| Meaning | Conducting business activities over the internet or any other computer network is known as E-business or Electronic Business. | A Traditional business is a local store, shop, etc., which offers its services or products to its local customers. It is a set-up where customers will have to visit the store physically to buy the products or services. |
| Ease of Formation | Formation of E-business is easy. | Formation of traditional business is comparatively difficult. |
| Physical Presence | Physical presence is not required. | Physical presence is required. |
| Locational Requirements | There is no requirement for location. | There is a requirement for location, and a location near raw materials and markets is preferred. |
| Cost of Setting up | The cost of setting up an E-business is low as there is no requirement for physical facilities. | The cost of setting up a traditional business is high as there is a requirement for physical facilities. |
| Operating Cost | Operating cost is low. | Operating cost is high because of fixed charges associated with storage, marketing, etc. |
| Contact with Suppliers and Customers | There is direct contact with suppliers and customers. | There is indirect contact with suppliers and customers through intermediaries. |
| Nature of Internal Communication | Communication can flow in any direction. | Communication flows in hierarchical order. |
| Response time for meeting Customers/ Internal Requirements | It gives an instant response. | Response takes a lot of time. |
| Organisational Structure | Organisational structure is vertical or tall due to the chain of command. | Organisational structure is horizontal or flat due to direct command and communication. |
| Ease of going Global | There are many chances of going global. | There are less chances of going global. |
| Business Processes and Length of the Cycle | There are short business processes and cycle. | There are long business processes and cycle due to the number of sequential processes. |
| Opportunity Interpersonal Touch | There is less opportunity for interpersonal touch. | There is more opportunity for interpersonal touch. |
| Opportunity for physical pre-sampling of the Products | There are less opportunities for physical pre-sampling of the products. It is mostly available in the case of books, software, journal, etc. | There are many opportunities for physical pre-sampling of the products. |
| Government Patronage | Government patronage is increasing. | Government patronage is declining or shrinking. |
| Nature of Human Capital | Technically and professionally qualified human capital is needed. | Mostly semi-skilled and unskilled manpower is needed. |
| Transaction Risk | There are high transaction risks due to a lack of personal contact between the parties. | There are low transaction risks due to personal contact between the parties. |