Virtual business
Encyclopedia
A virtual business employs electronic means to transact business as opposed to a traditional brick and mortar business that relies on face-to-face transactions with physical documents and physical currency or credit.
was a virtual business pioneer. As an online
bookstore, it delivered and brokered bookstore services without a physical retail store presence; efficiently connecting buyers and sellers without the overhead of a brick-and-mortar location. As Web 2.0
services have risen in popularity, many businesses have begun to use these communicative and collaborative technologies to reach their customers. With heightened security, PCI DSS
compliance regulations, and more stringent monitoring abilities, credit card transactions via the Internet are even more secure than other options such as phone or fax. Along with connecting customers with physical products, virtual businesses are starting to provide important services as well. Recently, the online delivery of professional services such as administration, design, and marketing services have risen in popularity. Such companies have refined their offerings to include services such as a Virtual Assistant
, in which the person providing the service works out of his/her own office and provides services via the Internet or other technology.
via web sites and by leveraging their existing telecommunications infrastructure. In addition to sales and customer relations, such e-commerce may also include:
. Environments such as Second Life
have enough economical activity to be viable for commerce and one can make a living from sales of virtual property, products and services to virtual customers in these virtual worlds.
) may be required to maintain a registered agent with a physical address but it can be started, operated and terminated without any of the principals ever being in each others' physical presence.
is network of independent companies—suppliers, customers, competitors, linked by information technology to share skills, costs, and access to one another's markets. Such organizations are usually formed on the basis of a cooperative agreement
with little or no hierarchy
or vertical integration
. This flexible structure minimizes the impact of the agreement on the participants' individual organizations and facilitates adding new participants with new skills and resources. Such arrangements are usually temporary and dissolve once a common goal is achieved. A virtual enterprise is rarely associated with an independent legal corporation or brick and mortar identity of its own.
History
Amazon.comAmazon.com
Amazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...
was a virtual business pioneer. As an online
ONLINE
ONLINE is a magazine for information systems first published in 1977. The publisher Online, Inc. was founded the year before. In May 2002, Information Today, Inc. acquired the assets of Online Inc....
bookstore, it delivered and brokered bookstore services without a physical retail store presence; efficiently connecting buyers and sellers without the overhead of a brick-and-mortar location. As Web 2.0
Web 2.0
The term Web 2.0 is associated with web applications that facilitate participatory information sharing, interoperability, user-centered design, and collaboration on the World Wide Web...
services have risen in popularity, many businesses have begun to use these communicative and collaborative technologies to reach their customers. With heightened security, PCI DSS
PCI DSS
The Payment Card Industry Data Security Standard is an information security standard for organizations that handle cardholder information for the major debit, credit, prepaid, e-purse, ATM, and POS cards....
compliance regulations, and more stringent monitoring abilities, credit card transactions via the Internet are even more secure than other options such as phone or fax. Along with connecting customers with physical products, virtual businesses are starting to provide important services as well. Recently, the online delivery of professional services such as administration, design, and marketing services have risen in popularity. Such companies have refined their offerings to include services such as a Virtual Assistant
Virtual assistant
Common modes of communication and data delivery include the Internet, e-mail and phonecall conferences, online work spaces, and fax machine. Professionals in this business work on a contractual basis and a long-lasting cooperation is standard...
, in which the person providing the service works out of his/her own office and provides services via the Internet or other technology.
Physical/virtual blending
Most brick and mortar companies reduce costs and increase market share by engaging in e-commerceElectronic commerce
Electronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online...
via web sites and by leveraging their existing telecommunications infrastructure. In addition to sales and customer relations, such e-commerce may also include:
- Collaborating with suppliers and competitors.
- OutsourcingOutsourcingOutsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
many of the business functions like marketing, operations management and new product development, - TelecommutingTelecommutingTelecommuting or telework is a work arrangement in which employees enjoy flexibility in working location and hours. In other words, the daily commute to a central place of work is replaced by telecommunication links...
Virtual worlds
Some virtual businesses operate solely in a virtual worldVirtual world
A virtual world is an online community that takes the form of a computer-based simulated environment through which users can interact with one another and use and create objects. The term has become largely synonymous with interactive 3D virtual environments, where the users take the form of...
. Environments such as Second Life
Second Life
Second Life is an online virtual world developed by Linden Lab. It was launched on June 23, 2003. A number of free client programs, or Viewers, enable Second Life users, called Residents, to interact with each other through avatars...
have enough economical activity to be viable for commerce and one can make a living from sales of virtual property, products and services to virtual customers in these virtual worlds.
Virtual corporations
Groups of people can assemble online and enter into an agreement to work together toward a for-profit goal, with or without having to formally incorporate or form a traditional company. A virtual corporation (S-corp or LLCLimited liability company
A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. It is a legal form of company that provides limited liability to its owners in the vast majority of United States jurisdictions...
) may be required to maintain a registered agent with a physical address but it can be started, operated and terminated without any of the principals ever being in each others' physical presence.
Virtual enterprise
A virtual enterpriseVirtual enterprise
A virtual enterprise is a temporary alliance of businesses or persons that come together to share skills or core competencies and resources in order to better respond to business opportunities, and whose cooperation is supported by computer networks....
is network of independent companies—suppliers, customers, competitors, linked by information technology to share skills, costs, and access to one another's markets. Such organizations are usually formed on the basis of a cooperative agreement
Memorandum of Agreement
A memorandum of agreement or cooperative agreement is a document written between parties to cooperatively work together on an agreed upon project or meet an agreed objective. The purpose of an MOA is to have a written understanding of the agreement between parties.An MOA is a good tool to use for...
with little or no hierarchy
Hierarchy
A hierarchy is an arrangement of items in which the items are represented as being "above," "below," or "at the same level as" one another...
or vertical integration
Vertical integration
In microeconomics and management, the term vertical integration describes a style of management control. Vertically integrated companies in a supply chain are united through a common owner. Usually each member of the supply chain produces a different product or service, and the products combine to...
. This flexible structure minimizes the impact of the agreement on the participants' individual organizations and facilitates adding new participants with new skills and resources. Such arrangements are usually temporary and dissolve once a common goal is achieved. A virtual enterprise is rarely associated with an independent legal corporation or brick and mortar identity of its own.