Defining E Commerce and E-Business PDF

Defining E Commerce and E-Business What is Commerce ? Commerce is a division of trade or production which deals with the exchange of goods and services from producer to final consumer It comprises the trading of something of economic value such as goods, services, information, or mo...

Defining E Commerce and E-Business What is Commerce ? Commerce is a division of trade or production which deals with the exchange of goods and services from producer to final consumer It comprises the trading of something of economic value such as goods, services, information, or money between two or more entities. IS406 4  Defining E Commerce and E-Business What is E-Commerce? Electronic commerce (EC) refers to using the Internet and intranets to purchase, sell, transport, or trade data, goods, or services. EC is often confused with E-business What is E-business? A broader definition of EC that includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organization. What is the difference between e-commerce and e- business? IS406 5 E-Commerce VS. E-Business E-Commerce E-Business Ecommerce involves commercial transactions done E-business is conduct of business processes on the over internet. internet. Ecommerce is subset of E-business. Ebusiness is superset of Ecommerce. Ecommerce is use of electronic transmission In addition, E-business also includes the exchange medium that caters for buying and selling of of information directly related to buying and products and services. selling of products. Ecommerce usually requires the use of just a E-business involves the use of CRM’s, ERP’s that Website. connect different business processes. Ecommerce covers outward facing processes that E-business covers internal processes such as touch customers , suppliers and external partners. production, inventory management. It is more appropriate in B2C context. It is used in the context of B2B transactions. Ecommerce involves the mandatory use of internet. E-business can involve the use of internet, intranet or extranet. Example- Buying of pen from Amazon.com is Example- Using of Internet by Dell, Amazon for considered E-commerce. maintaining business processes like Online customer support, email marketing, supply chain management. IS406 7 Examples of E-Commerce Retailing and Marketing Entertainment and Travel Education and Learning Banking and Investment Health-Care Auction Personal and Business Service IS406 8  Major EC Concepts (Pure EC VS Partial EC) EC can be either pure or partial depending on the nature of its three major activities: 1. ordering and payments 2. order fulfillment 3. delivery to customers Each activity can be physical or digital , Thus, there are eight possible combinations as shown in Table 1.1 IS406 10 EC Organizations EC Organizations: Old-economy -> business offline. pure-play -> business online (virtual). click-and-brick -> some e-commerce activities. IS406 11 Electronic market and networks Electronic market (e-marketplace) An online marketplace where buyers and sellers meet to exchange goods, services, money, or information intranet An internal corporate or government network that uses Internet tools, such as Web browsers, and Internet protocols extranet A network that uses the Internet to link multiple intranets IS406 13  An EC Framework EC applications are supported by infrastructure and by the following five support areas: 1. People 2. Public policy 3. Marketing and advertising 4. Support services 5. Business partnerships IS406 15 Classification Of EC Classification Of EC By The Nature Of The Transactions And The Relationships Among Participants business-to-business (B2B) E-commerce model in which all of the participants are businesses or other organizations business-to-consumer (B2C) E-commerce model in which businesses sell to individual shoppers e-tailing Online retailing, usually B2C IS406 17 CONT. business-to-business-to-consumer (B2B2C) E-commerce model in which a business provides some product or service to a client business that maintains its own customers consumer-to-business (C2B) E-commerce model in which individuals use the Internet to sell products or services to organizations or individuals who seek sellers to bid on products or services they need IS406 18 CONT. Intrabusiness EC E-commerce category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization business-to-employees (B2E) E-commerce model in which an organization delivers services, information, or products to its individual employees IS406 19 CONT. consumer-to-consumer (C2C) E-commerce model in which consumers sell directly to other consumers collaborative commerce (c-commerce) E-commerce model in which individuals or groups communicate or collaborate online e-government E-commerce model in which a government entity buys or provides goods, services, or information from or to businesses or individual citizens IS406 20 Benefits of EC EC provides benefits to organizations, individual customers , and society. IS406 24 CONT. IS406 25 EC Business Models Business Model, a method of doing business by which a company can generate revenue to sustain itself Major Components of a Business Model: IS406 26 The Structure And Properties Of Business Models Two of the models’ elements: Revenue Model specifies how the organization, or the EC project, will generate revenue. Value proposition refers to the benefits, including the intangible ones that a company hopes to derive from using its business model. IS406 27 Functions of a Business Model Describe the supply and value chains. Formulate the venture’s competitive strategy and its long-range plans. Present the customer value proposition. Identify who will use the technology for what purpose Estimate the cost structure and amount and profit potential. IS406 29  EC Business Models EC Business Models 1. Online direct marketing 2. Tendering (bidding) system Model in which a buyer requests would-be sellers to submit bids; the lowest bidder wins. 3. Electronic marketplaces and exchanges 4. Viral marketing 5. Group purchasing IS406 30 The Limitations Of EC IS406 31 CONT. Ethical Issues One important area that may limit some EC project is ethics. Ethics , the branch of philosophy that deals with what is considered to be right and wrong. Implementing EC use may raise ethical issues ranging from monitoring employee e-mail to invasion of privacy of millions of customers whose data are stored in private and public databases. IS406 32