common industrial market segment targeted. The positive aspects of e-mall is that firms operating e-shops can benefit mainly from supporting activities such as advertising, additional services (ex provision of discount coupon thickets for the online store users), and supporting technologies. Customers have also benefits stemming from the ease of access to a number of e-shops in the same business classification. E-shops have been often set up by firms that have conventionally run the bricks-and-mortar trading environment but are keen on expanding their online services. For a fine example of this, giant department stores like Bloomingdales, Costco, and K-mart in the USA. portaling As the second step in our analysis, we will examine about Portaling. Portal is the online channels through which websites are provided as content. The control of contents could be source of income for companies through charging for advertising for the other firms or charging customers a subscription for access. The portal model can be classified into two main groups such as general portal and personalized portals. General portal has high volume of traffic with millions of website browsers per month. The high volume traffic is very attractive for advertisers and produces revenue streams for the portal owners. There is high competition between websites and websites because the consumers invariably require a range of incentives to choose a particular portal. Examples include search engines like Google and Lycos or content-driven sites like AOL. As for the personalized portals, the content and website design is made for the tastes and interests of each user, because these sites aim at encouraging user loyalty by offering free access to content or software. Furthermore, some firms like Yahoo! and Netscape develop a customized interface that enables users to personalize the website. Manufacture model Another e-business model is Manufacturer model. The manufacturing model comprises the process of disintermediation in the supply chain by establishing a direct line of transaction between manufactures consumers. This brings about lower prices to the consumers because of the saving on the transaction costs. Substitutively, the companies can multiply income by keeping transaction costs saving and offering the customer added value service in the form of quicker delivery of items or customization of goods to satisfy specific consumer preferences. Take Phones.co.uk for example, which just ten years has grown to be one of the largest retailers of new saxophones thanks to the online business. They used to be a bricks-and-mortar, but now they sell their products both in the shop and through the website. Dealing from a site in rural store situated in Sussex helps to retain rent and other overhead to a minimum. Distribution model Next illustration of the model is Distribution model. This business model combine product manufactures with high volume, for example wholesalers, and retail buyers. Buyers have access to catalogues of industrial items and can compare prices between distributors and find the best trader available. As a consequence of it, the buyers can reduce the cost in terms of the procurement costs. At the same time, the distributors benefit from e-distribution by controlling large volume of customers, automating orders, being contact with partners, advancing value-adding services such as order tracking through each point in the supply chain. Here is an example of a company specializing in e-distribution such as Wipro.com who utilizes the internet to offer fully unified e-business-enabled solutions that help to integrate the information flows over all main distribution processes like sales and marketing automation, customer service, warehouse logistics, purchasing and inventory management, and finance. Virtual Community Lastly, Virtual community is a community of customers who share their interest and exchange communications regarding the interest with each other. Virtual communities benefit from network externality whereby the more people who participate in and contribute to the community the higher the benefit that accrue, but without any extra cost to involvement. Amazon.com offers websites for the swapping of information on a wide range of topics with regard to their portfolio of products and services. There are number of possible e-business models to firms. Some include a form of brokerage, others are information based, on the contrary, some are income models based on access to content or delivery systems. Though, each e-business model is planed to add value to consumers by providing a distinctive selling theory, the high level of competition in the e-business market suggests that attaining uniqueness is often very difficult. As a result, firms search for product differentiation or services, provision of the best price or discount, establishment of bland loyalty, supply additional services like facilitating virtual communities. Combe (2006) argues that “Whatever e-business model is chosen, and whatever way it is designed, it needs to be economically viable”. In order to reach this, businesses have to achieve a critical mass of customers, and add value to customers, and carry on the process of innovation, and increase flexibility to the e-business model for making use of opportunities in different markets. Chapter2 Internet business, which is a new form of business making good use of new technologies like computer, has been evolving all the time. On the one hand, the e-business has unlimited opportunities because the market is highly competitive where the first starter, who invents a new acceptable business model, dominates. On the other hand, the fact that no one has ever been challenged the new business model suggests that any one could fall into the failure. In such a competitive environment, what is the significance of e-business for companies? While Firms enjoy a great deal of benefits and opportunities by utilizing of the e-business, the use of the e-business could also be a drawback. Information of abundance In the first place, let us consider the implication in information as products and services for firms. Information is easily created and can be provided among many receivers such as suppliers, customers, and firms. However, the effortlessness and scale of provision does not reduce the value or quality of the product. Over and above, information is easily controlled and changed to suit different needs of customers in different markets. Nevertheless, there also is the possible danger of diseconomies of scale when consumers become submerged by the utter volume of information accessible that search costs of choosing the information they want increase. By contrast, the economics of abundance that prevail much of information among the world works positively according to the theory of the long tail. The long tail theory that has broken the Pareto principle, which the net profit of the top 20% for products outweigh that of the lower 80% for goods, describes that the net profit of the lower 80% for products by far higher than that of the top 20% for goods(Figure 2.1,2.2). For example, electricity store can only stock majour products like televisions, DVD players, washing machines, computers, and the other products that might be sold a large numbers. However, if those items can be stocked and sold online, there is no such limitation on the number of goods available. This suggests that the more selection that becomes available, the more noticeable the income becomes. Network externalities The second point that we should discuss is network externalities. In economics, the term externality is meant by “the theory that some of the costs or benefits of activities "spill over" onto third parties. When it is a cost that is imposed on third parties, it is called a negative externality. When third parties benefit from an activity in which they are not directly involved, the benefit is called a positive externality” (Callahan, 2001). The same applies to the network externality. The noticeable feature of the network externality is that the level of benefit enjoyed by this economic phenomenon varies when the number of the adopters for the network expands. The first and foremost, a company will launch a website that takes into account a particular customer segment. This may include specific tastes and fashion, interests, hobbies or shared experiences. The initial members on the community contribute to the bank of knowledge and information coming from their experiences and knowledge of the topic matter that the website specializes in. As the new information that are added by the new users increases, the website could be more attractive because of the full of information regarding the topic. Furthermore, firms receive the feedback from customers posted on their websites. There is a strong link between market performance of goods sold online and the positive or negative feedback returned by customers. That is, the more positive the feedback for an item the higher the market growth and sales of that product is likely to be. This is cited as the virtuous cycle for the benefits accumulating to customers communicated via the website makes a velocity that leads to further sales. To the contrary, negative feedback unvaryingly causes the quick crash of sales. This is termed the vicious cycle since the let-down expressed by contributors to the website unvaryingly causes reduced sales. It is important to note that the products or services act as the catalyst for adding value with regard to network externalities, while rather external dimension regarding the network with which the products or services are concerned. Moreover, there are both positive and negative consequences of the economic phenomenon. Advantages and disadvantages of use of internet The point which we have to consider next is the advantages and difficult about use of internet for business with respect to costs and price of production. On the one hand, the internet enables customers to compare prices, products and services by searching a multitude of price comparison sites such as Kelkoo, Pricerunner, or Dealtime. This can cause a reduction in products and services because the price transparency leads to more intense price competition between companies within the same market. Thus, companies have to adopt proper pricing policies to overcome the threats posed by the empowerment of consumers. In general, when companies set price for the product, the basic strategies are divided into four categories including premium prices, that price above the market average are charged because the products offer added value to customers in terms of quality, uniqueness, status or availability; average prices, which the price charged indicates the industry demand and supply active; discount prices, that price are reduced below that of the market price; free, which firms provide products and services without charge in order to attract customers. However, it is inevitable for internet-based firms to contemplate the other strategies　such as price discrimination that firms charge different prices according to different consumer segments; bundling, which companies sell a number of items together ( e.g. AOL and Time Warner use the bundling strategy by offering interactive services on television, music on computer, and e-mail on mobile phones alongside their existing services to compete the price comparison sites). On the other hand, internet encourages business to reduce production and distribution cost. The cost of marketing and advertising can be lowered using client information successfully. When it comes to the customer segmentation, which enable firms to adjust the types of products demanded, trends in tastes and fashions, etc., internet can collect and form the basis for a more targeted marketing effort. As a result, companies can prevent from wasting potential cost uselessly. This comprises inventory management, where the electronic monitoring of stock movements improves efficiency in provision of products to customers and ordering replacement stock in good time (e.g. just in time strategy). One of the significant economic impacts of using the internet for e-business has been to propel the competitive environment to that of perfect competition. Nonetheless, two of the most main advantageous aspects comprise the access the internet brings about a broader customer base at low cost, and the reduction in transaction costs. Capter3 The issue of internet security is always troubling many businesses. Nowadays, the number of crimes perverted personal information has been rising. For example, Social networking service site, where the users fill in their personal details ,namely their birthday, the name of favorite artist or pet, or the region they live, like Classmates.com are abused by internet hackers because they can decode the personal password for bank account or credit card by using such information and withdraw money. Under the social condition, internet users have often concerns regarding confidentiality and perceive the internet as being threat to their privacy. Therefore, to improve the privacy standards firms have to co-operate and underpin the legal framework to protect individuals. British internet rule data protection intellectual property law When British firms develop corporation activities utilizing their websites, they have to follow the relevant law and regulations that are basically divided into two parts such as data protection legislation and intellectual property rights Data protection legislation is legal regulations that protect information stored on computers private and that regulate who can read it or use it. This legal rule was introduced under the Data Protection Act 1998. Any organization that holds the customers’ personal information has to register it with the Data protection Register. According to the Information commissioners’ office that is the UK's independent authority launched to promote access to official information and to protect personal information, “the Data Protection Act requires all organizations which handle personal information to comply with a number of important principles regarding privacy and disclosure. The Act states that anyone who processes personal information must comply with eight principles. These state that information must be: Fairly and lawfully processed Processed for limited purposes Adequate, relevant and not excessive Accurate and up to date Not kept for longer than is necessary Processed in line with individuals' rights Secure Not transferred to other countries without adequate protection” (www site). What is more, the European Union has also announced Directive in relation to data protection. The 1995 Data protection Directive 95/46/EC is the chief EU legislation in respect of data protection. This rule is regularly updated to inform changes in data protection issues. In the matter of intellectual property rights, this is the claim on an idea or a design that somebody has created and that the law prevent other people from copying. In e-business, the main three regulations such as patents that provide protection to unique technical innovations, generally in the manufacturing or productive process; trademark which provide protection to signs, brand names, and commercial logos and labels; and copyright that provide protection to literacy, artistic and musical works, media and software, cable services and recordings; are involved in this legislation. Similarly, in Japan, in terms of increase in the number of cyber crimes using computers in the internet cafes, Japanese Police has requested to the internet cafe industry association “Japan multiple café association” for confirmation of the users and keeping of use document. The innovation of the internet has brought about a massive growth in online transactions for products and services. Therefore, the existing legal framework had to be updated to make allowances for this particular method of transacting. Two of the most significant keystones of the legal framework protecting firms engaged in e-business or e-commerce is intellectual property rights consisted of patents, trademarks, and copyright; and data protection legislation that secure access to information held by organizations. Conclusion The internet has clearly been accepted by many of us with the usability, accessibility, and a notion of boundaryless between country and country. From the standpoint of consumers, people have increasingly acquiring knowledge of internet and computers, in particular, they have come to be familiar with online shopping. Likewise, businesses have discovered a number of e-business models that they benefit from, especially, in the market, where firms transact information like music, computer games, or films. Thus, e-business organizations will continue to seek out the new business models and products and services that can fascinate consumers by means of a distinct added value. In the matter of privacy, trust, and security, although, new regulation systems struggle to control the issue, it has been increasing with obsolete laws for the traditional business models. Therefore, it might inferred from this fact that further new regulation law will be updated A computer network system that is private to a company, but utilize the same software as the internet. Network connection to which particular people who are outside of the organization can access. It will be pointed out in the chapter 2 Short tail theory Long tail theory Link ＜E-bisiness glossary＞ e-business e-commerce その他のBUSINSEE TERM :募集

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