electronic commerce: definitions and concepts
DESCRIPTION
Electronic commerce (e-commerce, EC) describes the buying, selling, transferring or exchanging of products, services or information via computer networks, including the Internet. - PowerPoint PPT PresentationTRANSCRIPT
Electronic commerce (e-commerce, EC) describes the buying, selling, transferring or exchanging of products, services or information via computer networks, including the Internet.
Electronic Commerce: Definitions and Concepts
Electronic Commerce: Definitions and Concepts (cont.)
Pure vs. Partial EC depends upon the degree of digitization (the transformation from physical to digital) of:
1. the product (service) sold;
2. the process; and for
3. the delivery agent (or digital intermediary)
Brick-and-Mortar organizations are old-economy organizations (corporations) that perform most of their business off-line, selling physical products by means of physical agents
Electronic Commerce: Definitions and Concepts (cont.)
Virtual (pure-play) organizations conduct their business activities solely online
Click-and-mortar organizations conduct some EC activities, but do their primary business in the physical world
Advantages of E-commerce
Lower Cost Economy (no rental of physical store space,insurance and infrastructure
investment) Higher Margins (cost of processing a conventional ticket is $8 where as
e-ticket is of 1$) Better Customer Service Quick Comparison Shopping Productivity Gains (letting customer find their answer to technical
question – IBM) Teamwork Growth in Knowledge Markets (research on consumer behavior) Information Sharing, Convenience and Control Customization (DELL)
Technical Limitations of EC A few technical challenges remain for organizations wishing to
conduct EC: Lack of universally accepted standards for quality, security, and
reliability Insufficient telecommunications bandwidth Still-evolving software development tools Difficulties in integrating the Internet and EC software with some
existing applications and databases Need for special Web servers in addition to the network servers
(added cost) Expensive and/or inconvenient Internet accessibility for many
people
Non-Technical Limitations of EC Legal and economic concerns:
Lack of national and international regulations and standards Difficulty in measuring benefits of EC and justifying EC Insufficient number (critical mass) of sellers and buyers exists for
profitable EC operations
Cultural resistance: Distrust of the new: Many sellers and buyers are waiting for EC to
stabilize before they take part Customer resistance to the change from a physical to virtual stores Perception that electronic commerce is expensive and unsecured, so
many do not want even to try it
Classification of EC
business-to-consumer (B2C) : online transactions are made between businesses and individual consumers
business-to-business (B2B): businesses make online transactions with other businesses
consumer-to-business (C2B): e-commerce model in which individuals use the Internet to sell products or services to organizations or individuals seek sellers to bid on products or services they need
Classification of EC
consumer-to-consumer (C2C): e-commerce model in which consumers sell directly to other consumers
business-to-employees (B2E): e-commerce model in which an organization delivers services, information, or products to its individual employeese
e-learning: the online delivery of information for purposes of training or education
e-government: e-commerce model in which a government entity buys or provides goods, services, or information to businesses or individual citizens
E-Commerce Business Models Store-front model
Provides with product information, shopping cart, and online ordering mechanism
Provides good like books, computer and pizzas Merchant reaches customer directly
Click – And – Mortar model Combination of a web site with a physical store. Pre-establish brand name Using web site to promote physical store User and return defective items simply by going to store.
Service Provider Model Recovering the cost of processing through advertisement on
their website Yahoo…
Cont.. Built to Order Merchant Model
Offering goods or services and the ability to order customized versions.
Products are assembled individually and shipped to customer Subscription – Based Access Model
Visitor pays fixed fee per month for unlimited access to the service
Portal Site Model A portal offers one-stop access to specific content and services
like new, message broad and chat Allow visitor to personalized the interface and contents
Broker Model They bring buyers and sellers together and facilitate transaction
between them
Cont.. Virtual Mall Model
A site that hosts many merchant, service provider, brokers and other businesses
Act as as an intermediary between customers and the business it hosts by facilitating payment and guaranteeing a full refund if a merchant does not deliver in time
Virtual Community Model Website that attracts a group of user with a common interest
who works together on the site Sharing of information
Free Access Model Users are given something for free but with advertisement E-greeting
Electronic Business: Definitions and Concepts (cont.)
E-Business is any commercial activity conducted over networks linking electronic devices (typically computers). Often includes: Commercial transactions over the Internet, telephone, or fax; Electronic banking and payment systems; Trade in digitized goods or services; Servicing customers and collaborating with business partners;
and Procurement and inventory control.
E-business overview
CustomerCustomer Business supplieror partner
Business supplieror partnerBusinessBusiness
Consumer to consumerConsumer to consumer
Intranet
Business to consumerBusiness to consumer Business to businessBusiness to business
Extranet
BankBank
Intranet benefits Improved Communications
Keeps every employee informed and up to date Gives everyone (if they have permission) access to projects status,
team discussions, project collaboration tools, video conferencing, etc.
Document Access Provides easy access to documents employees need to perform
their jobs. Employee Training and Retention
Provides employees easy access to online training material, skill assessments, and other human resources content. This improves job satisfaction and employee retention.
Knowledge Retention Prevents knowledge loss which could occur as a result of
employees being unavailable for a while or leaving the company. New employees can get up to speed much easier.
Extranet benefits Sales Support Material
Provides business partners and customers online access to the latest sales support material from product manuals and data sheets to price lists and comparison charts.
Order Status Information Provides customers direct yet controlled access to the status of their orders,
freeing up the customer service staff to work on other issues. Employee Directories
Keeps partners informed as to the current staff assignments and contact information.
Inventory Status Gives business partners direct access to check inventory levels, back order
status, and shipping information. Knowledge Base Information
Provides easy access to frequently asked questions and customer support material. The information stored in this dynamic, knowledge base application could be made available to all partners/customers.
Toshiba’s Extranet Keeps Dealers on Time The Problem
dealers needed parts quickly The Solution
created a Web-based ordering entry system using an extranet
The Results reduces the cost per order reduces the networking cost of the Electronic Imaging
Division (EID) increases customer satisfaction
Intel Corporation Embracing the Web
The Problem slow, expensive, and frequently not up to date
distribution and communication process The Solution
established an e-business program using an extranet The Results
enhances competitive advantage by giving Intel’s customers better tools for managing transactions
brings substantial tangible savings
E-Business – example
Authormarketing
Authormarketing
Distributorinventory
Distributorinventory
Amazon.comsales
Information systemscoordination
contents
Amazon.comsales
Information systemscoordination
contents
Shippingtransporttracking
Shippingtransporttracking
Affiliatesales
Affiliatesales
Customerbuy
content
Customerbuy
content
Bankpayment
Bankpayment
deliver deliver
order
sale order
sales
critics
Credit cardclearance
returns
The Benefits of Electronic Business
Benefits to Customers Expands the marketplace to national and international
markets Decreases the cost of creating, processing, distributing,
storing and retrieving paper-based information Allows reduced inventories and overhead by facilitating “pull”
type supply chain management The pull type processing allows for customization of products
and services which provides competitive advantage to its implementers Reduces the time between the outlay of capital and the receipt of products and services
Supports business processes reengineering (BPR) efforts Lowers telecommunications cost - the Internet is much
cheaper than value-added networks (VANs)
Benefits to Customers Enables customers to shop or do other transactions 24 hours a
day, all year round from almost any location Provides customers with more choices Provides customers with less expensive products and services
by allowing them to shop in many places and conduct quick comparisons
Allows quick delivery of products and services in some cases, especially with digitized products
Customers can receive relevant and detailed information in seconds, rather than in days or weeks
Makes it possible to participate in virtual auctions Allows customers to interact with other customers in electronic
communities and exchange ideas as well as compare experiences
Benefits to Society Enables more individuals to work at home, and to
do less traveling for shopping, resulting in less traffic on the roads, and lower air pollution
Allows some merchandise to be sold at lower prices benefiting the poor ones
Enables people in Third World countries and rural areas to enjoy products and services which otherwise are not available to them
Facilitates delivery of public services at a reduced cost, increases effectiveness, and/or improves quality
Trends Driving e-Business Customer
Faster Service Self Service More product choice Product Knowledge
E-service Integrated sales and service Increases process visibility Convenient service delivery
Organizational Outsource Virtual distribution
Technology New wireless web application