Running head: BUSINESS-TO-BUSINESS AND BUSINESS TO-CONSUMER 1

BUSINESS-TO-BUSINESS (B2B) AND BUSINESS TO-CONSUMER (C2C)

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BUSINESS-TO-BUSINESS (B2B) AND BUSINESS TO-CONSUMER (C2C) 2

Introduction

Business-to-Business (B2B) refers to business that is usually carried out between two

businesses while Business-to-consumer (B2C) refers to business that is carried out between a

consumers and consumers. B2B and B2C e-business model is where businesses connect with

each other or with customers and conduct business through electronic methods of

communication e.g. e-mail, and internet (Agnihotri, et al. 2016).

E-business has been mentioned severally as a game changer in the business industry because

of the rapid development in technology and use of the internet among individuals. There has

been an ever-increasing usage of the internet across the globe over the years. It is therefore

worthy to note that the adoption of e-business models by an organisation is a great idea

because it is the future of business and it keeps an organization ahead of its competitors.

There are three main B2B e-business models, which are process, based, transaction based and

strategic relationship. These business-to-business business models definitions are;

a. Process based.

This is where two businesses adopt a common procedure to carry out transactions coherently

and in an effective way thus enhancing efficiency of the business.

b. Transaction based.

Refers to a particular online routine for carrying out transactions that is adopted and used

across the entire online forum by the businesses that are involved.

c. Strategic relationship.

This is where organizations join their networks and processes covering all their business

transactions. It can involve two organizations or even more than two organizations in some

instances.
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There are also five main business-to-customer e-business models. These business-to-

customer business models are;

a. Fee based.

This is where consumers are charged a fee so that they can access the business services.

Some of these services may also be offered freely but are limited to attract more customers.

b. Community based.

These are communities of consumers that are formed in some social media sites e.g.

Facebook and twitter which enables marketers to reach out to a specific suitable group

through digital advertisements such as Facebook ads and twitter ads.

c. Advertising based.

This refers to a website that uses free content to bring visitors to a website who come across

digital ads. The more the traffic, the more the views that increases chances of conversion of

these views to sales and thus business for the organization.

d. Online intermediaries.

These are online intermediaries who provide a forum that connects buyers and sellers but

only those that are businesses to customers and should not be confused with strategic

relationship for business-to-business.

e. Direct sellers.

This is where consumers buy goods and services directly from online retailers without any

intermediaries. It is the most common form of business-to-customer e-business model.

Bright Light Limited intends to adopt B2B and B2C e-business. Before the adoption of any of

these, a feasibility has to be done for Bright Light Limited in four main areas, which are

product feasibility, organization feasibility, financial feasibility and market feasibility.

BUSINESS-TO-BUSINESS (B2B) AND BUSINESS TO-CONSUMER (C2C) 4

Product feasibility refers to the analysis and evaluation of the general acceptance by

consumers of the product being offered. We can therefore note that Bright Light Limited is

already an established company with over ten years of operation and due to the high quality

of its products, innovation and good customer service it has expanded continuously over the

years. It now manufactures a complete range of light bulbs and fluorescents. The BLL

products are not new in the market and have already been fully embraced by the consumers

as evidenced by the continuous growth witnessed by the organization over the years.

Carrying out business-to-customer (B2C) e-business is therefore a great initiative because of

the numerous advantages associated with it such as greater reach of market, enhanced

customer care service, growth of business, customer loyalty, lower cost than traditional

business and effective business administration. Business-to-business (B2B) will also be much

more effective because of the already established growth life cycle of the product and since

Bright Light Limited (BLL) has contacts with a number of local, national and international

electronics retailers and whole sellers, conducting B2B will cut several costs associated with

traditional business models and it will witness greater efficiency in conducting the business.

(Devaraj, Fan, & Kohli, 2002).

Organization feasibility refers to the legal and business structure of an organization. Bright

Light Limited (BLL) has a number of central departments, namely: Accounting, Marketing,

HRM, Electrical engineering and Design, Sales, Warehousing, Manufacturing, Logistics and

Despatch. Each of these departments play an essential role in selling its bulbs onto customer.

This is already a well-organized business with a solid business structure that is already

working for example, the sales department orders parts, which get stored in the Warehouse.

Therefore, adopting and implementing B2B and B2C e-business will be far much easier for

BLL. Bright Light Limited also experiences challenges with handling of information due to

lack of an information system (IS).

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The use of IS is very small. For example, the accounts department is involved in handling

purchase orders and paying for goods, whereas the marketing department collects information

about the popularity of products and then advises the organisation to acquire particular types

of bulb design and also markets and advertises the products. To reverse this, adoption of a

new up-to-date integrated Computer-Aided Design/Computer-Aided Manufacturing system

has been done and thus increasing the efficiency of BLL. Therefore, Bright Light Limited

(BLL) can go on and adopt business-to-customer (B2C) and business-to-business (B2B) e-

business because they are organizationally feasible to be implemented in the BBL business

organization

structure.

Financial feasibility refers to how a project is attractive financially. It can be based on a a

number of considerations which are;

a. Net present value.

It involves calculating cash flows to be generated and discounting them to present.

b. Return on investment.

It is a financial ratio that is used to get benefit in ratio to investment.

c. Payback period.

This is the period it will take for business to break-even which refers to the period to recover

initial costs to set up the project.

d. Cost estimates.

This involves estimating the costs associated with the project and noting if it is affordable to

the organization.

Bright Light Limited (BLL) will do a financial feasibility based on either of these

considerations and use the findings to decide whether the project of getting into business-to-

business (B2B) and business-to-customer (B2C) e-business is financially feasible.

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Market feasibility analyses the market factors such as economic, cultural, demographic,

tastes, and preferences. It determines the probability of a successful implementation of a

project (Kumar, & Raheja, 2012).

Bright Light Limited (BLL) has contacts with a number of local, national and international

electronics retailers and whole sellers and therefore the market for BLL is very wide and

already established internationally. This makes adoption of B2B and B2C e-business more

appealing. There are several differences in work processes involved in selling products using

traditional means against the internet (Iankova, et al. 2019)

a. Marketing.

Traditional marketing involves setting a store in the right place and also handing out

pamphlets while internet marketing involves setting a website and doing digital marketing

e.g. Facebook Ads.

b. Logistics.

Logistics in having a store involve only getting products to the store while online logistics are

much more varying e.g. ordering, method of payment, delivery, returns and replacement and

refunds.

c. Presence.

Persuasion is easier in face to face whereas it is not easier to persuade somebody online.

d. Competition.

When having a physical store, customers can compare your products with those of

competitors and make a decision while online the products should be easily identifiable and

at the top of the list.

e. Expansion.

In traditional means, expansion involves getting more physical space while in the internet,

expansion involves investing more in digital marketing and online advertisements.

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f. Time.

More time is used at a store compared to when selling online.

g. Initial investment.

Traditionally, initial investment is advance rent and a store while in the internet, initial

investment is setting up a website.

h. Branding.

Similar in both since they follow the same method in doing branding.

i. Jurisdiction.

Traditional businesses are set to be local while e-business is multijurisdictional.

j. Personnel.

In traditional business, employees must be physically available while in e-business they do

not have to be physically available.

The business environment plays a critical role in determining the success of a business

(Needle, & Burns, 2004). The various business environment factors that affect BBL are:

a. Corporate leadership

BBL has a responsible business leadership. This is seen through various decisions taken by

its executive. BLL’s Managing Director realised the need to use IS to enhance and yield

greater efficiency and effectiveness, given the international competition. So he has decided to

create a small IS department. An initial priority of BLL is to acquire a new up-to-date

integrated Computer-Aided Design/Computer-Aided Manufacturing system (software and

hardware). This system will have implications for the organisation and other systems. It

needs good network to run simultaneously throughout the organisation. This system would

affect many different types of workers and stakeholders of the organisation in addition to its
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engineers and designers. For example, it may lead to redundancies. BLL also wishes to use a

shop floor data collection system to collect the data about worker output, quality and wastage.

BLL has also realised need to acquire a number of new information systems across many of

its departments. Different departments need different systems to provide different levels of

functionality. For example, the use of systems by senior management would normally be for

long term decision making to check the overall progress of the company. Moreover, different

systems need to integrate with one another to yield greater value out of them.

This show how responsible leadership BLL has.

b. Organization structure

BLL has a well-organised organization structure. It has a number of central departments,

namely: Accounting, Marketing, HRM, Electrical engineering and Design, Sales,

Warehousing, Manufacturing, Logistics and Despatch. It buys products from a variety of

suppliers, such as producers of electronic components, glass and transistors, etc. BLL has

contacts with a number of local, national and international electronics retailers and whole

sellers. Each of its department plays an essential role in selling its bulbs onto customer. For

example, the sales department orders parts, which get stored in the warehouse. The

warehouse then forwards them onto the manufacturing department.

c. Organization culture

The use of IS in BLL is very small. For example, the accounts department is involved in

handling purchase orders and paying for goods, whereas the marketing department collects

information about the popularity of products and then advises the organisation to acquire

particular types of bulb designs. It also markets and advertises the products. BLL needs a

number of new information systems across many of its departments. Different departments

need different systems to provide different levels of functionality. For example, the use of
BUSINESS-TO-BUSINESS (B2B) AND BUSINESS TO-CONSUMER (C2C) 9

systems by senior management would normally be for long-term decision making to check

the overall progress of the company. Moreover, different systems need to integrate with one

another to yield greater value out of them.

d. Economic environment

BLL is a multi-national organization. It deals with customers and businesses from various

regions with different economies. BLL has contacts with a number of local, national and

international electronics retailers and whole sellers. Each of its department plays an essential

role in selling its bulbs onto customer.

e. Legal environment

BLL is a multi-national organization. It deals with customers and businesses from various

regions with different governments and legal requirements. BLL has contacts with a number

of local, national and international electronics retailers and whole sellers. Each of its

department plays an essential role in selling its bulbs onto customer.

References
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Agnihotri, R., Dingus, R., Hu, M. Y., & Krush, M. T. (2016). Social media: Influencing

customer satisfaction in B2B sales. Industrial Marketing Management, 53, 172-180.

Devaraj, S., Fan, M., & Kohli, R. (2002). Antecedents of B2C channel satisfaction and

preference: validating e-commerce metrics. Information systems research, 13(3),

316-333.

Gefen, D., & Straub, D. (2003). Managing user trust in B2C e-services. e-Service, 2(2), 7-24.

Kolis, K., & Jirinova, K. (2013). Differences between B2B and B2C customer relationship

management. Findings from the Czech Republic. European Scientific Journal, 4, 22-

27.

Kumar, V., & Raheja, E. G. (2012). Business to business (b2b) and business to consumer

(b2c) management. International Journal of Computers & Technology, 3(3b), 447-

451.

Iankova, S., Davies, I., Archer-Brown, C., Marder, B., & Yau, A. (2019). A comparison of

social media marketing between B2B, B2C and mixed business models. Industrial

Marketing Management, 81, 169-179.

Needle, D., & Burns, J. (2004). Business in context: An introduction to business and its

environment. Sydney: Thomson.