Introduction to
eBusiness & eCommerce

eBusiness (Electronic Business) refers to the conduct of all business processes and transactions using digital technologies — including the internet, computer networks, and mobile devices. It encompasses marketing, buying, selling, delivering, servicing, payment, supply chain management, and customer relationship management across digital networks.

eCommerce is a subset of eBusiness that specifically refers to the buying and selling of goods and services online. eBusiness is broader: it includes eCommerce but also covers internal business processes, HR systems, ERP, CRM, and partner collaborations that may not involve direct commercial transactions.

The key ICT forces that enabled eBusiness include:

• Exponential growth in computing power — microprocessor capability has grown dramatically, enabling complex processing at low cost
• Massive increases in storage capacity and bandwidth — from electromagnetic to optical storage, capacity improved 10× to 10,000×
• The Internet and World Wide Web — provided a universal, non-proprietary network connecting businesses globally
• Plummeting transaction costs — internet banking transactions cost ~$0.10 compared to $1.07 at a physical branch

eBusiness is classified based on the parties involved in the transaction:

• B2C (Business-to-Consumer): Businesses sell directly to end consumers online. Example: Amazon, Daraz, Dell's online store. Dell allows customers to custom-configure PCs, receive money before shipping, and track deliveries — all digitally.
• B2B (Business-to-Business): Companies transact with other companies. Example: Cisco providing networking solutions to Microsoft. Goals include increasing worker productivity, improving customer service, and gaining competitive advantage through inter-business digital collaboration.
• C2C (Consumer-to-Consumer): Individual consumers sell to other consumers via a platform. Example: eBay, where individuals list and bid on items. The platform facilitates the transaction without being a seller itself.
• B2G (Business-to-Government): Businesses sell to government entities through digital procurement portals. Example: Victorian Government eTenders portal where suppliers bid for government contracts.
• C2B (Consumer-to-Business): Individuals offer services or products to businesses. Example: Fiverr, where freelancers offer digital services to companies purchasing them.
• G2B / G2C / G2G: Government interactions with businesses, citizens, and other governments respectively, such as tax portals and public service delivery systems.

Key Advantages:

• Global reach: eBusiness removes geographical limitations, enabling access to international markets without physical stores.
• Cost savings: Eliminates overheads such as rent, utilities, and in-store staffing. Process automation reduces labour costs.
• Improved customer experience: 24/7 availability, online tracking, live chat, and personalised recommendations increase satisfaction and loyalty.
• Greater flexibility: Products, prices, and offerings can be updated rapidly in response to market changes.
• Levelled competition: Smaller firms can compete effectively against large corporations by leveraging digital technologies at lower cost.
• Data analytics: Vast customer behaviour data enables smarter marketing, product development, and decision-making.

Key Disadvantages (and their strategic significance):

• Security risks: Data breaches, hacking, and identity theft are not just operational issues — they can permanently damage brand trust and result in legal liabilities.
• Infrastructure dependency: Requires continuous investment in hardware, software, and reliable high-speed internet. Downtime translates directly to lost revenue.
• Lack of personal interaction: Relationship-building and trust — critical in high-value B2B or service sectors — are harder to achieve digitally.
• Heightened competition: Lower barriers to entry mean established businesses face continuous disruption from new digital entrants.
• Technical complexity: System failures, bugs, and integration challenges can cascade across the entire digital operation.

The eBusiness environment is modelled as two interacting layers — internal and external — with forces pushing in from both directions.

Internal Environment consists of factors the organisation controls:

• The 7S Framework elements: Shared Values, Strategies, Staff, Skills, Systems, Style, and Structure
• Board of Directors, employees, and shareholders who set direction and culture
• Internal IT systems including ERP, CRM, and operational processes

External Environment consists of forces the organisation must respond to:

• Market & Customers: Changing consumer expectations, online behaviour, and demand patterns
• Competitors: Both traditional rivals and new digital entrants disrupting the market
• Suppliers & Financial Institutions: Digital supply chain integration and fintech relationships
• Government & Regulatory Agencies: Data protection laws, digital taxation, cybersecurity regulations (analysed via PESTLE — Political, Economic, Social, Technological, Legal, Environmental)
• Interest Groups & Outsourced Companies: Third-party service providers and advocacy bodies

A sound eBusiness strategy must continuously audit both layers: internal readiness (eReadiness) and external opportunity/threat analysis, as covered in the 7Es eTransformation model.

Society has undergone three major transformations, each reshaping how businesses and customers interact:

• Agricultural Society (pre-1750): Decentralised, local interactions. The six pillars — soil, water, climate, seed, tools, and peasants — defined production. Business interactions were direct and geographically constrained.
• Industrial Society (1750–1970): Adam Smith's division of labour (Wealth of Nations, 1766), Henry Ford's assembly lines, and Alfred Sloan's management structures created hierarchical, centralised, mass-production organisations. Characteristics included standardisation, specialisation, synchronisation (9-to-5 work), concentration, and centralisation. Customer interaction was mediated through dealers and physical retail.
• Information Society (2000–present): ICT enables networked, decentralised, and real-time business interactions. The transition — Commerce → eCommerce, Business → eBusiness, Government → eGovernment — is termed eTransformation.

Value Chain & Customer Interaction Evolution:

In the past, customers interacted only through an intermediary "information officer." Today, eBusiness enables direct, multi-channel interaction across the full value chain:

• Supplier → Distributor → Manufacturer → Reseller → Customer
• eBusiness enables value chain collaborations, where multiple supply chains overlap and share data, enabling mass customisation, direct-to-customer models, and real-time fulfilment.
• Modern interaction models include: Online Marketplaces (B2C / C2C platforms), Retail Sales (direct digital storefronts), and B2B portals (digital inter-business transactions).