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Syllabus E. Technology And Data Analytics E3. Principles of e-business

E3ab. Meaning & Scope of e-business

The Meaning of e-business

Using internet technologies for key business processes


Electronic information exchanges between the company and  its external stakeholders

  • B2B (business to business) - e.g. Supermarkets systems automatically placing orders when stocks are low

  • B2C (Business to Consumer) - Selling over the internet (

  • C2B - Groupon - consumers together buying from a business

  • C2C - Ebay

Technology has helped rigid functional and divisional structures to be replaced by matrix and network systems.

New work patterns have emerged that encourage flexi-working and other family friendly measures.  Many business processes are now automated.

Enterprise Resource Planning Solutions (ERP Systems) are now widely available providing management with information that is available almost instantaneously.

Whilst Information Technology may be in fact used as a core competency, it needs to be applied judiciously to suit the specific business needs

The impact of IT on each of Porter’s five forces:

  1. Rivalry 
    Use IT to reduce the effects of tough competition

    Eg.Tour Operators can compare their price competitiveness by accessing the web-sites of other providers on the internet accordingly.

  2. Threat of new Entrants  

    Sophisticated IT applications are expensive & slow to develop whilst being technologically challenging. On the other hand, IT reduces distribution costs for other industries.

    Eg MP3 has created a seismic shift in the music industry by penetrating at a very low cost into an on-line distribution channel compared to its brick and mortar competitors

  3. Supplier Power
    Increased access to different suppliers decreases the power of the suppliers

  4. Customer Powers
    Increased knowledge of the market through the Internet has increased the bargaining power of consumers

  5. Threat of Substitutes  

    Using computer-aided design & manufacture to develop new products first