E-Commerce and E-Business

E-Commerce (EC): Electronic commerce encompasses the entire online process of

developing, marketing, selling, delivering, servicing, and paying for products and
services transacted on internetworked, global marketplaces of customers, with the support
of a worldwide network of business partners.

Electronic Commerce can be defined in several ways:

1. From a communication perspective, e-commerce is the ability to deliver products,
services, information, or payments via networks such as the Internet and the World Wide
Web.
2. From an interface perspective, e-commerce involves various information and
transaction exchanges: business-to-business, business-to-consumer, consumer-to-
consumer.
3. From a business perspective, e-commerce includes activities that directly support
commerce electronically by means of networked connections.
4. From an online perspective, e-commerce is an electronic environment that makes it
possible to buy and sell products, services, and information on the Internet.
5. From a structural perspective, e-commerce involves various media: data, text, web
pages, Internet telephony, and internet desktop video.
6. As a market, e-commerce is a worldwide network. A local store can open a Web
storefront and find the world at its doorstep-customers, suppliers, competitors, and
payment services.

E-business: Connecting critical business systems and constituencies directly via the
Internet, Extranets, and Intranets.

It goes beyond a web site on the Internet to affect all aspects of business, from strategy
and process to trading partners and the ultimate consumer. It combines the resources of
traditional information systems with the global reach of the Web.
E-business enables organizations to accomplish the following goals:

1. Reach new markets.

2. Create new products and services.
3. Build customer loyalty.
4. Enrich human capital.
5. Make the best use of existing and emerging technologies.
6. Achieve market leadership and competitive advantage.

E-Commerce Drivers
Several drivers promote e-commerce

1. Digital convergence: The digital revolution has made it possible for almost all
devices to communicate with one another.

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 2. Anytime, anywhere, anyone: Today’s e-commerce is available to anyone,
anywhere in the world, 24/7.
3. Changes in organizations: Empowerment of front-line workers.
Outsourcing and downsizing of large organizations.
Partnering.
Cross-functional business process.
Virtual designs
4. Widespread access to IT: The exponential increase in the number of PCs world-
wide means greater demand for information and communication for business as
well as pleasure.
5. Increasing pressure on operating costs and profit margins:
6. Demand for customized products and services.

Advantages and Limitations of E-Commerce

Advantages

Lower Cost
Economy
Higher Margins
Better Customer Service
Quick Comparison Shopping
Productivity Gains
Teamwork
Knowledge Markets
Information Sharing, Convenience, and Control
Swapping Goods and Services
Customization

Limitations
Security
System and Data Integrity
System Scalability
E-Commerce Is Not Free
Consumer Search Is Not Efficient and Cost-Effective
Customer Relations Problems
Products People Won’t Buy Online
Corporate Vulnerability
Lack of Blueprint for handling E-Commerce
High Risk of Internet Start-Up

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Types of E-Commerce

Three major e-commerce applications:

Business-to-Consumer (B2C)
Business-to-Business(B2B)-Extranets
Business-within-business (Intranets)

1. Business-to-Consumer (B2C)
B2C is the interface where consumers access a merchant’s Web site for the purpose of
buying merchandise or requesting service. Businesses develop attractive electronic
marketplaces to sell products and services to consumers.

2. Business-to-Business (B2B)
B2B is the alternative ways of executing transactions between buyers and sellers that are
business organization; a network of independent organizations and long-term trading
partners. B2B involves both electronic business marketplaces and direct market links
between businesses.

3. Business-within-business
The Intranet plays a role as a corporate and product information center and is strictly a
“within company” type of information exchange. This networked environment is
restricted to internal employees and customers, with firewalls to keep out non-employees.