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Difference Between E-Commerce and E-Business
is the difference between e-commerce and e-business ?
Many magazine and newspaper articles use these terms interchangeably;
however, I believe they are significantly different.
They both refer to conducting business on the Internet, but the key
difference is in the level of commitment that a company elects for its business
over the Internet.
many companies start on the Internet with a static Webpage or brochureware.
Then they become interactive by communicating and supporting their
customers over the Internet.
Next, they attempt some form of transaction over the Internet that begins
with an e-commerce initiative.
Ultimately, most companies will evolve by adopting e-commerce strategies
to remain competitive in their current markets.
Interestingly, e-commerce was not a part of anyones strategic plan 3
years ago not even Microsofts.
Today, in the best companies, the strategic plan is based on new models
of business conducted over the Internet.
is best defined or exemplified when a brick and mortar business decides to add
an Internet based catalog of their products as an adjunct to their core
The business may not fully embrace the Internet as a force that is about
to radically change the heart and soul of their current business, but they may
be seeking to engage the Internet to test e-commerce and to learn more about it.
Brick-and-Mortar businesses become Click-and-Mortar businesses when
they begin to process transactions or take orders over the Internet and
supplement their existing ways of conducting business.
ability to adapt existing analog business models to the Web is many times
difficult and tumultuous because they can interfere and compete with existing
Manufacturers provide a great example of the potential conflicts that can
occur between an existing channel of distribution using distributors and dealers
or a direct sales force and providing order taking over the Internet.
In these instances, distributors, dealers and direct sales forces feel
threatened by the new Internet based implementation and justifiably so.
existing businesses develop an e-commerce strategy it is 70% about adopting new
business models and corporate cultural change and only 30% about technology.
longer a company waits to launch an e-commerce initiative the more difficult it
becomes and the further ahead its competitors become.
The Gartner Group predicts the Web has the ability to replace, rather
than just supplement, traditional methods of business.
This prediction seems to become more valid with every passing day.
is when a company decides to fully embrace the opportunity of the
Internet and completely transform their business models to take advantage of
this new medium.
This will radically change their existing models of business and value
proposition to their customers.
are two primary ways to form an e-business strategy.
First, existing businesses may elect to engage e-business by forming a
separate subsidiary of their current business.
Many times the process of transforming existing businesses to competitive
e-business models is overwhelming and, in fact, impossible.
Barnes and Noble found that when competing with Amazon.com over the
Internet, they were greatly disadvantaged by their existing brick and mortar
In order to compete on a level playing field, they had to spin off their
e-business initiative and perform an IPO so that it could effectively compete
with Amazon, as well as their own brick and mortar business.
being constrained by a parent company and by spinning off a separate business is
a great way to remain competitive on the Internet.
In fact, a new business must be able to compete with and cannibalize its
existing business, if necessary better to cannibalize yourself than leave it
to your competitors.
second type of e-businesses are the new dot.coms that are being funded by
venture capitalists in an effort to capture the new ways of doing business over
In e-business, dot.com competitors tend to work under significantly
different cost models.
The newly emerging dot.com companies that are changing the rules in
almost every market and industry can significantly impact existing methods of
business and value propositions.
The difference between e-commerce and e-business is dramatic. If your company is involved in an e-commerce initiative, you should be on the lookout for the newly forming dot.coms that enter your market. These newly formed e-businesses pose the greatest risk to your existing business due to their different cost structures and value propositions, thus, not your normal competitors.
Brian Pitre is President of Dockside Internet Services, Inc., an
e-commerce development company. He can be reached at email@example.com.
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