This page contains the NCERT Business Studies class 11 chapter 5 Emerging Modes of Business from Part 1 Foundations of Business. You can find the solutions for the chapter 5 of NCERT class 11 Business Studies, for the Short Answer Questions and Projects/Assignments Questions in this page. So is the case if you are looking for NCERT class 11 Business Studies related topic Emerging Modes of Business question and answers.
Short Answer Questions
1. State any three differences between e-business and traditional business.
The following are the difference between e-Business and traditional businesses
Basis of distinction
e-business
Traditional business
Ease of formation
Simple
Difficult
Physical presence
Not required
Required
Cost of setting up
Low (no physical facilities)
High (due to physical needs)
2. Describe briefly any two applications of e-business.
The following is a brief description of two applications of e-business
1.
e-Procurement: Internet-based sales transactions between businesses, encompassing “reverse auctions” for trade between one buyer and many sellers, and digital marketplaces for multiple buyers and sellers.
2.
e-Bidding/e-Auction: Features like ‘Quote your price’ on shopping sites allow bidding for goods, including airline tickets. Additionally, it includes online submission through e-tendering.
3. Describe briefly the data storage and transmission risks in e-business.
The following is the brief description of data storage and transmission risks in e-business:
(i)
Transaction risks: Online transactions can face risks such as seller or buyer denying order placement (default on order taking/giving), delivery issues like wrong address or incorrect goods (default on delivery), and discrepancies over payment (default on payment).
(ii)
Data storage and transmission risks: Data, either stored or in transit, is vulnerable to theft or unauthorized modifications. Computer viruses can lead to disruptions or system damage. Cryptography secures transmitted data by converting it into an unreadable format.
(iii)
Risks of threat to intellectual property and privacy: Once information is on the internet, it’s challenging to protect from copying. Data shared during online transactions can be misused, leading to unsolicited promotional content in your email.
Long Answer Questions
1. Why are e-business and outsourcing referred to as the emerging modes of business? Discuss the factors responsible for the growing importance of these trends.
The reasons why e-business and oursourcing are referred to as the emerging modes of business are given below.
1. e-Business:
●
Definition: e-Business is the conduct of industry, trade, and commerce using computer networks, especially the internet.
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Scope: It encompasses not only e-commerce (buying and selling over the internet) but also other electronically conducted business functions such as production, inventory management, and human resource management.
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Benefits:
○
Ease of Formation and Lower Investment: Unlike traditional businesses, e-business is easy to initiate and requires lesser capital.
○
Convenience: It offers 24/7 operations, providing flexibility.
○
Speed: Allows for quicker transactions, especially beneficial for information-intensive products.
○
Global Access: Businesses can reach a global audience without geographical constraints.
○
Movement towards a Paperless Society: Reduces the dependence on paperwork and makes processes efficient.
●
Differences from Traditional Business: Traditional business structures typically require physical premises, are harder to establish, have higher operational costs, and involve hierarchical communication. In contrast, e-business offers simplicity, doesn’t necessitate a physical presence, operates at lower costs, and ensures direct communication pathways.
2. Outsourcing:
Outsourcing involves delegating specific business operations to third-party experts, prevalent in areas such as IT and Business Process Outsourcing (BPO).
Factors Driving the Growth of e-Business and Outsourcing:
1.
Technological Advancements: The rise of the internet and digital tools has facilitated online operations and global collaboration.
2.
Cost Efficiencies: e-business can lead to reduced operational costs. Outsourcing can be a strategy to achieve cost benefits, especially when operations are moved to regions with lower expenses.
3.
Globalization: e-Business allows businesses to cater to a worldwide audience. Outsourcing, in turn, enables tapping into global talent and expertise.
4.
Consumer Expectations: Modern consumers seek convenience and rapid services. e-business caters to these needs.
5.
Competitive Advantage: Leveraging e-business and outsourcing can provide a business edge through specialized services and efficiencies.
6.
Flexibility and Scalability: e-business and outsourcing offer businesses the adaptability to scale as per market demands.
7.
Government Initiatives: Many governments globally support the IT and e-business sectors, encouraging their growth.
In summary, the evolution of e-business and outsourcing is a testament to a changing business environment driven by technology, global outreach, and a quest for efficiency and specialization.
2. Elaborate the steps involved in on-line trading.
1.
Choosing an e-Business Platform: Similar to selecting a trading platform, an individual or business must select an e-business platform suitable for their needs. The chosen platform should offer a secure and user-friendly environment for online trading.
2.
Registration and Setting up a Business Profile: After selecting an e-business platform, businesses need to create a profile. This will include details about the business, products or services offered, and contact details.
3.
Digital Product/Service Listing: ist the products or services you wish to trade. This could be tangible goods, digital products, or services. Include clear descriptions, pricing, and high-quality images or multimedia representations.
4.
Secure Payment Integration: For online trading, integrate a secure payment gateway that facilitates electronic funds transfers, as highlighted in the passage. This ensures seamless financial transactions between buyers and sellers.
5.
Promotion and e-Communication: Leverage e-promotion tools available on the platform. Use email marketing, online catalogs, and banner advertisements to attract potential customers.
6.
e-Delivery: Once a purchase is made, ensure timely and efficient delivery. For tangible goods, this involves shipping, while digital products like software or e-books can be delivered electronically.
7.
Customer Interaction and Support: As the passage highlights, interaction with consumers is essential. Provide prompt responses to queries, facilitate customer reviews, and ensure round-the-clock support, possibly through call centers or chatbots.
8.
Monitoring and Analysis: Use tools to monitor sales, customer feedback, and overall business performance. This helps in understanding market trends and adjusting business strategies.
9.
Regular Updates: Ensure that product listings, prices, and other relevant details are regularly updated based on inventory, market trends, and customer preferences.
10.
Ensuring Cyber Security: Given the online nature of the business, prioritize cybersecurity. Protect sensitive business and customer data from potential threats like hacking or phishing.
11.
Engage in Continuous Learning and Improvement: e-Business landscapes are constantly evolving. Stay updated with the latest e-commerce tools, market trends, and customer preferences. Attend online seminars, workshops, or courses to refine business strategies.
12.
Engage in e-Bidding/e-Auction (If applicable): Some platforms might offer e-bidding or e-auction tools, allowing businesses to set products for bidding or participate in e-tenders.
To successfully trade online, it’s crucial to understand the unique dynamics of e-business. Leveraging the right tools, staying updated with market trends, and prioritizing customer satisfaction can drive success in the digital marketplace.
3. Evaluate the need for outsourcing and discuss its limitations.
Need for Outsourcing:
1.
Cost Efficiency: Outsourcing often leads to a reduction in costs. Businesses can tap into the economies of scale provided by specialized service providers, eliminating the need to invest in certain resources or technologies.
2.
Focus on Core Competencies: By outsourcing non-core activities, businesses can concentrate on their primary functions and areas of expertise, ensuring better utilization of resources and enhanced value proposition to customers.
3.
Access to Expertise: Outsourcing provides businesses with access to experts in specific fields, ensuring high-quality services without investing in training in-house staff.
4.
Scalability and Flexibility: As business needs fluctuate, outsourcing allows for scaling services up or down without significant disruptions or investments.
5.
Speed and Efficiency: Specialized service providers often have streamlined processes that can execute tasks more quickly and efficiently than an in-house team, especially if the task isn’t a primary function of the business.
6.
Risk Mitigation: By outsourcing, companies can distribute responsibilities and risks. The outsourcing provider takes on certain risks related to their specific services, allowing the hiring company to safeguard itself.
7.
Technological Advantages: Outsourcing firms, especially in IT and related sectors, often have access to the latest technologies, ensuring that businesses benefit from the most recent advancements without directly investing in them.
Limitations of Outsourcing:
1.
Loss of Control: Outsourcing means that businesses have to relinquish control over certain processes. This could lead to reduced oversight and potential misalignment with the company’s objectives.
2.
Quality Concerns: If the outsourcing provider doesn’t maintain high standards, the quality of work might not meet the company’s expectations, leading to potential reputational risks.
3.
Security and Confidentiality Risks: Sharing sensitive information with third-party providers might expose businesses to data breaches or misuse of proprietary data.
4.
Communication Barriers: Cultural differences, time zones, or language barriers might lead to miscommunication, potentially affecting the efficiency of the outsourced task.
5.
Over-dependence: Relying too heavily on an outsourcer can make a company vulnerable, especially if the provider faces issues or if there’s a need to switch providers.
6.
Hidden Costs: While outsourcing might seem cost-effective initially, there might be hidden costs like transition expenses, management overheads, or costs related to correcting issues caused by the provider.
7.
Reduced Customer Satisfaction: If front-end processes, like customer support, are outsourced and not managed effectively, it might lead to reduced customer satisfaction due to potential lapses in service quality.
8.
Ethical Considerations: Outsourcing, especially offshore, might raise ethical concerns related to working conditions, wage disparities, or environmental regulations in the outsourced location.
In conclusion, while outsourcing offers several benefits like cost savings, increased efficiency, and access to expertise, it also comes with limitations and risks. Businesses must carefully evaluate these factors, considering their specific context and needs, before opting for outsourcing.
4. Discuss the salient aspects of B2C commerce.
The following are the salient aspects of B2C commerce.
1.
Definition and Nature: B2C, or Business-to-Customers, represents transactions where business firms are on one end and individual customers on the other.
2.
Beyond Online Shopping: While online shopping is a significant part of B2C commerce, it’s essential to note that selling is the outcome of a broader marketing process. This process begins well before a product is offered for sale and continues even after it’s been sold.
3.
Range of Activities: B2C commerce encompasses a wide variety of marketing activities conducted online. This includes:
●
Identifying Activities: Pinpointing potential customers and understanding their needs and preferences.
●
Promotion: Advertising and marketing campaigns designed to highlight the product or service to the consumer.
●
Delivery of Products: For some products, especially digitized ones like music or films, the delivery itself can happen online.
4.
Advantages to Consumers: B2C commerce offers consumers multiple benefits:
●
Flexibility: Consumers can shop anytime and from anywhere.
●
Customized Products: Modern B2C platforms allow for products tailored to individual customer needs.
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Round-the-Clock Interaction: Companies can maintain continuous touchpoints with their customers, conducting online surveys to gauge buying behaviors and satisfaction levels.
●
Consumer-Driven Initiatives: Contrary to the traditional one-way business-to-consumer dynamic, there’s a growing trend of C2B (Customer-to-Business) interactions. Customers can express their preferences, initiate custom orders, or even set their prices under certain models. Support systems, like toll-free call centers, further enhance this two-way interaction.
5.
Technological Enhancements: B2C commerce is powered by technology that offers convenience and speed. Examples from the passage include ATM systems, which have transformed the traditional process of withdrawing money, making it faster and more user-friendly.
6.
Consumer Autonomy: With the rise of B2C commerce, consumers now have greater autonomy in their buying decisions. They have the freedom to shop according to their preferences, expect individual attention, demand customized product features, and choose their preferred modes of delivery and payment.
7.
Continuous Availability: B2C platforms are typically available 24/7, giving consumers the flexibility to browse, compare, and purchase products at their convenience.
8.
Broadening Horizons: Modern B2C commerce isn’t just about buying and selling. It’s expanded to include various interactive elements. Consumers can now share their experiences, provide feedback, participate in online forums or groups, and influence product development and marketing strategies of companies.
In summary, B2C commerce, as highlighted in the passage, has transformed the traditional business-customer relationship. While it offers businesses an effective channel to reach their end consumers directly and efficiently, it also empowers consumers with greater choice, flexibility, and autonomy in their purchasing decisions.
5. Discuss the limitations of electronic mode of doing business. Are these limitations severe enough to restrict its scope? Give reasons for your answer.
Limitations of e-Business
1.
Low personal touch: High-tech it may be, e-business, however, lacks the warmth of interpersonal interactions. It’s relatively less suitable for product categories requiring a high personal touch, such as garments and toiletries.
2.
Incongruence between order taking/giving and order fulfilment speed: While information can flow instantly with the click of a mouse, the physical delivery of products takes time, which might test the patience of customers. Moreover, technical issues can sometimes cause websites to load slowly, further frustrating users.
3.
Need for technology capability and competence of parties to e-business: e-business necessitates a high degree of familiarity with the digital world. This requirement results in a digital divide, segregating society based on digital technology familiarity.
4.
Increased risk due to anonymity and non-traceability of parties: Transactions on the internet occur between cyber personalities, making it difficult to ascertain the identity or even the location of the parties. This anonymity heightens risks related to impersonation, data breaches, and the leakage of confidential information.
5.
People resistance: Transitioning to new technologies and methods can be stressful, leading to resistance among people accustomed to traditional ways of doing business. This resistance might slow down an organization’s shift to e-business.
6.
Ethical fallouts: Ethical concerns arise, particularly regarding privacy. For instance, companies might monitor employees’ computer files, emails, or website visits, raising questions about privacy and ethical oversight.
Are These Limitations Severe Enough to Restrict Its Scope?
While the limitations of e-business are genuine and significant, most of them are being addressed as technology and society evolve:
1.
Technological Advancements: As technology progresses, many of the issues, such as slow website load times, are being mitigated.
2.
Human Adaptability: Over time, people get accustomed to new technologies. The resistance to e-business will likely decrease as more people become familiar and comfortable with the digital mode of doing business.
3.
Security Protocols: As the risks related to anonymity and data breaches become apparent, more robust security protocols and measures are being developed to protect users and businesses.
4.
Ethical Regulations: Concerns related to privacy and ethical fallouts are leading to stricter regulations and guidelines to protect users’ rights and ensure ethical practices.
5.
Global Reach of e-Business: Despite its limitations, the global reach, convenience, and efficiency offered by e-business are unparalleled. The benefits it offers to both businesses and consumers are significant enough to outweigh its drawbacks.
In conclusion, while there are clear limitations to the electronic mode of doing business, they aren’t severe enough to restrict its scope. Instead, these challenges act as catalysts, prompting innovation and improvements in the e-business domain. The continuous evolution and the numerous advantages e-business offers make it a formidable force in the modern business landscape.
Projects/Assignments
1. Compare and contrast the products and their prices available on the internet and in retail shops. Is the quality, customer satisfaction and other factors the same?
Project: Comparing Products and Prices on the Internet vs. Retail Shops
Objective: To understand the differences in products, prices, quality, and customer satisfaction when shopping online vs. in retail shops.
Methodology:
1.
Selected five commonly purchased products: a pair of sneakers, a mobile phone, a fiction book, a wristwatch, and a handbag.
2.
For each product, researched three popular e-commerce websites in India and three local retail shops in my city.
3.
Documented the prices, noted special offers or discounts, and read online reviews for online products.
4.
Visited retail shops to check the price, feel the product, and speak with the salesperson and a few customers if possible.
Findings:
1.
Sneakers:
●
Online: Average Price: ₹ 3000, Discounts available, Reviews mixed with some mentioning sizing issues.
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Retail Shop: Average Price: ₹ 3300, Opportunity to try them on, personalized suggestions from the salesperson.
2.
Mobile Phone:
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Online: Average Price: ₹ 15,000, EMI options available, Reviews mostly positive but some mentioned delivery delays.
●
Retail Shop: Average Price: ₹ 16,500, Instant possession, salesperson demo available.
3.
Fiction Book:
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Online: Average Price: ₹ 350, Some users mentioned receiving pirated copies.
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Retail Shop: Average Price: ₹ 400, Opportunity to feel the book and check the print quality.
4.
Wristwatch:
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Online: Average Price: ₹ 2500, Multiple brand options, some users mentioned receiving faulty pieces.
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Retail Shop: Average Price: ₹ 2700, Opportunity to try it on and check the fit.
5.
Handbag:
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Online: Average Price: ₹ 1200, Multiple color options, some users were unsatisfied with the material.
●
Retail Shop: Average Price: ₹ 1400, Can check material quality, internal pockets, etc.
Analysis:
(i)
Price: Products online tend to be slightly cheaper than in retail shops. This could be because of the elimination of middlemen, reduced operational costs, and competitive online pricing.
(ii)
Quality Assurance: Retail shops provide an opportunity to touch, feel, and try products. This tangible experience might reduce the risk of quality issues.
(ii)
Customer Satisfaction: While online shopping offers convenience, the lack of physical examination leads to occasional dissatisfaction, as seen with the sneakers’ sizing issues or the handbag’s material concerns. Retail shops offer more personalized service, leading to instant query resolution and higher satisfaction.
(iv)
Additional Factors: Online platforms provide a broader range of options, user reviews, and often more significant discounts, especially during sale seasons. However, the waiting time for delivery and the risk of receiving a product that doesn’t meet expectations are potential downsides.
Conclusion:
Both online and retail shopping have their pros and cons. While online shopping offers convenience, competitive pricing, and a broader range of options, retail shopping provides a tactile experience, immediate gratification, and personalized service. The best shopping method might depend on individual preferences, the specific product in question, and the importance of price vs. hands-on experience for the buyer.
2. Study any business unit/company which is using e-commerce, e-business as a way of doing business. Interview some people working there and find out the advantages in practical business in terms of its costs also.
Project: Study of E-commerce Practices in a Business Unit – ‘ElectroHub’
Objective: To understand the practical advantages of using e-commerce and e-business in real-world business scenarios, with a focus on cost benefits.
Company Overview: ‘ElectroHub’ is a leading electronics e-commerce platform in India. They deal in a wide range of products, from smartphones to laptops, home appliances to personal gadgets.
Methodology:
1.
Selected ‘ElectroHub’ for study after browsing top e-commerce companies in the electronics domain.
2.
Reached out to their customer service team via email to set up a virtual interview.
3.
Interviewed two employees: Mr. Anand Sharma (Operations Manager) and Ms. Shruti Verma (Digital Marketing Head).
Findings:
1.
Operational Costs:
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Inventory Management: ‘ElectroHub’ uses a just-in-time inventory system linked with their e-commerce platform. It reduces warehousing costs as they stock based on demand predictions.
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Staffing: With automated online systems, the need for sales staff reduces, leading to cost savings.
●
Rent and Utilities: Being primarily online, ‘ElectroHub’ operates majorly from one centralized location, reducing costs related to physical storefronts.
2.
Marketing Costs:
●
Targeted Advertising: Ms. Verma highlighted the benefits of online marketing. They can specifically target their ads to potential customers, reducing wastage and improving ROI.
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Customer Analytics: The e-commerce platform provides insights about customer preferences, helping in efficient product placements and promotions.
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Affiliate Marketing: They’ve tied up with bloggers and reviewers who drive traffic to their site, and they only pay for actual sales made, reducing marketing costs.
3.
Sales and Distribution:
●
Wider Reach: E-business allows them to cater to customers across the country without physical expansion.
●
Dropshipping: For some products, ‘ElectroHub’ uses a dropshipping model, where they don’t hold the inventory, further reducing storage and handling costs.
4.
Customer Interaction:
●
Chatbots and AI: Mr. Sharma emphasized the use of chatbots, which handle customer queries 24/7, reducing the need for a large customer service team.
●
Feedback Systems: Online review and feedback systems provide real-time insights to improve service without expensive market research.
5.
Transaction Costs:
●
Digital Payments: Majority of transactions are digital, which has lower processing fees than traditional methods and also ensures quicker payment cycles.
6.
Business Scalability:
●
Flexible Platform: E-business platforms can be easily scaled up with increasing demand without significant changes in infrastructure.
●
Global Expansion: They’re planning to expand to neighboring countries, which is easier and cost-effective with an e-commerce model.
Conclusion:
‘E-commerce and e-business models, as seen in ‘ElectroHub’, offer numerous cost advantages. These range from operational savings to efficient marketing strategies and flexible scalability options. The shift from traditional business models to e-business is not just a trend, but a strategic move that offers tangible financial benefits.
