The following are the ten important characteristics of a business:
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.
B2B e-commerce is simply defined as e-commerce between companies. This is the type of e-commerce that deals with relationships between and among businesses. The B2B market has two primary components: E-frastructure is the architecture of B2B, primarily consisting of the following: 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.
The Internet allows for the publication of information on a single purchase or transaction, making the information readily accessible and available to all members of the e-market.
Increased price transparency has the effect of pulling down price differentials in the market.
In this context, buyers are provided much more time to compare prices and make better buying decisions. Moreover, B2B e-markets expand borders for dynamic and negotiated pricing wherein multiple buyers and sellers collectively participate in price-setting and two-way auctions.
In such environments, prices can be set through automatic matching of bids and offers. In the e-marketplace, the requirements of both buyers and sellers are thus aggregated to reach competitive prices, which are lower than those resulting from individual actions.List the three characteristics of the digital economy.
These characteristics include: a wide variety of digitized products, financial transactions being conducted digitally, and microprocessors and network capabilities embedded in physical goods. Section Review Questions 1. List the components of the business environment impact model and explain the model%(7).
View L Digital Economy from ACCOUNTING at Asia Pacific Institute of Information Technology (APIIT). MISO-Chapter 1 Digital Economy Source: Information Technology For Management 5 th. 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.
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).
MEASURING THE DIGITAL ECONOMY Thomas L. Mesenbourg Assistant Director for Economic Programs the Census Bureau developed definitions and concepts to describe the digital economy.
Our starting budget (October September ). The key characteristics of our e-business measurement strategy are described below. Describe The Characteristics Of A Digital Firm. Angel Terry The Meaning of Digital Firm Business Communications The meaning of Digital Firm is nearly all of the organization’s significant business relationships with customers, suppliers, and employees are digitally enabled and mediated” (Laudon, p.
11). This is the meaning of digital firm in which it was given in our text book.