E-business no longer exists

The emergence of the Internet and the development of complex e-business applications have affected and fundamentally changed the way people conduct business worldwide across all industries. The Internet’s integration into companies’ strategies and the development of sophisticated e-business solutions caused transaction costs to decline, helped to shrink time and information asymmetry1, endowed firms with a new distribution channel and finally established new business ventures such as eBay.com, amazon.com, or google.com (Tucci & Afuah 2003). In addition to that, the Internet and e-business have enabled companies to participate in the worldwide market place, reduced inventory levels, and to benefit from the digitisation of products and services (Tassabehji 2003). Therefore, nowadays the long-term survival of firms depends no longer only on competitive advantages such as economies of scale, but especially on the intuition of adjusting correctly to a continuously changing competitive environment based upon the Internet’s options and e-business.

This essay attempts to give an introduction to e-business and illustrates how e-business influences firm’s business models. It critically evaluates the statement “E-business no longer exists – all business is e-business” and tries to show the implications of this statement for business and management in general.

The Internet can be referred to as a ‘public global network of networks’ (quoted from Tassabehji 2003, Lecture III p.2). In turn, e-business is regarded as the commercial utilization of the Internet structure and its opportunities to conduct business. IBM, as part of a Marketing campaign, originally invented and heavily promoted the expression ‘e-business’ as part of a marketing campaign in 1997 (www-1.ibm.com/ibm/history/history/year_1997.html). Tassabehji (2003) defines e-business as ‘the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners’ (p.5). This definition emphasizes the opportunities the commercial usage of the Internet offers companies in dealing with its external environment. Besides, e-business does not only have external but also internal implications for companies. IBM stresses this and describes e-business as ‘the transformation of key business processes through the use of Internet technologies’ (quoted from http://dotcom.monster.com.hk/articles/5911/).