Report on E-Business Between China and USA

Introduction

Improvement and change of regular business processes by adopting Information Technology is called e-business. Among the term e-business, the alphabet ‘e’ has been used to indicate electronic network. In simple words, e-business argues to replace human-agent-based paperwork and telephony communicated individual transactions with transactions via electronic networks and e-money in exchange for traditional currency and letters of Credit. Thus e-business is a complete framework of product, service, and informational stream to buy and sell.

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E-business has turned the business community to drive quick automation to face the challenge of globalization. The advent of the Internet has to a great extent increased the capability of companies to carry out their business more accurately and faster over a wider assortment of time and space. The Internet has also reduced the cost of communication and traditional marketplace with the ability to customize and personalized customer offerings.

Innumerable companies have already set up Web sites to inform and promote their products and services and every day more and more companies are getting entry. They have created Intranets to facilitate employees communicating with one another and to facilitate downloading and uploading information to and from the company’s computers. Companies have also set up Extranets with major suppliers and distributors to facilitate information exchange, orders, transactions, and payments.

Relationship among E-Business, E-Commerce, and E-Marketing

E-business is the continuous optimization of a firm’s business activities through digital technology. Digital technologies are things such as computers and the Internet, which allow the storage and transmission of data in digital formats (1s and 0s). E-business involves attracting and retailing the right customers and business partners. It permeates business processes, such as product buying and selling. It includes digital communication, e-commerce, and online research, and it is used by every business discipline.

E-commerce is more specific than e-business, it means that in addition to providing information to visitors about the company, its history, policies, products, and job opportunities, the company or sites are still just providing information, not doing e-commerce. E-commerce has given rise in turn to e-purchasing and e-marketing. E-purchasing means companies decide to purchase goods, services, and information from various online suppliers. Smart e-purchasing has already saved companies millions of dollars. E-commerce is the subset of e-business focused on transactions.

E-marketing is the use of information technology in the processes of creating, communicating, and delivering value to customers, and for managing customer relationships in ways that benefit the organization and its stakeholders. More simply defined, e-marketing affects traditional marketing in two ways. First, it increases efficiency and effectiveness in traditional marketing functions. Second, the technology of e-marketing transforms many marketing strategies. The transformation results in new business models that add customer value and or increase company profitability. Markets always welcome an innovative product as long as it provides customer value. Nevertheless, marketers want to know which of their time-tested concepts will be changed by the Internet, databases, wireless mobile devices, and other technologies. Marketers wonder about three things:

  • Which technology investments will be effective and efficient?
  • How are markets and marketing practices fundamentally changing due to new technologies?
  • How will technology change things in the future?

E-Business strategy

The term strategy means to achieve goals. E-business strategy is the deployment of enterprise resources to capitalize on technologies for reaching specified objectives that ultimately improve performance and create sustainable competitive advantage. Thus, when corporate-level (also called enterprise-level) business strategies include information technology components (Internet, digital data, databases, and so forth), they become e-business strategies.

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E-marketing strategy is the design of a marketing strategy that capitalizes on the organization’s electronic or information technology capabilities to reach specified objectives. In essence, e-marketing strategy is where technology strategy wed to form the organization’s e-marketing strategy. Most strategic plans explain the rationale for the chosen objectives and strategies. They are especially important for a single e-business project trying to win its share of corporate resources and top-management support. Kalaota and Robinson (1999) suggest four appropriate types of rationale:

  1. Strategic justification shows how the strategy fits with the firm’s overall mission and business objectives, and where it will take the firm if successfully accomplished.
  2. Operational justification identifies and quantifies the specific process improvements that will result from the strategy. For example, if CRM (customer relationship management) software is proposed, how will that translate to increased customer retention and higher revenues?
  3. Does technical justification show how the technology will fit and provide synergy ability along the currently integrated supply chain?
  4. Financial justification examines cost or benefit analysis and uses standard measures such as return on investment (ROI) and net present value (NPV).

E-Business Models

E-business model is a method, by which the organization sustains itself in the long term using information technology, which includes its value proposition for partners and customers as well as its revenue streams. For example, the Internet allows media, music, and software firms to deliver their products over the Internet, creating a new distribution model that cuts costs and increases value. E-business models successfully take advantage of the Internet properties.

E-business models can capitalize on digital data collection and distribution techniques without using the Internet. For example, when retailers scan products and customer cards at the checkout, these data can become a rich source of knowledge for inventory management and promotional offers- e-marketing without the Internet. Even though the Internet spawned the vast majority of e-business models, it is important to remember that e-marketing and e-business models may operate outside the Internet.

The authors of Internet Business Models and Strategies suggest the following components as critical to appraising the fit of a business model for the company and its environment (Afuah and Tucci, 2001):

  • Customer value: Does the model create value through its product offerings that are differentiated in some way from that of competitors?
  • Scope: Which markets does the firm service, and are they growing? Are these markets currently served by the firm, or will they be higher-risk new markets?
  • Price: Are the firm’s products priced to appeal to markets and also achieve company share and profit objectives?
  • Revenue sources: Where is the money coming from? Is it plentiful enough to sustain growth and profit objectives overtimes? Many dot-com failures overlooked this element.
  • Connected activities: What activities will the firm need to perform to create the value described in the model? Does the firm have these capabilities? For example, if 24/7 customer service is part of the value, the firm must be prepared to deliver it.
  • Implementation: The Company must have the ability to actually make it happen, which involves the firm’s systems, people, culture, and so on.
  • Capabilities: Does the firm have the resources (financial, core competencies, etc.) to make the selected models work?
  • Sustainability: The e-business model is particularly appropriate if it will create a competitive advantage over time. Will be difficult to imitate and will the environment be attractive for maintaining the model over time?

E-Business integration

Ethical and legal issues of E-Business

Ethics makes important contributions to legal developments- sometimes by influencing legislators, judges, and other lawmakers, and other times, by being directly sought out by these groups for opinions and advice. Likewise, the law’s ability to sift through arguments and arrive at practical and acceptable conclusions can aid ethical inquiry. In the area of digital marketing, the role of ethics is particularly important because the experiences and practices of those who work in the field are particularly helpful to those who are charged with regulation and legal decision-making.

In the study of them, ethical and legal issues are often treated as separate, often unrelated subjects. In reality, ethics and law are closely related. Ethics frequently concerns the values and practices of professionals and others who have expert knowledge of a specific field. Ethics is also a general endeavor that takes into account the concerns and values of society as a whole.

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The concept of privacy encompasses both ethical and legal aspects. It is also relatively new to both disciplines. Perhaps more than any other legal or ethical issue, privacy is a product of the twentieth century. Although many cultures follow established customs of social boundaries, detailed consideration of this subject did not come about until 1890. On an international level, privacy issues have received close attention. On October 15, 1998, the European Union’s (EU) Data Protection Directive took effect, requiring its member states to enact national laws to protect “fundamental rights and freedoms of natural persons, and in particular their right to privacy with respect to the processing of personal data”. The directive’s provisions require that:

  • Subjects are apprised of how their data are used and be given opportunities to review and correct information.
  • Data use be restricted to announced purpose.
  • The origin of data is disclosed, if known.
  • Procedures to punish illegal activities be established.
  • Consumer collection contains opt-out capabilities.
  • Sensitive data collection cannot be accomplished without explicit permission.
  • Any international transfer of data is executed only with countries possessing adequate privacy protection laws.

Although approaches to the electronic privacy challenge vary and promise to remain debated far into the future, the following norms, identified by the FTC represent a consensus regarding the minimum requirements in the ethical use of consumer information:

  1. Notice: Users should be aware of a site’s information policy before data are collected.
  2. Consent: Users should be allowed to choose participation or exclusion from the collection.
  3. Access: Users should have the ability to access their data and correct them if erroneous.
  4. Security: Policies to ensure the integrity of data and the prevention of misuse should be in place.
  5. Enforcement: Users should have effective means to hold data collectors to their policies.

Analysis for E-business between China and USA

To compare the e-business of China and the USA it is necessary to evidence both countries overall online business situation including their infrastructure, trading situation, Online banking development, companies’ involvement, visitors, and total gain in revenues. Both the USA & China has significantly developed e-business. But the USA is the pioneer in technology and has a strong infrastructure. At the same time, China is a resourceful country with the world’s highest Human Resources and innovative thinking. Raise of China is almost a threat to the rest of the world. China’s integration of E-business is also more lucrative.

E-business connecting China and USA a compare between their on-line banking as a part of e-business has expressed here as a paradigm. Already financial services in the course of the Internet had an insightful effect even if it is not the way of the future. Most profoundly banking has turned into pretentious by the Internet. The network technologies once and for all modified the way of business. Online banking service has exceptionally brought a number of advantages such as highly well-organized, secure, economical, and is more convenient. At the present, it has nurtured to be a fondness of online banking as well as offline services to take on board the world’s financial and banking division.

In China and the USA, brisk expansions have been experienced in their e-business as a developed form of e-business through building customer loyalty and promote reiterate dealings though there manage to survive a discrepancy in the quality of customer service. To provide superior service it is necessary to understand customer requirements and continuous improvement of their service. Uses of the Internet and e-business improvement China insulates than the USA in different economic levels and technological improvement though a rapid growth has China’s online banking service. This study expressed encompasses China and the USA’s online banking service quality. Key issues that distinguish the quality of these countries online banking services are explained in the following chart:

Point to distinct E-business of USA E-business of China
1. Practical understanding of e-business The USA is the pioneer of introducing Information Technology and its business application. Among overall the citizens there is a Presence of practical understanding of e-business. China is next to the USA in IT development. Though there is the absence of practical understanding of e-business among the overall citizens, the business community and educated part of the population has been quickly driving to e-business.
2. Framework to support e-business The USA Provides a proper framework to support e-business. It’s Banking, Hardware, Software, and R&D are stronger than any other country to support e-business. Still now China has a shortage of proper frameworks to support e-business in relation to the USA. Up to now, partial of its banks support e-business, when software and hardware are quickly flourishing.
3. Easy access to cost-reducing e-business growth There is no complication to cost-reducing e-business growth. But there is a high cost of implication which drives the country for outsourcing. Lower developed countries including China is Jack’s pocket to serve the USA to meet its Outsourcing needs. China is Raising the tiger in the world economy. Shortages of easy access to e-business growth for the local community due to most of the IT firms are busy serving USA Outsourcing service rather than serving in the national market.
4. Price in simple application solution Evenhanded price in simple application solution is very high in the USA Evenhanded price in simple application solution is very low in China which attracts the major players of USA to Outsourcing from China.
5. Security parameters and reliability Well-heeled security parameters and reliability. Insecurity aspect China is a real threat. Most of the Chinese Hackers raising new threats.
6. Resource to maintain and execute e-business There are available resources to maintain and execute e-business. At present, there are some deficiencies of resources to maintain and execute e-business. But gradually the Banks and financial organizations are driving to e-business financing.
7. Authorized and rigid outline Supplement authorized and rigid outline. Squat authorized and rigid outline.
8. Online payment and official recognition Adequate facilities of additional components such as online payment and official recognition. Most of the renowned Online payments Systems are owned by the USA. Absence of additional decisive elements such as– online payment and official recognition. But China has no established payment system. Though Alibaba has introduced someone, still there is a priority of Pay pal.
9. Equipment principle To confirm interoperability of their available equipment principles. For interoperability, there are no equipment principles yet in China.
10. Human Resource There is a lack of Trained Human Resources to coup the challenge of e-business. But China is a more resourceful country. Most of the IT Firms of the USA are setting their office in China for low-cost Human Resources.

For more clarification of online services of China and the USA here present another example of their e-business that is Alibaba of China and eBay of the USA as below.

Empirical Evidence of Alibaba and eBay

Alibaba

Chaired by Ma Yun Alibaba Group was established in 1999 as a China-based E-business portal as an SME company. The company achieved vigorous expansion within a short time and at this moment, it has turned into China’s prevalent e-commerce company and the world’s prime business-to-business (B2B) podium for global online trade. Alibaba is the owner of Alibaba China, Alibaba International, Taobao, and Alipay. In October 2005, Alibaba also purchased Yahoo China and promoted its business assortment simultaneously commencing online marketplace as well as to Internet search.

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Currently, the company would like to derive services such as consultation, finance, insurance, shipping, and delivery that would hang about strapping in the upcoming years. Would also position Alibaba online unquestionably get together with a lot of individual anticipation and prospects. Right now Alibaba worked first and foremost, as a product not at all service matchmaker for sellers and buyers of outer surface China. Almost 90% of China’s SME enterprises and manufacturers make use of Alibaba to trade in the global perspective.

At the present status, more than 500,000 visitors visit Alibaba International every 24 hours. Alibaba is eager to put forward an overall of 100 million jobs within the next small number of years in China. Including graduates and university students are registering to open their online shops in Taobao that is the sister concern of Alibaba. The number of University graduates is rising thousands and thousands. Alibaba really turned the main end-user e-commerce web in Asia pacific region. The number of registered users amounted to more than 27 million.

Chairperson Alibaba Ma Yun addressed “E-commerce will become an indispensable part of people’s daily life in a decade. …. In ten years e-commerce will be completely integrated into people’s lives just like water and air, electricity and public transportation, I believe that in five years, 80 percent of the people in the world will use e-commerce in their daily life1

eBay

eBay referred to”ebay.com” which was established in 1995 as a sole proprietorship organization eBay. It turned to incorporation in 1996 in San Jose, California. EBay’s internet payment system platform is renowned as “paypal.com”. eBay has a strong infrastructure. eBay has its own payment method, which Alibaba doesn’t have. As a prime e-marketplace, eBay is the world’s largest trading group of people where millions of people buy and sell millions of items every day. Like Alibaba, it has also facilitated the students and home-based workers to generate online earnings.

EBay’s success has been for the most part reliant on the lead success of our community of registered members. The grown of registered members was two million in 1998. But in 2003 it becomes more than 94 million. In 2004 it turned into to further 135 million.

Collage Student at eBay

eBay offers very lucrative opportunities for college students. They can easily open an account with eBay. eBay permits students to obtain a report of their eBay account including selling, buying, bidding, earning reports, and so on. Students with their own website may also post links to eBay and list the items which they would like to sell. eBay also offers ‘About Me’ that gives students the opportunity of creating their own personalized home page without any cost. eBay also provides step-by-step instructions to create more traffic on its site to generate more revenues.

Tremendous numbers of college students buy and sell at a discounted rate and can also take part in online auctions. eBay demonstrates that 12 million items in 18,000 categories members transacted more or less $15 billion in the year 2002. Collage Students have everything on eBay to involve from antiques to stamps even their used books and tickets

Ebbert at eBay stated, “If there’s something you want, and you don’t have a lot of money to spend, especially as a college student, you can probably find it for less on eBay … You get more of a selection, and you can almost always find the things you want.”(Bills, Sarah 1-2).

Conclusion

Starting from 1995, E-Business is an innovative way out of performing business activities and it continues to spread out swiftly all around the world. In 1995 the first year of operation it has grown the USA with retails sales of $172 billion and its business-to-business turnover was $1.5 trillion. E-Business would ultimately pressure nearly all commerce of trade and commerce would be shaped take into the form of Electronic Business in very near future. From the analysis of e-business of these two countries, USA provides better quality than China. China’s technological and economical level is the obstacle of its insulate. By removing these difficulties China can go ahead in its e-business and established itself as a strong competitor in the world of E-business.

Bibliography

Yeung, Jonathan. Alibaba to grow as e-commerce becomes popular. Web.

Strauss, Judy. El-Ansary, Adel. Frost, Raymond, E-marketing, 4th ed, Prentice Hall, London, 2006, ISBN: 81-203-3032-3 pp. 23-30, pp. 56-90.

Kotler, Philip, Management, 11th ed, Prentice Hall, Upper Seddle River, New Jersey, 2003, ISBN: 0-13-0336297, pp. 376-365

Dodor, Jean Baptiste K., Dharam S. Rana. Predicting Business Schools’ Intentions To Offer E-Business Degree Programs, Journal of E-Business: Volume VII, No 2, 2007, pp. 7-11.

Kalakota, Ravi., and Whinston, Andrew. Electronic Commerce: A Manager’s Guide. Addison Wesley Publication, Inc. Menlo Park, California, 1996, ISBN-10: 0201880679, pp 231-238, pp 382-401.

Afuah, Allan. Christopher L. Tucci, Christopher Tucci (2001). Internet Business Models and Strategies, 2nd ed, McGraw Hill International Editions, Irwin; ISBN-10: 0072511664, pp.356-386.

Bills, Sarah. Students Flock to Sell on EBay. Web.

Footnotes

  1. Jonathan Yeung (2006).
  2. Bills, Sarah (2003).
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