E-Commerce Types and Scenarios PDF

Chapter 3 Different type of E-Commerce  Types of Commerce Commerce Electronic Physical or Traditional Commerce...

Chapter 3 Different type of E-Commerce  Types of Commerce Commerce Electronic Physical or Traditional Commerce Commerce Internet Commerce....... Business Consumer focused e-commerce focused e-commerce  Types of E - Commerce Business Consumer (Organization) (Individual) Business B2B B2C (Organization) (e.g.Alibaba) (e.g. Amazon) Consumer C2B C2C (Individual) (e.g. Priceline) (e.g. eBay)  Types of E-Commerce Business-to-Business (B2B) e-commerce: participants are organizations Business-to-Consumer (B2C) e-commerce: customers deal directly with the organization, avoiding any intermediaries Consumer-to-Business (C2B) e-commerce: customers provide their requirements. Consumer-to-Consumer (C2C) e-commerce: participants are individuals, with one serving as the buyer and the other as the seller Business & Technical Aspects of E-Commerce Fundamental E-Business Infrastructure Network & Internet Technologies Hardware, Software & Hosting concepts Security Mechanisms Payment Mechanisms Business Information Aspects of Technology Aspects E-Business of E-Commerce Business Models Business Practices Needs 3-tier Client-server (Marketing, Purchasing, architecture for E-commerce EDI, B2B etc.) Web Technologies Business Environment Support (Legal, Privacy, International, Ethical, etc.) E-Commerce System  Business-to-Business (B2B) Allows manufacturers to buy at a low cost worldwide Enterprises can sell to a global market Offers great promise for developing countries  Business-to-Business (B2B) In this case, both the buyer and the seller are business organizations. As described in Chapter 12, there are three types of systems, namely, buyer-oriented system, seller-oriented system, and virtual marketplace. In many situations, it is related to supply chain management. For example, the Virtual Bookstore (VBS) needs to order books from various publishers. The ordering process can be accomplished by using electronic data interchange.  Trading process network: B2B e- General Electric’s Trading Process Network (TPN) (www.tpn.geis.com) is an internet based trading network For buyers and sellers to carry out B2B e-commerce on the Internet. Unlike B2C e-commerce, it is buyer-driven rather than seller-driven. That means, a buyer submits a request to the system and then respective sellers respond to the request. In TPN, a typical purchase cycle (from the buyer’s perspective) is described as follows based on the information at www.tpn.geis.com.  Trading process network: B2B e- Step 1: A buyer determines the requirements, prepares the Request For Quotation (RFQ), and searches for potential suppliers (sellers). Step 2: The buyer submits the RFQ and invites potential suppliers to respond. Step 3: Suppliers obtain the RFQ for processing. Step 4: Interested suppliers bid for the request accordingly. Step 5: The buyer and suppliers can negotiate the bids online. Step 6: Finally, the buyer selects the best bid and completes the purchase.  Business-to-Consumer (B2C) Convenience Many goods and services are cheaper when purchased via the Web Comparison shopping Disintermediation: elimination of intermediate organizations between the producer and the consumer  Business-to-Consumer (B2C) In this case, the seller is a business organization whereas the buyer is a consumer. This emulates the situation of physical retailing and so it is commonly called electronic retailing. Typically, electronic stores are set up on the internet to sell goods to the consumers. For example, our VBS sells books to the consumers through the internet. Note here that the business drives.  Amazon: B2C e-commerce It is a typical example of B2C e-commerce in which a business sells already manufactured products to the consumers directly on the internet. Books are listed under different sections for ease of searching. This resembles organizing books in different bookshelves in a physical bookstore. Furthermore, a search facility is available for searching books according to user input. Our VBS also provides a similar function. Having selected a book, a consumer can put it into his shopping cards.  Amazon: B2C e-commerce Amazon.com makes use of data mining techniques to promote the selling of books. This is done by suggesting books to the customer based on the books in the shopping cart and the buying pattern of other customers with a similar profile. After shopping, consumers check out the books and pay by credit cards in most cases. Books are sent by mail or courier, whichever the customer prefers. Besides books, Amazon.com has now become a superstore (or a horizontal portal) by selling a variety of other things such as toys, wireless phones, cameras, and video games.  Consumer-to-Business (C2B) As explained later, this is a new form of commerce in which a consumer specifies the requirements to a business, which provides a product that meets these requirements. These requirements could be as simple as an acceptable price, or could involve considerable customization of an existing standard product, or creation of a new product. An example of this in the traditional commerce setting is a “made to measure” tailor. The key distinction is related to who is driving the specification of the product being purchased. Unlike B2C, there is a strong element of customization.  Priceline: C2B e-commerce Priceline (www.priceline.com) introduces a novel e-commerce application called the “demand collection system” It allows consumers to “name the price” and hence it is consumer driven not seller driven. According to the above definition, this is a C2B e-commerce application. Suppose that you want to buy an air-ticket. You can provide Priceline with your travel requirements (e.g. how many tickets you want to buy, departure/return date, departure/arrival city etc), the desirable price, and your credit card number. Then Priceline will try to find an airline that can meet your requirements. After finding a match, Priceline will buy the ticket (s) for you with your credit card. As you can “name the price”, the deal is final.  Priceline: C2B e-commerce (i.e. no alteration is allowed). Besides air-tickets, Priceline also handles the purchase of many other products/services such as cars, hotel rooms, long-distance calls and even mortgage.  Consumer-to-Consumer (C2C Often done through Web auction sites such as eBay Growth of C2C is responsible for reducing the use of the classified pages of newspapers to advertise and sell personal items  Consumer-to-Consumer (C2C This refers to situations where both the seller and the buyer are consumers. With the advent of e-commerce, on-line auctions provide an effective means for supporting C2C e-commerce. For example, our VBS can provide on-line auction services for customers to sell used books to other customers through the VBS web site. In addition, a virtual community can be formed.  eBay: C2C e-commerce Established in 1995, eBay (www.eBay.com) provides the world’s largest online trading service by means of online auctions. Basically, a user places an item on the eBay Web site for bidding. Other interested members then bid for it before the deadline. Where the English auction system is used, the highest bid wins. This is a typical C2C e-commerce example in which a consumer can sell to other consumers.  Consumer-to-Consumer (C2C Currently, eBay has more than 29 million members. By means of online auctions, they participate in the buying and selling of a wide range of items, including books, stamps, coins, music, etc. In addition to auctions, eBay creates a virtual community for its users to “talk” at the eBay Cafe: (a chat room) and to communicate with other users via the bulletin boards.  E – Commerce scenarios Let us examine some scenarios to see how e-commerce is changing our daily lives.  Retailing In the main form of traditional retailing, when we want to buy something, we need to visit physical shops. Very often, we may not be able to buy the best product in the market because we can visit only a few shops near our home or our office. This is to some small extent modified in other forms of traditional retailing such as mail order or phone purchasing. With e-commerce, shopping can be done at any time by using our fingertip instead of our “feet”.  Retailing Furthermore, the geographical barrier becomes a blur. A shop located in another country and a shop next to your home are both “one finger-click7’ away. By using search engines, we can quickly select and compare different brands of products around the world. For some products such as software and music, we can even download the goods instantly. In the future, we may Even send out intelligent software programs called “mobile agents” to shop around the internet for us.  Servicing The classified advertisement has always been the most popular channel for selling used items (e.g. used car). If you have ever sold secondhand items through classified advertisements, you may have experienced the following headache. Tens or even hundreds of interested buyers contact you by telephone. As you can communicate with them only one at a time, it is difficult for you to negotiate the best price. Even\ after all the items have been sold, you may still receive calls from potential buyers. With e-commerce, a more effective channel is emerging: the on-line auction for facilitating this kind of C2C commerce transaction. By means of an on-line auction, not only can the seller reach a large number of potential buyers, but he can also find the best price in the market.  Publishing The traditional publishing industry is based on a mass production model. Thus, there are only a few newspapers available and the format, layout, and news selection of these are done by the editorial staff. The degree of detail and slant on a particular news item is also fixed by the reporter or editorial staff. This is necessary for a mass production newspaper. By and large, the only choice the reader has is to select a particular newspaper. Once that is done he has to put up with the editorial layout and reporters’ choices, even though these might not coincide with his own interests. E-commerce makes personalization possible at very little extra cost. Let us imagine that we have a web-based newspaper system available. Each reader can specify his/her favorite newspaper template  Publishing Information can then be filled into the personalized template accordingly from the databases. With personalization, electronic newspapers will be published according to customers’ preferences (e.g. someone may want to see the headline news on the first page, while others may prefer to see the sports news or entertainment news on the first page). Obviously, this does not make economical sense in the traditional newspaper business. However, in the electronic newspaper scenario, the extra cost of printing a personalized newspaper is very small.  Supply chain management In its most common forms, traditional supply chain management is supply driven. In other words, goods are “pushed” through the supply chain. One disadvantage of this model is that distributors may keep an unnecessary inventory. In order to overcome this, many manufacturers have introduced Just-in-Time (JIT) supply systems. These systems have some element of “ pull ” in them in the sense that the manufacturer’s estimates of his needs for supplies in a short time horizon are used to determine purchases from suppliers, and suppliers must meet these orders within a specified time frame. Even here the manufacturer could easily see a buildup of the inventory of his manufactured products.  Supply chain management What is necessary from the manufacturer’s point of view is not simply JIT supply but also JIT production. Moreover, there may be a lot of paper-based information involved. With e-commerce, this whole process becomes demand-driven as controlled by the end consumer. That means, goods are now “pulled” down the chain by the customers. Thus, “supply chain management” becomes more “demand chain management.” This makes JIT production management and mass customization possible.