7 Emerging Opportunities in Business

Emerging Opportunities in Business

Traditionally entrepreneurial opportunities have been exploited in manufacturing, trade and service sectors. In the contemporary business environment, entrepreneurial opportunities exist in several new areas such as franchising, network marketing, business process outsourcing and E-business.

Franchising

Concept of Franchising

The term ‘franchise’ means an arrangement under which a manufacturer grants to an individual or an enterprise the exclusive right to sell the former’s product or service in a specified locality subject to the terms and conditions of the agreement. The firm which grants the right is called “franchiser.” The person or enterprise to which the right is granted is known as the “franchisee” or franchise holder. The agreement which contains the terms and conditions of sale by the franchisee is franchise agreement.

The terms and conditions of a franchise vary widely. But generally, the franchiser agrees to maintain a continuing interest in such areas of the franchisee’s business as site selection, staff training, financing, marketing and promotion. He also allows the use of his brand or trade name, and standard operating procedure. In return, the franchisee agrees to operate under the specified conditions. He makes capital investment in the business, promotes and sells the product in the specified manner and agrees to pay commission or royalty to the franchiser.

Thus, franchising is a contractual relationship between a franchiser and a franchisee. McDonald (fast food chain), Bata (shoes), NIIT (computer training) and Apollo Clinics (Healthcare), are some examples of franchising in India.

Features of Franchising

The salient features of the franchising system are given below:

(i) Two Parties. In a franchise there are at least two sides-the franchiser and the franchisee. There can be more than one franchisee.

(ii) Written Agreement. There is an agreement in writing between the franchiser and the franchisee.

(iii) Exclusive Right. The franchiser owns a brand or trade mark and allows the franchisee to use it in a specific area under a license.

(iv) Payment. The franchisee makes an initial payment for the license and becomes a part of the franchiser’s network. He also pays a regular license fee which may be an agreed percentage of sales and profits.

(v) Support. The franchiser provides assistance to the franchisee in marketing, equipment and systems, staff training, record keeping. The franchisee initially sets up the business to be run by the franchisee.

(vi) Restrictions : The franchisee is required to operate the business in accordance with the policies and procedures specified by the franchiser. He gives an undertaking not to carry on any competing business and not to disclose confidential information regarding the franchise. The franchiser cannot terminate the agreement before its expiry except for ‘good cause’.

(vii) Specified Period : The agreement is a for a specific period, e.g., five years. On the expiry of this period, the agreement may be renewed with the mutual consent of both parties.

Advantages of Franchising

To the Franchiser

1. The franchisor can enter into foreign markets and new territories in the domestic market safely and easily.
2. The franchisor can expand his business without investing a large amount of money. The cost of new premises and extra staff is done by the franchisee.
3. A regular income is received by way of royalty or fee from franchisee.
4. With expansion of business, the franchiser can obtain economies of scale through bulk buying from suppliers.
5. The franchisees have a financial stake in business. Therefore, they are likely to work very hard to make them succeed.
6. The franchiser retains control over the franchisees.
7. The franchiser can increase his goodwill by expanding his network. His brand name becomes popular.
8. The franchiser gets feedback about the needs and preferences of customers from the franchisees.

To the Franchisee

1. Support and advice is available from the franchiser in respect of staff training and marketing. Such support is available not only in the initial stages but also on a continuing basis.
2. The franchisee can start his business with less initial investment than what is required without a franchise.
3. The franchise gains from the established name, brand, quality control and national advertising of the franchiser
4. The chance of failure is minimum due to proven success of the product and its secure place in the market. Franchising allows people to start and run their business with less risk.
5. Banks are more willing to lend money to a franchisee because documented information relating to the success of other franchisees with the same product or service is available.
6. The franchise gains from the franchiser’s huge investment in research and development, product and process innovations, etc.

Disadvantages of Franchising

To the Franchiser

1. The franchiser’s trade name and reputation may be tarnished if the franchisee does not maintain standards of quality and service.
2. The franchiser has to provide initial financial assistance and specialist advice.
3. There are ongoing costs of supporting the franchisee and national advertising.

To the Franchisee

1. The franchisee does not have complete independence in his business.
2. The franchisee has to make payment of royalties on a regular basis.
3. In some cases the franchisee is required to buy all supplies from the franchiser even though cheaper local alternatives may be available.
4. The franchisee may not be able to sell the business without the franchiser’s
5. approval.
6. Working of Franchising System

Franchising system depends upon a continuous contractual relationship between the franchiser and franchisee. The franchiser may be a manufacturer or a service organisation. The franchiser is an independent business firm which buys the right to run and operate a business by using the franchiser’s brand name or trade mark.

A franchiser agreement is based on a unique product or service owned by the franchiser. The working of franchising system is shown in the following figure.

The success of a franchising system depends upon mutual faith and trust between both the parties.

Business Process Outsourcing (BPO)

The idea of business process outsourcing originated from the theory of core competence suggested by C.K.Prahlad. According to this theory a business enterprise should identify the areas of its core competence and focus only on them. In order to utilise its strengths and resources fully for its competencies, a corporation has to get non-core functions performed by outside agencies.

Concept of Business Process Outsourcing

To outsource means to engage the services of an outside agency to manage, deliver and operate one or more business activities, processes or functions. Business process outsourcing may be defined as “the contracting out of a company’s in-house function to a preferred vendor with a high quality level in a particular task area.

” According to Gartner, “BPO is the delegation of one or more IT enabled business processes to a third party that owns, administers and manages the business processes according to a defined set of metrics.” Also known as Business Process Outsourcing (BPO), outsourcing implies the transfer of an enterprise’s non-core business process to an external provider. It encompasses the overall responsibility and day-to-day administration, operation and management of one or more supporting business processes.

In an outsourcing agreement there are two parties-the client company or outsourced which wants to outsource a business process, and the vendor or external provider which designs, manages, controls and provides the service to the company. For example, if Reliance Industries Ltd. wants to outsource advertising service for its ‘Vimal’ brand of clothing and it appoints ABC Advertising to design, prepare and release advertisements on its behalf, Reliance is the client company which outsources advertising service and ABC Advertising is the vendor or external provider, or outsourcer.

Benefits and Drawbacks of Business Process Outsourcing

Outsourcing can offer the following advantages:

1. Focus on Key Functions. Outsourcing enables an enterprise to concentrate its time and efforts on its key activities. The enterprise is freed from performing routine and non-core activities. Therefore, it can focus on matters which are more crucial to its success. It can make better use of its human, physical and financial resources.

2. Reduction in Cost. Outsourcing agencies are specialists in their activities. The can perform the same job at a lower cost. Therefore, charges paid to outsourcing agents will be much less than what the enterprise would itself spend on the performance of routine activities and functions.

3.Less Investment. The firm need not invest money in creating and maintaining systems for routine and non-core activities.

4. Specialisation. The outsourcing agent provides expert advice and assistance to the client company for better management of concerned functions.

5. Convenience. The firm is saved the problem of hiring and maintaining labour force for jobs that can be hired to outsiders.

6. Freedom of Choice. The company can choose the best outsourcing agency. It can have outsourcing contact with the agency for a limited period. The company is free to terminate or review the contract depending on the quality, reliability and efficiency of services offered by the agency.

7. Economic Progress. Due to outsourcing, every function is performed by the organisation most competent to do it. Division of labour and greater specialisation helps to maximise productivity and profits. Outsourcing contributes to economics growth by enabling everyone to utilise his potential to the maximum.

Business process outsourcing, however, suffers from the following drawbacks:

(i) Dependence. A business firm which gets some process performed by an outsourcer becomes dependent for the process. Its dependence to that extent is reduced.

(ii) Lack of Satisfaction. The firm may not get the desired level of service and quality may not be satisfactory.

(iii) Delay. The firm may suffer whenever there is delay on the part of the outsourcer in providing the necessary service.

(iv) Risk of Competition. The outsourcer may launch a competing enterprise after acquiring knowledge of the process outsourced.

(v) Danger of Secrets. The business secrets of the firm may get leaked to competitors. Considerable information has to be shared with the vendor.

(vi) Sweat Shopping. The outsourced may be accused of unfair labour practice because the outsourcer indulges in exploitation of labour in his own country. For example, the outsourcer may employ child labour and women on low wages.

(vii) Resentment. Outsourced may have to face resentment in his own country because people feel that outsourcing is reducing job opportunities for the local citizens.

Outsourcing can be a double edged sword. In the race to outsource, companies may cede skills that once made them unique. Thus, BPO is not an unmixed blessing.

Outsourcing of Different Types of Services

A wide variety of routine activities and services can be outsourced. Some of these services are given below:

1. Financial Services. Outsourcing service provides may be hired for maintaining books of accounts, for payroll administration, for transaction processing and other financial activities. When a company needs to raise finance by way of issue of shares and debentures, several formalities have to be performed. These formalities are cumbersome and require specialised knowledge and skills. Similarly, when a company wants to take over another company or when two companies want to merge together, expert valuers are required. Merchant banks, issuing houses and investment banks provide financial services, underwriting of securities, registration and transfer of shares, depositories t business enterprises.

2. Advertising Services. Advertising services is generally outsourced. Business firms hire advertising agencies to design and carry out advertising campaigns for them. These agencies design the advertising copy, arrange space and time for advertising and produce advertisements. They are experts in advertising and outsourcing advertising services to them provides benefits of specialisation to business firms.

3. Courier Services. Courier service is essentially postal service provided by private firms. Couriers carry letters and parcels at low charges and deliver them more quickly and safely than post office. Business firms hire couriers to sent letters, documents and samples of products from one place to another. Courier offer desk-to-desk service under which the articles to be dispatched are picked up from the sender’s place and delivered to the receiver’s place. A large number of courier service firms have come up in bug cities and towns. They are doing brisk business.

4. Customer Support Services. Producers and sellers of durable house-hold products such as washing machines, air conditioners, television sets, etc. are required to provide after sale services to their customers. Prompt, courteous and effective after sale service is essential for survival and growth of business in this competitive world. Large companies may have their own customer support service departments. Alternatively, they may outsource customer support service to outside agencies. These agencies are experts and can ensure complete customer satisfaction and thereby enhance the goodwill of client comapnies.

5. Human Resource Services. Several services concerning employees are nowadays outsourced. Recruitment and selection, orientation and training, payroll administration, employee welfare services(e.g., transport and food for the staff) are examples of such services. Key Factors in Successfully Outsourcing a Business Process

Key Factors in Successfully Outsourcing a Business Process

1. Thoroughly analyse your process so you know your costs, can determine the cost savings of outsourcing over a specific time period.
2. Define roles and responsibilities in the outsourcing partnership, so there are no surprises, and so that the expectations of both parties are clear.
3. Have measurable performance objectives- the speed of transactions, the time period to close the books,etc. – and establish performance incentives, both rewards and penalties, for meeting those objectives.
4. Develop a detailed transition plan to ensure a smooth hand-off. Outsourcing is a major undertaking that benefits from careful advanced planning.
5. Establish a clear dispute-resolution process to handle issues as they arise. This makes for smoother operations and doesn’t make every issue a contractual or legal problem.
6. Monitor results for continuous improvement. Arrange long-terms contracts on a yearly renewal basis, so there is an annual review of an outsourcer’s performance.

Business Process Outsourcing in India- Government Support

Business process outsourcing is progressing quite fast in India. Initially only a few corporations in the United States and Europe outsourced small relatively low grade jobs like storage of old records. Later as their confidence grew, they started trusting more valuable functions like payable accounting, customer care, human resource development to Indian firms. For example, EXL Service in Noida handles underwriting, insurance and claims processing functions on behalf of Conseco (USA). It also handles significant back office operations for three other clients a mortgage bank, an e-tailor and a consulting firm. The trend was started in India by GE when it set up its facility in Gurugram in the end 1990s.

India has low cost buy highly qualified English speaking labour. Therefore, BPO is accelerating quite fast in India. The first companies to start experimenting with India as an outsourcing base were multinationals who started company owned back office operations and call centres. Very soon they began outsourcing far more complex functions from India.

While MNCs still dominate the outsourcing scene in India, an increasing number of Indian firms have now started playing a role. Infosys, Wipro, Satyam and HCL technologies have entered BPO operations.

In view of the vital role of BPO, Government of India has announced several policy initiatives and concessions to encourage the growth of the IT- enabled outsourcing sector. The Indian software and service industry under the leadership of the National Associations of Software and Service Companies (NASSCOM) has also taken several steps to make India global hub for outsourcing. Some of the steps taken by the government and the industry for BPO art given below:

(i) Foreign direct investments upto 100 per cent of the equality has been permitted in BPO companies.

(ii) Duty free imports of capital goods (under the Export Promotion of Capital Goods Scheme) for BPO sector has been permitted.

(iii) Government of India has promoted several Software Technology Parks (STPs) which offer ready-to-plug IT and telecom infrastructure. These parks also provide single window clearance foe all regulatory procedures and formalities. STPs have been established in most major cities across the country.

(iv) On the recommendations of NASSCOM, Government of India removed various procedural bottlenecks that were hampering the growth of BPO

(v) Under the Income-Tax Act, tax exemption has been allowed on several IT enabled products and services.

After BPO and KPO, Welcome to MPO

India’s outsourcing pie is increasing by the day with latest entrant to the guild being marketing process outsourcing (MPO). It has joined ranks with BPO (business process outsourcing) and KPO (knowledge process outsourcing). But, unlike BPO and KPO that rely largely on foreign multinationals for their business, the MPOs count desi firms as their clients.

An MPO firm undertakes the entire array of marketing sales and advertising operations for its clients that often are small and medium business enterprises lacking marketing muscle but keen to expand their product reach.

Though at a nascent stage,the total MPO market at present is estimated at around rs.1,200 crore.

Concept of E-Commerce

In simple words, E-commerce (Electronic Commerce) means the process of carrying out business transactions through internet. It involves buying and selling products and services through electronic means. According to the International Fiscal Association, “e-commerce means commercial transactions in which an order is placed electronically and goods or services are delivered in tangible or electronic form.” The European Union website defines, e-commerce as “a general concept covering any form of business transactions or information exchange that is made by using information and communication technology.” E-commerce includes any form of computerised buying and selling. It refers to paperless exchange of business information. It makes use of electronic data interchange, electronic mail, electronic bulletin boards, electronic funds transfer and so on.

This, e-commerce and e-business are used synonymously. E-business involves not only buying and selling but also servicing customers. It is more comprehensive than e-commerce. Under E-business, business operations are integrated with e-commerce to improve performance and create value for all stakeholders. With the help of e-business, an organisation can achieve the following objectives:

(i) Create new products and services.

(ii) Access new markets.

(iii) Build customer loyalty.

(iv) Make optimum use of technology.

(v) Enrich human capital.

(vi) Gain competitive advantage.

Application of E-commerce

E-commerce can be applied in four types of business situations which are s follows:

1 Business to Business (B2B) Applications: In this case, business transactions take place between different firms. Business to business transactions account for a major part of total e-commerce.
An example of business-to-business category would be a company that uses a network for ordering from its suppliers, receiving invoices and making payments. This category has been well established for several years, particularly by using Electronic Data Exchange (EDE) over private and value-added networks. Maruti Zusuki, Tata Steel, Bajaj Auto, Thermax, Kinetic and many other companies use B2B commerce.

2 Business to Consumer (B2C) Applications: This category comprises commercial transactions between business firms and their customers. Companies sell products and services online to customers. For example, Amul.com sells Amul products online.

The business-to-consumer category largely relates to electronic retailing. This category has expanded greatly with the advent of World Wide Web. There are now shopping malls all over the Internet offering all kinds of consumer goods-from cakes to computers and motor cars. Subscription services are another example in addition to e-shops.

3 Business to Administration (B2A) Applications: It covers all transactions between companies and government organisations. For example, in the USA the details of forthcoming government procurement are publicised over the internet and companies can respond electronically. Currently this category is in its infancy, but it could expand quite rapidly as governments use their own operations to promote awareness and growth of electronic commerce. In addition to public procurement, administrations may also offer the option of electronic interchange for such transactions as VAT returns and the payment of corporate taxes.

4 Consumer-to-administration (C2A) Applications: This category has not yet emerged. However in the wake of a growth of both the business-consumer and business-administration categories, government may extend electronic interaction to such areas as welfare payments and self-assessed tax returns.

Operating Procedure of E-commerce

The steps involved in e-commerce are as follows:

(i) Search for Relevant Website: An online buyer takes the following steps to find the appropriate seller: (a) he logs on to the internet and selects a menu item that appears on the screen of his computer, (b) he makes use of a search engine to find an appropriate seller’s website, (c) he may approach the desired seller’s website from another website which is advertising it, (d) he may select the desired seller from advertisements or on a friend’s recommendation. Selecting an appropriate seller’s website can be as easy or difficult as finding an appropriate shop in a conventional market.

(ii) Search for the Desired Product or Service on the Website: The buyer can identify the desired product/service on the website from its picture or description. Unlike a conventional shop, there is no salesman on the website to assist the buyer.

(iii) Negotiating with the Seller: In case the website does not specify the prices and terms of sale, the buyer will contact he seller on telephone. He will negotiate and place order with the seller.

(iv) Making Payments: In an online purchase, payment may be made through credit card or cheque.

(v) Delivery: In e-commerce, goods which cannot be delivered online, post or courier service are used to deliver goods to buyer. Electronic products such as software, music and information can be delivered online by way of downloading. Air ticket or insurance policy bought and paid for online may be confirmed online itself and there is no need for delivery. In some cases the buyer may be asked to collect the goods from the seller’s local distribution centre.

(vi) After Sale Service: Some suppliers provide online support and after sale services to their customers.

Benefits of E-commerce

The main advantage of E-commerce are as follows:

(i) Global Market: E-commerce enables business firms to reach out to customers all over the world who have access the internet. The whole world becomes, therefore, a potential ,market for business enterprises.

(ii) Round the Clock Working: A website is open all 24 hours. It can take orders, keep an eye on delivery of goods and receive payments at any time. A business firm can provide desired information about its products an services to customers. It can also display three dimensional images of its product on the internet.

(iii) Customised Products and Services: Internet provides high speed communications with different parts of the world. Business enterprises can thus develop products to suit preferences of people residing in different countries. For example, in India, manufacturers of silk sarees can develop silk garments for Chinese and Japanese customers. Businessman can even invite customers to design products and services of their choice and thereby earn their loyalty.

(iv) Reduced Cost: With the help of e-commerce, business firms can substantially reduce the cost of business transactions. E-commerce can help reduce advertising costs, expenses involved in exchange of information, costs involved in carrying the goods for display. The number of customers service representatives can be reduced by providing information on website.

(v) Wide Choice: For the customers, the whole world becomes a shop. They can look and evaluate the same product at different websites and make the best choice. There are no limitations of inventory and space.

(vi) Customer Convenience: Customers can shop sitting at home or office. They do not need to stand in a queue to talk to salesman or to read catalogues and price lists. They can access the internet and buy at any time according to their convenience. Payments con also be made online.

(vii) Direct Contacts: Business firms can establish direct contacts with the customers by eliminating middleman. They can focus on specific customer groups.

(viii) Sales Promotion: E-commerce can be used for sales promotion. Catalogues and new product launch can be transmitted to consumer through the internet. Paperless exchange of information helps to save time and money.

(ix) Consumer Satisfaction: E-commerce allows quick response and redressal to customer complaints. This helps to increase customer satisfaction.

(x) Less Investment: Business firms can get quick supplies from the vendors. They need not maintain huge inventories. Therefore, less capital is blocked in inventory.

(xi) Security: There are in-built security measures in e-commerce devices to prevent unauthorised use of data and information. Password, encoding, encryptography, cipher, etc. are some of these measures.

Limitations of E-commerce

E-commerce suffers from the following drawbacks:
(i) High Risk: Internet start up organisations face huge risk. several high paid executives who resigned and set up internet startups lost huge amount of money. The dot.com bubble burst due to lack of good revenue model, poor customer service and other problems.

(ii) Shortage of Talent: There is great shortage of skilled persons who can successfully handle e-commerce. Traditional organisation structure and poor work cultures also restrict the growth of e-commerce.

(iii) System and Data Integrity: Integrity of the system and protection of data are serious problems in e-commerce. Several types of computer viruses cause undue delays, file backups and storage problems. There is always the danger of hackers who may access files and corrupt accounts.

(iv) Lack of Security: Security is a serious concern in e-commerce transactions. Online customers are reluctant to disclose their credit card numbers due to fear of fraud.

(v) Vulnerability to Competition: A business organisation which makes information about itself and its products becomes vulnerable. Competitors may extract business intelligence from the website of the organisation.

(vi) Operating Problems: Customers may lose confidence in e-commerce when a firm fails to fulfil its commitments. There are instances of website crashing merchandise mix-ups, and shipping delays.

(vii) Unsuitability: There are several products for which e-commerce is not suitable. People may not like to buy furniture, jewellery and many other items online because they want to test and feel the product before buying.

Opportunities for E-commerce

E-commerce offer tremendous opportunities to business firms for expanding their sales and business relationships. Some of these opportunities are given below:

(i) Growing Use: More and more people are making use of internet. People will gradually prefer to do shopping online through the internet. Millions of people around the world exchange information and conduct transactions through e-commerce. The number is increasing day-to-day. E-commerce is being widely used in business as well as in social sectors such as health care, public administration and so on. E-filing of income tax returns has become possible.

(ii) Huge Potential: E-commerce offers tremendous scope of growth. It is very cost effective. Buying online can reduce costs by ninety per cent. India’s e-commerce business in 2011 as about rs.50,000 crore. Internet in India is growing at about 250 per cent every year. Introduction of broadband and improved connectivity will boost the growth of e-commerce.

(iii) Trust Building: E-commerce website provides a forum for interaction between business firms as well as between business and customers. Buyers and sellers get website easily and secrecy of information exchanged is assured. People can interact with one another. Companies operating website facilitate exchange of ideas and viewpoints between various interest groups in addition to promoting their own business interests.

(iv) Value Creator: E-commerce helps business enterprises to multiply their market values. With the help of e-commerce, business concerns acquire knowledge and information and improve their intellectual capital. In fact, e-commerce has created several new businesses, markets and business opportunities. Business firms can strengthen relationships with customers due to quick and inexpensive communication.

E-commerce can be used in

(a) Purchase and sale of goods.

(b) Delivery of products which can be down loaded from computer.

(c) Transfer of money and online banking.

(d) Online trading in securities.

(e) Electronic payment for securities.

(f) Booking hotels, air tickets, etc.

(g) Import-export transactions.

(h) Insurance and transportation business.

Resources Required for E-commerce

The resources required for successful implementation of e-commerce are given below:

(i) Well Designed Website: A business enterprise must develop a comprehensive to communicate effectively with its customers an business partners. The website should provide detailed information about the firm’s products and services. Data should be supported with suitable pictures, graphs, etc. Customers will gain access to the company’s website through their computers linked to any network.

(ii) Adequate Computer Hardware: The business firm must procure and install computers with necessary speed, memory and modes to handle the expected volume of business. It should provide the necessary Internet Service Provider (ISP) and Application Service Provider (ASP), Server and Portals, and e-mail facilities.

(iii) Effective Telecommunication System: E-commerce requires an effective telecommunication system in the form of telephone lines, optic fibre cables, and internet technology to handle the traffic on the internet. E-commerce cannot be successful if telephone lines are getting frequently disconnected and it is difficult to access the internet. This problem, called ‘Digital divide’, must be bridged to make e-commerce available to common man. The cost of hardware and the price of using the internet must be within the reach of low and middle income groups.

(iv) Technically Qualified and Responsive Workforce: A well-trained work force, i.e., capable of working easily with the internet and computer networks is essential for e-commerce. The staff must also be trained to handle sales inquires, processing orders and ensuring prompt delivery. There should be proper coordination between receipt of order, delivery of goods and receipt of payment so as to minimise errors.

(v) Reliable Payment System: A fool-proof system of receiving payment for the goods sold must be developed. Adequate information should be made available to enable the customers to calculate the amount to be paid. An inbuilt system of refunds, in case excess amount is received should be created. Business firms must make arrangements with banks and credit card agencies to facilitate electronic receipts and payments of money.Threats (problems) to E-commerce

Threats (problems) to E-commerce

E-commerce transactions face the following threats and risks:

(i) Hacking: Hacking means unauthorised entry into a website. Hackers intercept messages sent on internet. They intercept confidential information. They misuse such information to their advantage or modify and even destroy its contents to harm the parties. In recent years there has been an alarming increase in the cases of hacking.

(ii) Brand Hijacking: Companies may create powerful new brands overnight through the internet. They hijack brands built over a long period of time and through considerable expenditure through radio and TV. For example, Amazon.com became a leading bookseller on the internet beating out well known names such as Barnes and Noble.

(iii) Impersonation: Hackers may pretend to be customers themselves. They thus make use of stolen credit cards of real customers.

(iv) Fraudulent Trading: A business enterprise operating a website may indulge in fraudulent practices. It may operate a fake website, take away money from customers and not supply the product\service to the customer. It may not protect confidential information about customers.

(v) Improper Registration of Domain Names: A dishonest person may register a domain name linked to the established brand name or trade mark of another firm. For exmaple, he may register vedafone.com in his name to sell the domain name to the rightful owner at a price.

(vi) Viruses: Some viruses destroy all the information stroed in a computer. Others also hamper the functioning of e-commerce. They cause huge loss of revenue and time. Viruses may enter a computer system through e-mail or disc drive floppies or website.

(vii) Cybersquatting: It means registering of domain names of known brands and entities with unscruplous intention of making money from the original trademark of brand owner.

(viii) Other Cyber Crimes: Embezzlement, hate mall, threats to life and property are examples of other computer crimes.

Security and Safety of E-commerce Transactions

The following methods can be used to ensure security and safety of e-commerce transactions:

(i) Cyber Crime Cells: Government may set up special crime cells to look into the cases of hacking and take necessary action against the hackers.

(ii) Encryption: Encryption means converting the message into a code so that unauthorised persons may not understand it. Only the sender and the receiver of the message know the encoding and decoding rules. However, it is difficult to maintain absolute secrecy with thousands of users of e-commerce. Another alternative to maintain secrecy of e-commerce message is the private key. The private key is meant to decode the message in such a way that only the recipient of the message knows it.

(iii) Digital Signatures: Under this method, a coded digital certificate is issued for each message by a certification authority. The purpose is to check the identity of the sender. Whenever a message is received, the hasg function is checked to ensur that the contents of the message have not been altered. Digitised signature is accepted as a legal proof of the transaction under laws of some countries.

(iv) Third Party Involvement: In order to ensure that parties to a transaction do not disown the transaction, a copy of the transaction is sent to a third party which is acceptable to the parties to the transcations. The copy with the third party will be helpful in settling any dispute that may arise between contracting parties.

Emerging Opportunities in Business