This is because free-market consumers have freedom of choice, and they will often choose brand names they recognize. Limited Role of Government Under capitalism, government plays a relatively limited role in the allocation of resources.
A more complete definition is: E-commerce is the use of electronic communications and digital information processing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals. Is e-commerce the same as e-business?
While some use e-commerce and e-business interchangeably, they are distinct concepts. It includes any process that a business organization either a for-profit, governmental or non-profit entity conducts over a computer-mediated network.
A more comprehensive definition of e-business is: Production processes, which include procurement, ordering and replenishment of stocks; processing of payments; electronic links with suppliers; and production control processes, among others; 2.
Internal management processes, which include employee services, training, internal information-sharing, video-conferencing, and recruiting.
Electronic applications enhance information flow between production and sales forces to improve sales force productivity. Workgroup communications and electronic publishing of internal business information are likewise made more efficient. It includes e-commerce and e-business.
The framework shows four layers of the Internet economy-the three mentioned above and a fourth called intermediaries see Table 1. E-markets are simply defined as Web sites where buyers and sellers interact with each other and conduct transactions.
Most B2B applications are in the areas of supplier management especially purchase order processinginventory management i. Table 2 shows the projected size of B2B e-commerce by region for the years There are three cost areas that are significantly reduced through the conduct of B2B e-commerce. First is the reduction of search costs, as buyers need not go through multiple intermediaries to search for information about suppliers, products and prices as in a traditional supply chain.
In terms of effort, time and money spent, the Internet is a more efficient information channel than its traditional counterpart.
In B2B markets, buyers and sellers are gathered together into a single online trading community, reducing search costs even further. Second is the reduction in the costs of processing transactions e. Third, online processing improves inventory management and logistics.
Through B2B e-markets, suppliers are able to interact and transact directly with buyers, thereby eliminating intermediaries and distributors. However, new forms of intermediaries are emerging. For instance, e-markets themselves can be considered as intermediaries because they come between suppliers and customers in the supply chain.
Among the more evident benefits of e-markets is the increase in price transparency. The gathering of a large number of buyers and sellers in a single e-market reveals market price information and transaction processing to participants.Business is primarily an economic activity as it involves production and distribution of goods and services for earning money.
However, business is also a social institution because it helps to improve the living standards of people through effective utilisation of scarce resources of the society. Describe the characteristics of the digital economy and e-business.
Identify the major pressures in the business environment and describe the major organizatio. Characteristics of the digital economy Over the past decade we have seen significant changes in how people and businesses connect. Building on the popularity of social networks, enterprises have established their own business networks to connect suppliers, customers, and internal systems.
The digital economy is the worldwide network of economic activities, commercial transactions and professional interactions that are enabled by information and communications technologies (). After studying this chapter, you will be able to: ³ Describe the characteristics of the digital economy and e-business.
· Recognize the relationships between business pressures, organizational responses, and information systems.3/5(2).
The difference between e-business and e-commerce [ Don't miss: Beyond SMAC: The new platform for digital business] An e-business strategy is also more difficult to execute, with four.