34. Give a comparative study between e-business and traditional business(long question according to 6marks)
Answers
Answer:
Basis of Distinction
Traditional Business
E-Business
1. Cost of setting up
• High
• Low, as be requirements of physical facilities.
t. 2. Operating cost
• High, due to fixed charges associated with investment in procurement & storage, production, marketing and distribution facilities.
• Low, as a result of reliance on net work relationship rather than ownership of resources.
3. Nature of contract with the suppliers and the customers.
• Indirect, through intermediaries.
• Direct
4. Nature of Intend communication.
• Hierarchial from top level management to middle level management to lower level management to operatives.
• Non-Hierarchial allowing direct vertical, horizontal communication.
5. Response time for meeting customers.
• Long
• Instantaneous.
6. Shape of the organisational structure.
• Vertical/Fall, due to hierarchy or chain of command.
• Horizontal/flat due to directness of command and communcation.
7. Business processes and length of cycle.
• Sequential precedence succession relationship i.e. purchase-production/ operation marketing sales. The business process cycle is therefore logner.
• Simultaneous different processes, Business process cycle is therefore shorter.
8. Opportunity for inter personal touch.
• Much more
• Less
9. Opportunity for physical pre-sampling of products.
• Much more
• Less, however for digital products such an opportunity is tremendous.
10. Ease of going global
• Less
• Much, as cyber space is truly without boundaries.
11. Government patronage.
• Shrinking
• Much, as IT sector is among the top most priorities of govt.
12. Nature of Human Capital.
• Semi skilled and even man power needed.
• Technically and professional qualified personnel needed.
13. Transaction risk.
• Low due to arm is length transactions and face to face contact.
• High due to the distance and anonymity of parties.
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