Prof. Anatoly Sachenko

Electronic CommerceSystems

I. LECTURE OVERVIEW

Foundation Concepts:

Electronic Commerce systems introduce the basic process components of e-commercesystems, and discuss important trends, applications, and issue in e-commerce.

Electronic Commerce:

Electronic commerce encompasses the entire online process of developing, marketing,selling, delivering, servicing, and paying for products and services. The Internet and related technologies and e-commerce websites on the World Wide Web and corporate intranets and extranets serve as the business andtechnology platform for e-commerce marketplaces for consumers and businesses in the basic categories of business-to-consumer (B2C), (C2C) e-commerce. The essential processes that should be implemented in all e-commerce applications – across control and security, personalizing and profiling, search management, contentmanagement, catalog management, payment systems, workflow management, event notification, and collaborationand trading – are summarized in Figure 7.5

e-Commerce Issues

: Many e-business enterprises are moving toward offering full-service B2C and B2B e-commerce portals supported by integrated customer-focused processes and internetworked supply chains asillustrated in Figure 7.11. IN addition, companies must evaluate a variety of e-commerce sector choices as outlinedin Figure 7.12, and integration or separation alternatives and benefit trades-offs when choosing a clicks and bricksstrategy and e-commerce channel, as summarized in Figure 7.21, 7.22, and 7.23.

B2C e-Commerce:

Businesses typically sell products and services to consumers at e-commerce websites that provide attractive Web pages, multimedia catalogs, interactive order processing, secure electronic payment systems,and online customer support. However, successful e-tailers build customer satisfaction and loyalty by optimisingfactors outlined in Figure 7.14, such as selection and value, performance and service efficiency, the look and feel of the site, advertising and incentives to purchase, personal attention, community relationships, and security andreliability. In addition, a Web store has several key business requirements, including building and marketing aWeb business, serving and support customers, and managing a Web store, as summarized in Figure 7.16.

B2B e-Commerce:

Business-to-business applications of e-commerce involve electronic catalog, exchange, andauction marketplaces that use Internet, intranet, and extranet websites and portals to unite buyers and sellers, assummarized in Figure 7.18 and illustrated in Figure 7.19. Many B2B e-commerce portals are developed andoperated for a variety of industries by third party market-maker companies called infomediaries, which mayrepresent consortiums of major corporations.

II. LEARNING OBJECTIVES

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Identify the major categories and trends of e-commerce applications.

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Identify the essential processes of an e-commerce system, and give examples of how they are implemented ine-commerce applications.

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Identify and give examples of key factors and Web store requirements needed to succeed in e-commerce.

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Identify and explain the business value of several types of e-commerce marketplaces.

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Discuss the benefits and trade-offs of several e-commerce clicks and bricks alternatives.

III: LECTURE NOTESSection I: Electronic Commerce Fundamentals

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Prof. Anatoly Sachenko

INTRODUCTION TO e-COMMERCE

Electronic commerce

is more than just buying and selling products online. Instead, it encompasses the entireonline process of developing, marketing, selling, delivering, servicing, and paying for products and services purchased by internetworked, global global marketplaces of customers, with the support of a worldwide network of business partners.Electronic commerce systems rely on the resources of the Internet, intranets, extranets, and other computer networks. Electronic commerce can include:

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Interactive marketing, ordering, payment, and customer support processes at e-commerce sites on the WorldWide Web

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Extranet access of inventory databases by customers and suppliers

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Intranet access of customer relationship management systems by sales and customer service reps

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Customer collaboration in product development via Internet newsgroups and e-mail exchanges.

Analyzing Yahoo! Inc.

We can learn a lot about the challenges and opportunities of retail electronic commerce from this case. Take a fewminutes to read it, and we will discuss it (See Yahoo! Inc. in Section IX).

THE SCOPE OF e-COMMERCE

Companies involved in e-commerce as either buyers or sellers rely on Internet-based technologies and e-commerceapplications and services to accomplish marketing, discovery, transaction processing, and product and customer service processes.The Internet, Intranets, and extranets provide vital electronic commerce links between the components of a business and its customers, suppliers, and other business partners. This allows companies to engage in three basiccategories of electronic commerce applications:

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Business-to-Consumer (B2C) e-Commerce

In this form of electronic commerce, businesses must develop attractive electronic

marketplaces to entice andsell products and services to customers. Companies may offer:1.e-commerce websites that provide virtual storefronts and multimedia catalogs.2. Interactive order processing3.Secure electronic payment systems4.Online customer support

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Business-to-Business (B2B) e-Commerce

:This category of electronic commerce involves both electronic business marketplaces and direct market links between businesses. Companies may offer:1.Secure Internet or extranet e-commerce websites for their business customers and suppliers.2.Electronic data interchange (EDI) via the Internet or extranets for computer-to-computer exchange of e-commerce documents with their larger business customers and suppliers.3.B2B e-commerce portals that provide auction and exchange markets for businesses.

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Consumer-to-Consumer (C2C) e-Commerce

:Successes of online auctions like e-Bay, allow consumers (and businesses) to buy and sell with each other in anauction process at an auction website.

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Online consumer or business auctions are an important e-commerce alternative for B2C or B2B e-commerce.

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Electronic personal advertising of products or services to buy or sell by consumers at electronic newspaper sites, consumer e-commerce portals, or personal websites is an important form of C2C e-commerce.

Electronic Commerce Technologies

: [Figure 7.3]

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