Emerging modes of business

The newer modes of business are not new businesses. These are rather simply the new ways of doing business. The main reason for these new ways of doing business is for reducing cost. Because of global competitiveness for higher quality products at lower cost and ever demanding customers, the only way for survival and profitability is cost reduction.This cost of reduction is done by many ways.

One of the ways is division of labour and specialization. Besides improving quality, this method reduces cost too. This happens due to the economies of large scale accruing to the outsourcing partners as they deliver the same service to a number of organizations. Differences in prices of factors of production across the countries are also a factor contributing to cost reduction. For example, India is a preferred destination for IT enabled services because of large scale availability of required man power at lower costs. Even though this new way of doing business increases the profit for the host countries, it causes resentment back in the home countries, because these countries from which the jobs are sourced are suffering from the problem of unemployment.

The second way of doing business is none other than the most popular method of e- business. It has emerged to strengthen the capabilities of the business firm by creating utilities and delivering value to successfully meet the competitive pressures and ever growing demands of consumers for better quality, lower prices, speedier deliveries and better customer care. Besides, the quest for benefitting from emerging technologies mean that business as an activity keeps evolving even though e-business has various advantages, it is not all that rosy. The process of adjustment to new technology, a new way of doing things causes stress and a sense of insecurity. It has many ethical fallouts also. There is an increased risk due to anonymity and non-traceability of parties.