POLYT ECHNIC UNIVERSIT Y OF T HE PHIL IPPINES

Group 8
E-BUSINESS AND E-COMMERCE

Prepared by:
Badiola, Lian Mari

Benitez, Vhal Darrel

Guillermo, Dea Angelica
Mercene, Chealseah

Sarmiento, Clarizze Ann

BSA 2-10

Submitted to:

Prof. Marbella

September 2019
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WHAT IS E-COMMERCE?
E-commerce consists of the buying and selling of products or services over electronic
systems such as the Internet and other computer networks.
Electronic commerce commonly known as e-commerce or eCommerce.
• Electronic commerce was identified as the facilitation of commercial transactions
electronically, using technology such as Electronic Data Interchange (EDI) and
Electronic Funds Transfer (EFT).

Electronic Data Interchange:

EDI is the structured transmission of data between organizations by electronic means. It is
used to transfer electronic documents or business data from one computer system to
another computer system.

Electronic Funds Transfer:

EFT is the electronic exchange or transfer of money from one account to another.

HISTORY OF E-COMMERCE
History of ecommerce is unthinkable without Amazon and Ebay which were among
the first Internet companies to allow electronic transactions. Thanks to their founders we
now have a handsome ecommerce sector and enjoy the buying and selling advantages of
the Internet. Currently there are 5 largest and most famous worldwide Internet retailers:
Amazon, Dell, Staples, Office Depot and Hewlett Packard. According to statistics, the
most popular categories of products sold in the World Wide Web are music, books,
computers, office supplies and other consumer electronics.
Amazon.com, Inc. is one of the most famous ecommerce companies and is located in
Seattle, Washington (USA). It was founded in 1994 by Jeff Bezos and was one of the first
American ecommerce companies to sell products over the Internet. After the dot-com
collapse Amazon lost its position as a successful business model, however, in 2003 the
company made its first annual profit which was the first step to the further development.

At the outset Amazon.com was considered as an online bookstore, but in time it

extended a variety of goods by adding electronics, software, DVDs, video games, music
CDs, MP3s, apparel, footwear, health products, etc. The original name of the company
was Cadabra.com, but shortly after it become popular in the Internet Bezos decided to
rename his business "Amazon" after the world's most voluminous river. In 1999 Jeff
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Bezos was entitled as the Person of the Year by Time Magazine in recognition of the
company's success. Although the company's main headquarters is located in the USA,
WA, Amazon has set up separate websites in other economically developed countries
such as the United Kingdom, Canada, France, Germany, Japan, and China. The company
supports and operates retail web sites for many famous businesses, including Marks &
Spencer, Lacoste, the NBA, Bebe Stores, Target, etc.
Amazon is one of the first ecommerce businesses to establish an affiliate marketing
program, and nowadays the company gets about 40% of its sales from affiliates and third
party sellers who list and sell goods on the web site. In 2008 Amazon penetrated into the
cinema and is currently sponsoring the film "The Stolen Child" with 20th Century Fox.
According to the research conducted in 2008, the domain Amazon.com attracted
about 615 million customers every year. The most popular feature of the web site is the
review system, i.e. the ability for visitors to submit their reviews and rate any product on a
rating scale from one to five stars. Amazon.com is also well-known for its clear and user-
friendly advanced search facility which enables visitors to search for keywords in the full
text of many books in the database.
One more company which has contributed much to the process of ecommerce
development is Dell Inc., an American company located in Texas, which stands third in
computer sales within the industry behind Hewlett-Packard and Acer.

Launched in 1994 as a static page, Dell.com has made rapid strides, and by the end of
1997 was the first company to record a million dollars in online sales. The company's
unique strategy of selling goods over the World Wide Web with no retail outlets and no
middlemen has been admired by a lot of customers and imitated by a great number of
ecommerce businesses. The key factor of Dell's success is that Dell.com enables
customers to choose and to control, i.e. visitors can browse the site and assemble PCs
piece by piece choosing each single component based on their budget and requirements.
According to statistics, approximately half of the company's profit comes from the web
site.

In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune
500 list and 8th on its annual Top 20 list of the most successful and admired companies in
the USA in recognition of the company's business model.
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BRIEF HISTORY
History of ecommerce is a history of a new, virtual world which is evolving
according to the customer advantage. It is a world which we are all building together brick
by brick, laying a secure foundation for the future generations.
• The growth and acceptance of credit cards, automated teller machines (ATM) and
telephone banking in the 1980s were also forms of electronic commerce.
• Another form of E-Commerce was the airline reservation system, for example Sabre
in the USA and Travicom in the UK.

• By the end of 2000, many European and American business companies offered their
services through the World Wide Web.
• Since then people began to associate a word “E-Commerce" with the ability of
purchasing various goods through the Internet using secure protocols and electronic
payment services.

THE COMMERCE VALUE CHAIN (CVC)

1. Attract customers
Advertising, marketing: get and keep customer interest
2. Interact with customers
Catalog, sales: turn customer’s interest into order
3. Act on customer instructions
Order management: capture customer’s order , process payment and fulfillment of
order
4. React to customer requests
Customer service: provide order tracking and technical support

COMPONENTS OF THE CVC

1. Attract Customers
 Making an impression on customers and drawing them into the information
about products and services for sale.
 Achieved by paid advertising on Web sites, e-mail, television, print, or other
forms of advertising and marketing.
2. Interact with Customers
 Turning customer’s interest into orders.
 Content-oriented phase, including catalog, publications, or other information
distributed by WWW, e-mail, or CDs etc.
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 Content may be static or dynamic.

a. Static content:

o Prepared pages that are sent to a customer on request.

o Must be re-created whenever the information changes.
b. Dynamic content:

o Generated at the time of the request.

o Taken from information sources such as databases.
o Used when the content changes frequently or when the natural storage
medium for the information is a database.

3. Act on Customer Instructions

 When a customer makes a purchase, there must be ways to capture the order,
to process payment, to handle fulfillment, and other aspects of order
management.
 Order processing:
o Includes the ability to group several items together for later
purchase (e.g., shopping cart).
o Allows the customer to add items, remove items, change the
quantities and so on.
o Computes additional charges (shipping costs, taxes).
o Presents the customer with an itemized order form including all
charges.
 Payment processing:
o Once the order is final, the buyer can pay for it.
o There are several payment methods (e.g., credit cards, purchase
orders, etc.), one of which must be agreed up on by the buyer and
the seller.
o The seller must be careful about imposing requirements on the
buyer: If the buyer must have a special software package to handle
payment, the population of buyers would be much smaller.
o Completing this process does not necessarily mean that funds have
been transferred into the seller’s bank account: Some payment
instruments extend credit to buyers to make the actual payment
later.
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o Once the order is final, the buyer can pay for it.
o There are several payment methods (e.g., credit cards, purchase
orders, etc.), one of which must be agreed up on by the buyer and
the seller.
o The seller must be careful about imposing requirements on the
buyer: If the buyer must have a special software package to handle
payment, the population of buyers would be much smaller.
o Completing this process does not necessarily mean that funds have
been transferred into the seller’s bank account: Some payment
instruments extend credit to buyers to make the actual payment
later.
4. React to Customer Inquiries
 After a sale has been completed, the customer may have some questions or
may require some service.
 Some questions must be answered by a person, some can be answered with an
appropriate information system.
 A transaction system that keeps track of all of a customer’s purchases can
generate a summary statement.
 A more complicated example: How the system handle a failure when
delivering a digital good? (e.g., a network error causes the download of the
digital good to fail.)
 Customer needs proof of purchase (receipt) which is accepted by the
fulfillment server for another download.
 Designing systems that eliminate the needs for customers to ask questions
(e.g. the use of receipt above).

ADVANTAGES OF E-COMMERCE
• Faster buying/selling procedure, as • Easy to start and manage a business.
well as easy to find products.
• No need of physical company set-
• Buying/selling 24/7. ups.
• Low operational costs and better • Customers can easily select products
quality of services. from different providers without
moving around physically.
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DISADVANTAGES OF E-COMMERCE
• There is no guarantee of product • Site crash
quality.
• Some products are difficult to buy
• There are many hackers who look for online
opportunities, and thus an
• Lack of privacy
ecommerce site, service, payment
gateways, all are always prone to • Tax Issue
attack.
• Huge technological cost
• Legal issues
• Shipping problems
• Late delivery

TYPES OF E-COMMERCE
1) BUSINESS TO BUSINESS (B2B)
 B2B can be open to all interested parties or limited to specific, pre-qualified
participants (private electronic market).
 Companies doing business with each other such as manufacturers selling to
distributors and wholesalers selling to retailers.

2) BUSINESS TO CONSUMER (B2C)

 Businesses selling to the general public typically through catalogs utilizing
shopping cart software.
 B2C is the indirect trade between the company and consumers.
 It provides direct selling through online.
 If you want to sell goods and services to customer so that anybody can purchase
any products directly from supplier’s website.

3) CONSUMER TO BUSINESS (C2B)

 A consumer posts his project with a set budget online and within hours
companies review the consumer's requirements and bid on the project.
 The consumer reviews the bids and selects the company that will complete the
project.
 C2B empowers consumers around the world by providing the meeting ground
and platform for such transactions.
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4) CONSUMER TO CONSUMER (C2C)

 It facilitates the online transaction of goods or services between two people.
 Though there is no visible intermediary involved but the parties cannot carry out
the transactions without the platform which is provided by the online market
maker such as eBay.

E-COMMERCE EXAMPLES:
• An individual purchases a book on the Internet.
• A government employee reserves a hotel room over the Internet.
• A business buys office supplies on-line or through an electronic auction.
• A manufacturing plant orders electronic components from another plant within the
company using the company's intranet.

REFERENCES
Collins, J. (2001). Good to Great: Why Some Companies Make the Leap... and
Others Don't. Retrieved from https://www.ecommerce-land.com/history_ecommerce.html

G. Winfield Treese and Lawrence C. Stewart. Designing Systems for Internet

Commerce (2nd edition): Chapters 1 & 2. Addison Wesley.
Guevarra, L. M. (2018). E-commerce: The Past, Present, and Future. Retrieved from
https://blog.spiralytics.com/past-present-future-ecommerce
Laudon, K.C. and Traver C.G. (2008). E-Commerce: Business, Technology, Society,
Second Edition (Hardcover). Retrieved from https://www.ecommerce-
land.com/history_ecommerce.html
Martin (2014). E-Commerce – A Complete Guide. Retrieved from
https://www.cleverism.com/e-commerce-complete-guide/