E-Business

Difference between E-commerce and E-business

E-commerce means buying, selling and exchanging goods, services and information over the internet and other computer networks. E-business is a wider term: it means carrying out every business process electronically, including buying and selling, customer service, collaboration with partners, production control, inventory, finance and human resources.

Features of E-commerce

1. Ubiquity: the market is open everywhere and at any time; it is not tied to a physical place, so the customer shops from home, office or mobile.
2. Global reach: trade crosses national and cultural boundaries at low cost, giving a much larger potential market.
3. Universal standards: one set of internet standards (TCP/IP, HTML, HTTP) is used everywhere, which lowers entry cost for sellers and search cost for buyers.
4. Richness: text, audio, video and graphics can be combined in a single marketing message.
5. Interactivity: two-way communication between merchant and customer, such as chat, reviews and online support.
6. Information density: the total quantity and quality of information available to all participants rises while its cost falls, so prices and costs become transparent.
7. Personalisation and customisation: offers, content and prices can be tailored to an individual using browsing and purchase data.
8. Social technology: user-generated content, ratings and social networks are part of the shopping experience.
9. Lower cost and 24x7 operation: no shop rent or fixed opening hours; automated order processing is fast and cheap.

Brokerage model

A brokerage model is an e-business model in which a company acts as an intermediary (broker) that brings buyers and sellers together on a web platform and facilitates their transactions. The broker does not usually own the goods; it earns revenue as a commission or fee per transaction, a listing fee, or an advertising fee. Examples are eBay (auction broker), Expedia and Booking.com (travel brokers), Sastodeal-type marketplaces, online stock brokers and Upwork (service broker).

Typical types of brokers are the marketplace exchange, buy/sell fulfilment, demand collection (reverse auction), auction broker, search agent and transaction broker.

Price discovery in the brokerage model

Price discovery is the process by which the buyer and seller agree on the price of an item. In e-brokerage it is done in the following ways.

1. Fixed (posted) price / catalogue: the seller posts a price and the buyer accepts or rejects it. It is simple and fast, and suits standard goods.
2. Negotiation (bargaining): buyer and seller exchange offers and counter-offers, directly or through software agents, until they reach an agreement. Used for high-value or customised goods.
3. Auction: many buyers compete, and the price is set by demand.
   • English (ascending) auction: bids rise, and the highest bidder wins (eBay).
   • Dutch (descending) auction: the price starts high and falls until a buyer accepts.
   • First-price sealed-bid auction: bids are secret; the highest bidder wins and pays the bid.
   • Vickrey (second-price) auction: the highest bidder wins but pays the second-highest bid.
4. Reverse auction (demand collection / name-your-price): the buyer states what they want, and sellers bid downwards to win the order (Priceline, tendering portals).
5. Dynamic pricing: prices change with demand, time, stock or customer segment, as in airline and hotel booking.
6. Group buying: the price drops as more buyers commit to the same deal.
7. Matching (double auction / exchange): buy and sell orders are matched automatically, as in a stock exchange, where the price is set by supply and demand.

Auctions and exchanges are strong forms of price discovery because the market itself reveals the true value of an item.

E-business models by relationship of transaction parties

Models are classified by who the buyer and seller are. The main ones are listed below.

1. B2C (Business to Consumer): a business sells directly to individual consumers through a website or app. Examples: Daraz, Amazon, an airline's ticket site. Features: online catalogue, shopping cart, payment gateway, high volume and small orders.
2. B2B (Business to Business): transactions between companies, such as a manufacturer buying from a supplier or a wholesaler selling to retailers. Examples: Alibaba, e-procurement portals, EDI-based trading. Orders are larger, prices are negotiated and relationships are long-term.
3. C2C (Consumer to Consumer): consumers sell to other consumers using a third-party platform that charges a fee. Examples: eBay, Hamrobazar, OLX, Facebook Marketplace.
4. C2B (Consumer to Business): an individual offers a product or service to businesses, or names a price that businesses compete to meet. Examples: freelancers on Upwork or Fiverr, stock-photo contributors, Priceline's name-your-price.
5. B2G (Business to Government): businesses sell goods and services to government bodies or bid for tenders. Example: Nepal's e-GP (e-bidding) portal.
6. G2C (Government to Citizen): government provides services to citizens online, such as tax filing, bill payment, passport and licence applications, and e-voter registration.
7. G2B (Government to Business): government deals with businesses through company registration, tax and customs systems, and licensing.
8. G2G (Government to Government): online exchange of data and services between government departments or countries.
9. P2P (Peer to Peer): users share files, resources or money directly with each other without a central server. Examples: BitTorrent, peer-to-peer lending.
10. Intra-business (B2E, Business to Employee): the company delivers services and information to its employees through an intranet, such as payroll and training.

In short, the labels differ by the parties involved: B2C and B2B concern the business sector, C2C and C2B bring in the consumer as seller, and the G-models concern government.

Software agents

A software agent is a computer program that acts on behalf of a user or another program, working autonomously to carry out a task without continuous human supervision. It senses its environment (web, network, databases), makes decisions according to rules or goals set by the user, and acts, often learning from experience.

Main characteristics:

• Autonomy: works without constant direction.
• Reactivity: responds to changes in its environment.
• Pro-activeness: takes initiative to reach its goal.
• Social ability: communicates with other agents and with users.
• Learning and adaptability: improves with experience and adjusts to user preferences.
• Mobility: some agents move across the network to the place where the data is.

Examples: shopping bots (price comparison), search crawlers, email filters, recommendation agents, chatbots and trading bots.

Value of software agents in the networked world

1. Handle information overload: the web holds more information than any person can read; agents search, filter and summarise it.
2. Save time and effort: repetitive jobs such as monitoring prices, checking mail or tracking orders run automatically, 24x7.
3. Better buying decisions: shopping agents compare price, delivery and reviews across many sellers (a form of price discovery).
4. Negotiation and automation of trade: agents negotiate price and terms on behalf of buyer or seller and place orders when conditions are met.
5. Personalisation: agents learn user preferences and recommend products, news or offers.
6. Reduced network load: mobile agents run near the data and send back only results, saving bandwidth.
7. Lower transaction and search costs: automated search and matching reduce cost for both sides.
8. Support for supply chain and CRM: agents monitor stock, trigger reordering, answer customer queries and route support tickets.
9. Scalability and reliability: many agents can work in parallel and do not tire or forget.

Because of these benefits agents are a core technology of e-commerce, search engines and intelligent customer service.

Viral marketing: do we agree?

Viral marketing spreads a marketing message from person to person, like a virus, through email, social media, video sharing and messaging apps. Each recipient passes it on to friends, so reach grows exponentially at very low cost, and the message carries the trust of a friend's recommendation. Examples are the Hotmail "Get your free email" signature, Ice Bucket Challenge and shareable video ads.

I agree only partly. Viral marketing is among the most cost-effective and fast-growing techniques, but it is not the most popular in every case, because virality is hard to plan and cannot be guaranteed, and the brand has little control over how the message changes or whether it spreads at all. Search engine marketing, email marketing and especially paid social media advertising are used far more consistently by most businesses. Viral marketing therefore works best as a supplement to other digital channels, not as the only system.

Types of social marketing (social media marketing)

1. Social networking sites: Facebook, LinkedIn and Instagram pages, groups and paid ads to build communities and reach targeted audiences.
2. Microblogging: Twitter/X posts and hashtags for quick news, customer service and trends.
3. Video sharing: YouTube and TikTok ads, tutorials and brand videos.
4. Blogs and content marketing: articles and guest posts that educate customers and improve search ranking.
5. Photo sharing: Instagram and Pinterest for visual product display.
6. Influencer marketing: well-known personalities promote a product to their followers.
7. Online communities and forums: Reddit, Quora and brand-run forums for discussion and feedback.
8. Social bookmarking and review sites: reviews and ratings (TripAdvisor, Google reviews) that drive trust.
9. Messaging-app marketing: WhatsApp, Viber and Messenger broadcasts and chatbots.
10. Viral marketing: shareable content, referral schemes and challenges.
11. Social media advertising: paid, targeted ads based on user interests and demographics.

Social marketing lets a business engage customers directly, collect feedback and measure results with analytics.

E-branding

E-branding (online branding) is the process of creating and promoting a distinctive identity for a business, product or service on the internet, so that customers recognise it, trust it and prefer it. It covers the name, logo, domain, website design, content, tone of voice and customer experience across web, mobile and social channels.

Process of establishing a branded product online

1. Research and market analysis: study the target customers, competitors and market gaps.
2. Define brand positioning: decide the value proposition, personality, mission and what makes the brand different.
3. Choose the brand identity: name, tagline, logo, colours and a memorable, relevant domain name.
4. Build the web presence: a fast, easy, mobile-friendly website plus social media profiles, all consistent with the identity.
5. Create content: quality text, images and video, blogs and product pages that express the brand message.
6. Promote the brand: SEO, search ads, email, social media, influencers and partnerships.
7. Deliver the customer experience: easy navigation, secure payment, reliable delivery and good support, because experience is what customers remember.
8. Monitor and improve: track traffic, engagement, reviews and brand mentions, and refine the brand.

Elements of e-branding

• Brand name and domain name: short, easy to spell and recall.
• Logo and visual identity: colours, typography and design.
• Tagline/slogan: one line that expresses the promise.
• Website design and usability: layout, speed, navigation and mobile responsiveness.
• Content and tone of voice: the style of communication.
• Customer experience and service: support, delivery, returns.
• Trust and security: SSL, privacy policy and secure payments.
• Social presence and community: engagement and user reviews.

Significance

E-branding builds awareness and recognition, creates trust and credibility in a market where the customer cannot touch the product, encourages loyalty and repeat purchases, sets the business apart from competitors, supports a premium price, makes new product launches easier, and lowers marketing cost over time.

E-payment systems

An electronic payment (e-payment) system lets a customer pay for goods and services over the internet or other electronic networks without cash or cheques. The main types are as follows.

1. Credit cards: the customer buys now and the card issuer bills later, up to a credit limit. Accepted worldwide through a payment gateway. Example: Visa, Mastercard.
2. Debit cards: the amount is taken immediately from the customer's bank account. Example: Nepali bank cards linked to the NepalPay or Connect IPS network, Visa debit.
3. Smart cards: a card with an embedded chip that stores value or identity and data securely. Example: chip-based EMV cards, transit cards.
4. Electronic cash (e-cash / digital cash): value is held as digital tokens that the customer withdraws from a bank and spends anonymously. Example: DigiCash, cryptocurrencies such as Bitcoin.
5. Electronic wallets (e-wallets) and mobile payment: a prepaid account on a phone or in an app, funded from a bank. Example: eSewa, Khalti, IME Pay, PayPal, Google Pay.
6. Electronic cheques (e-cheques): the digital version of a paper cheque, signed digitally and cleared electronically. Example: the ECS and cheque truncation systems of banks.
7. Electronic fund transfer (EFT) / internet banking: direct transfer between bank accounts. Example: Connect IPS, NEFT, mobile banking and QR payment through Fonepay.
8. Micropayments: very small payments (a few rupees) for content such as an article or a song, often handled by prepaid accounts.
9. Payment through third-party gateways: services such as PayPal, Stripe, IME Pay or Khalti that sit between merchant and bank, handling the card details securely.
10. Cash on delivery (COD): not electronic, but widely used in Nepal for online orders.

Security in these systems is provided by SSL/TLS, encryption, digital signatures, one-time passwords (OTP) and tokenisation.

Security challenges in e-business

Because e-business runs on open networks, it faces the following threats.

1. Malware: viruses, worms, trojans and ransomware that damage or lock data.
2. Hacking and unauthorised access: intruders break into servers, databases or accounts.
3. Phishing and spoofing: fake emails or websites trick users into giving passwords or card numbers.
4. Denial-of-service (DoS/DDoS) attacks: the site is flooded with requests so that real customers cannot reach it.
5. Sniffing and man-in-the-middle attacks: attackers intercept data in transit.
6. Data theft and breach: theft of customer records, card data and trade secrets.
7. Payment fraud and identity theft: stolen cards, false orders and chargeback fraud.
8. Insider threats: employees misusing access.
9. Repudiation: a party denies having made an order or payment.
10. SQL injection and other web application attacks.

Security requirements

Confidentiality, integrity, authentication, authorisation, non-repudiation and availability.

Protection measures

1. Encryption: SSL/TLS (HTTPS) for data in transit, and symmetric/asymmetric encryption for stored data.
2. Digital signatures and certificates: prove the sender's identity and prevent alteration, issued by a certification authority (PKI).
3. Firewalls: filter traffic between the internal network and the internet.
4. Antivirus and anti-malware software with regular updates and patching.
5. Intrusion detection and prevention systems (IDS/IPS) to detect and block attacks.
6. Authentication and access control: strong passwords, two-factor authentication/OTP, biometrics and role-based access.
7. Secure payment protocols: SET, 3-D Secure, tokenisation and PCI-DSS compliance.
8. Regular backups and disaster recovery plans.
9. Security policy and staff training: awareness of phishing and safe practice.
10. Audit and monitoring: logs, vulnerability scans and penetration testing.
11. Legal protection: following the Electronic Transactions Act and cyber laws.

E-CRM

Electronic customer relationship management (E-CRM) is the use of internet, web and other electronic technologies (email, social media, mobile, call centres, databases) to acquire, serve and retain customers and to manage all interactions with them. It extends traditional CRM by adding online channels and by integrating data from all channels into a single view of each customer. The aim is to increase customer satisfaction, loyalty and lifetime value at lower cost.

E-CRM toolkit

The toolkit is the set of tools and technologies used to put E-CRM into practice.

1. Customer database and data warehouse: stores profile, purchase history and contact records from all channels.
2. Data mining and analytics: finds buying patterns, segments customers and predicts churn.
3. Website and personalisation tools: user accounts, cookies and recommendation engines that tailor content and offers.
4. Email and campaign management: newsletters, promotions and automated follow-up messages.
5. Self-service tools: FAQs, knowledge base, order tracking and customer portals.
6. Live chat, chatbots and help desk: real-time online support and ticket tracking.
7. Call/contact centre (CTI): integrates telephone, email and chat into one support desk.
8. Social media monitoring and community tools: listen to and engage customers on social networks.
9. Sales force automation and marketing automation: manage leads, quotes and campaigns.
10. Mobile apps and SMS: direct contact with customers.
11. Feedback and survey tools: measure satisfaction and collect suggestions.
12. Integration with ERP/supply chain: shares order and delivery status.

Examples of products: Salesforce, Zoho CRM, HubSpot and Microsoft Dynamics.

E-supply chain

An e-supply chain is a supply chain that uses the internet and information technology to plan, coordinate and control the flow of materials, information and money among suppliers, manufacturers, distributors, retailers and customers. It is also called a digital supply chain or e-SCM. Its aims are lower inventory, faster delivery, fewer errors, and visibility across all partners.

Elements

1. Suppliers: provide raw materials and components.
2. Manufacturer/producer: converts materials into products.
3. Warehouses/inventory.
4. Distributors and wholesalers.
5. Retailers.
6. Customers/end users.
7. Logistics and transport providers.
8. Information systems: ERP, EDI, web portals, tracking.
9. Payment and financial services.
10. Flows: product flow (downstream), information flow (both ways) and financial flow (upstream).

Architecture

The architecture is normally described in layers.

• Supply chain partner layer (bottom): suppliers, manufacturers, distributors, retailers and customers, linked by physical flow.
• Network/communication layer: internet, intranet, extranet, VPN and EDI that connect the partners securely.
• Application layer: modules such as supply chain planning (demand forecasting, production scheduling), supply chain execution (procurement, warehouse and transport management), e-procurement, order management, inventory management and CRM/SRM (supplier relationship management).
• Data/integration layer: common databases, a data warehouse and middleware (ERP integration) so that all partners see the same data in real time.
• Presentation/portal layer: web portal or mobile app giving each partner access to order status, stock levels and shipment tracking.
• Security layer: authentication, encryption and access control across all layers.

Flow of work: the customer places an order on the web portal, the order management system checks stock, triggers production or procurement from suppliers (via EDI/e-procurement), logistics partners deliver, and payment is made electronically, with every step visible to all authorised partners.

Knowledge management

Knowledge management (KM) is the systematic process of creating, capturing, storing, sharing and applying the knowledge of an organisation so that it can improve performance and gain competitive advantage. It deals with both explicit knowledge (documents, databases, manuals) and tacit knowledge (experience and skills in people's heads). Its cycle is create, capture, organise, share, apply.

McKinsey's 7S framework

Developed by Tom Peters and Robert Waterman at McKinsey in the 1980s, it states that an organisation is effective only when seven interdependent elements are aligned. They are divided into hard and soft elements.

Hard elements (easy to define and change):

1. Strategy: the plan for gaining and keeping competitive advantage.
2. Structure: the organisation chart, reporting lines and division of authority.
3. Systems: the processes and procedures used in daily work, such as IT systems, finance and HR processes.

Soft elements (harder to change, shaped by culture): 4. Shared values: the core beliefs and mission at the centre of the model that guide all else. 5. Style: the leadership style and the way managers behave. 6. Staff: the people, their numbers, skills and motivation. 7. Skills: the distinctive capabilities of the organisation and its people.

All seven are linked, so change in one affects the others, and shared values lie in the middle. In knowledge management the framework is used to check whether strategy, structure, systems, culture and people support knowledge sharing, and to find the gaps during organisational change, mergers or the introduction of a KM system.

Cyber crime

Cyber crime is any illegal activity carried out with a computer, a network or the internet, either using them as the tool or targeting them. Examples: hacking, phishing, identity theft, online fraud, cyberbullying, spreading viruses, child pornography, piracy and cyber terrorism.

Cyber law

Cyber law (IT law) is the body of legal rules that governs the use of computers, the internet and electronic transactions. It covers electronic contracts and signatures, privacy and data protection, cyber crime and punishment, intellectual property online and e-commerce. In Nepal it is the Electronic Transactions Act, 2063 (2008) and related rules, which give legal recognition to digital signatures and records and prescribe penalties for computer offences.

Intellectual Property Rights (IPR)

IPR are legal rights given to creators over the products of their mind. The main kinds:

1. Copyright: protects original literary, artistic, musical and software works (books, songs, films, programs) for the author's life plus a fixed number of years. It gives the owner control over copying and distribution.
2. Patent: gives an inventor exclusive rights to a new, useful and non-obvious invention for a limited period (usually 20 years) in return for disclosing it.
3. Trademark: protects a word, logo, symbol or slogan that identifies the source of goods or services. It can be renewed indefinitely.
4. Trade secret: confidential business information with commercial value, such as a formula or process, protected so long as it is kept secret.
5. Industrial design: protects the visual appearance, shape or pattern of an article.
6. Geographical indication: identifies goods whose quality comes from a place, such as Darjeeling tea.
7. Domain name rights: protect against cybersquatting, the registration of another's brand as a domain name.

In e-business, IPR protection matters because digital material is easily copied and distributed.

Architecture of the Internet

The Internet is a worldwide network of networks joined using the TCP/IP protocol suite. Its architecture can be seen as follows.

• Hosts and clients/servers: end devices such as computers and phones (clients) request services from servers (web, mail, DNS), using the client-server model.
• Access networks: how users connect, through dial-up, DSL, fibre, cable, Wi-Fi or mobile data supplied by an ISP.
• ISP hierarchy: Tier-1 ISPs form the global backbone and connect with each other at Internet exchange points (IXP); Tier-2 ISPs buy transit from them; Tier-3 (local) ISPs serve users.
• Routers and switches: forward packets between networks using IP addresses.
• Layered protocols (TCP/IP model): application (HTTP, SMTP, FTP, DNS), transport (TCP, UDP), internet (IP) and network access (Ethernet, Wi-Fi).
• Packet switching: data is split into packets that travel independently and are reassembled at the destination.
• Addressing and naming: IP addresses identify hosts and DNS maps domain names to addresses.

Governance is by bodies such as ICANN, IETF and IANA. This open, layered, decentralised design makes the Internet scalable and robust.

Marketplace and marketspace

A marketplace is a physical location where buyers and sellers meet face to face to exchange goods and services, such as a bazaar, a shop or a shopping mall. Buyers can see and touch the product, bargain in person, and receive the goods at once; but the reach is local, opening hours are limited and costs of rent and staff are high.

A marketspace is a virtual, digital market where trade takes place through the internet and electronic media, such as Amazon, Daraz or an online stock exchange. There is no physical contact; information, product and payment are all digital. It is open 24x7, has global reach, lower costs, easy price comparison and personalised offers, but the buyer cannot inspect the goods and must trust the seller and the security of the system.

The term marketspace was introduced by Rayport and Sviokla.

Knowledge as a key business asset

In the knowledge economy, knowledge has become as important as land, labour and capital, because it is the main source of innovation and competitive advantage. A firm's market value often exceeds its physical assets because of the knowledge held in its people, processes and customer relationships (intellectual capital).

Why knowledge is a key asset:

1. It is hard to copy, so it gives a sustainable advantage.
2. It grows with use and sharing, unlike physical assets that wear out.
3. It drives innovation in products, services and processes.
4. It improves decisions and productivity by avoiding repeated mistakes and reinventing the wheel.
5. It strengthens customer relationships through better understanding of needs.
6. It is the basis of intellectual property such as patents, brands and software.
7. It protects the firm from loss of expertise when staff leave, if captured properly.

Types: explicit knowledge (documents, databases) and tacit knowledge (skills, experience). Knowledge must therefore be managed: created, captured, stored, shared and applied through a knowledge management system, so that it can be valued and used like any other asset.