Emerging modes of business is an essential chapter of business studies class 11 syllabus. A thorough study of the chapter will enlighten the budding entrepreneurs with a core understanding of how the world of business has seen exponential advancements and reshaping over the century. Hence, it is vital to be familiar with this chapter to ace scholastic exams as well as to develop a sound understanding of the latest modes to carry out a business plan. So, let us go through this blog containing simplified notes on the topic.
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Emerging Modes of Business
The transformation in the business world can be traced back to the evolution of the Internet. The world wide web has revolutionised how businesses function today, keeping pace with a mammoth rise in internet usage and fast-changing consumer behaviour. Hence, as per the 5th chapter of business studies, the emerging modes of business are e-business, e-commerce and outsourcing. All the modes have their own features and advantages, let us study them in detail.
E-business is one of the biggest examples of how the business world has evolved in modern times. The conduct of trade, commerce and industry via the computer network suing internet is called e-business or electronic business. It is a broad term that encapsulates all business functions and transactions that are conducted electronically, and not merely sales. From e-commerce to digitally-conducted product development, production, inventory management, finance, human resource management and accounting – all come under the purview of e-business.
Features of e-Business
Discussed here are the key features of e-business that students will learn in class 11 emerging modes of business chapter:
- No geographical boundaries; opportunity to conduct business digitally across the world
- Easy to set up; minimal infrastructure setup cost involved
- Consumers can purchase your products and services at any time and from anywhere in the world
- Flexible business hours, tailored to fit consumers’ GMT position and online shopping behaviour
- No direct communication between the business and its consumers
- More prone to cyber threats and security breaches than traditional business
Benefits of e-Business
As mentioned in the chapter, students will also gain knowledge of the reasons why the e-business model has surfaced and achieved popularity. Here are some benefits of e-business-
- Easy and Fast to Set Up: Mostly, setting up an electronic business requires high-speed internet connectivity, computer devices, and advanced software system
- Not Limited by Geographical Boundaries: There are no geographical barriers in an e-business. Anyone can buy things from anywhere, provided the business has services in that region
- Economical: It does not involve the cost of setting up a traditional business and is, therefore, more cost-effective
- Government Subsidies: To promote digitalisation, the government often provides subsidies and other advantages to e-businesses
Limitation of e-Business
Despite being one of the fastest emerging modes of business, e-business has some drawbacks as well. The limitations of e-business according to emerging modes of business are:
- Lack of Trust: The disadvantage of e-business is it lacks direct communication between the seller and the buyer. The consumer is unable to touch and feel the product in real-time. This can result in distrust and apprehensions
- Security Threats: The personal and financial data of consumers are always on stake if the e-business does not have proper security measures. It is easier for scammers to lure online buyers into a lucrative deal and do fraud
- Delivery Issues: Longer delivery times than traditional business is another limitation of this model
Another important topic in class 11 emerging modes of business is e-commerce or electronic commerce that refers to the process of trading over the internet and encompasses diverse concepts like online shopping, digital banking, online ticket booking, social networking, etc. Setting up an e-commerce business requires a website (e-commerce store) where products are displayed with descriptions, and buyers can purchase through payment gateways like Razor Pay, CC Avenue, Authorize.net, etc.
Types of e-Commerce Business
According to this chapter, mentioned below are the types of e-commerce businesses that students will learn. Let us have a look at them-
- Business-to-Consumer (B2C): In this e-commerce model, business transactions are conducted directly between the company and customers who are the end-users of the products and services. For Example: Amazon, Wal-Mart, Flipkart, etc.
- Business-to-Business (B2B): When digital transactions or trading happens between two businesses, it is termed as B2B e-commerce business. For Example: inviting tenders, commercial negotiations, collaborations, etc.
- Consumer-to-Consumer (C2C): When both the parties to e-commerce trading are customers – with no established marketplace – it is called C2C commerce. For Example: Quikr, OLX, etc.
Once you are familiar with e-commerce and e-business, the 5th chapter based on emerging modes of business brings on the discussion on outsourcing. On average, 4 out of 5 top 500 companies in the world outsource their operations to India. Understanding the concept of ‘outsourcing’ is important as an emerging model of business, and therefore, it is a vital topic of business studies. Outsourcing is a process of contracting a specific business function or operations to specialised agencies. Typically, non-core areas like software development, content writing, client communication, etc. are outsourced to a company that holds more expertise and resources. This enables the company to focus better on its core business and improve the bottom line.
Advantages of Outsourcing
To understand better the concept of outsourcing, you must study in-depth the advantages of outsourcing as mentioned in the chapter.
- Cost Advantage: By outsourcing, companies can save their cost, time and effort in hiring and training a permanent in-house skill
- High-Quality Services: Only a skilled expert with in-depth knowledge in the respective field is assigned the task to ensure improved quality and fewer errors
- No Setup Cost: In an offshore model, where the company outsources to an overseas agency, there is typically no cost involved in setting up the infrastructure or owning the latest software.
- Reduced Labour Cost: Companies outsource because the labour cost is cheaper in the outsourcing country
Disadvantages of Outsourcing
In business studies class 11 chapter, students also have to learn the limitations of outsourcing model:
- Poor Quality: Not hiring the right outsourcing company can often result in inferior-quality services and extension of project delivery deadlines
- Lack of Communication & Control: In an offshore model, poor communication and lack of control over business operations are major impediments
- Security Threats: Business-critical data is often under the threat of security breaches
Business Process Outsourcing
As a company grows, the complexities and scope of its business also increase. As such, it becomes cumbersome and costly to manage diverse functions and operations efficiently. To overcome the challenges of the scale of business and leverage the potential of specialisation, many companies choose Business Process Outsourcing (BPO). The scope of BPO is broad and can range from financial services to customer support, advertising, courier, software solutions, etc.
Knowledge Process Outsourcing
An important field of learning in emerging modes of business class 11 chapter, Knowledge Process Outsourcing (KPO) is the conduct of acquiring high-end knowledge & skills from outside the company to help run the business successfully and profitably. Unlike the BPO model, in KPO, the primary focus is to outsource “knowledge” and “expertise.”
Hopefully, through this blog, we have successfully provided you with comprehensive knowledge of Emerging Modes of Business. Are you feeling sceptical about choosing the right career field? Reach out to our Leverage Edu career experts and they will assist you with the best knowledge. Hurry up! Book an e-meeting now.