UNIT – 1

What is e-Business?

 It is about performing business operations through electronic means. It refers to the use of computers and electronic
communications networks to do business. It gives ease of doing business.
 Example: Traditional Marketing Practices require more efforts in terms of money and time with ability to address few
customers. Where as, electronic marketing practices are cost effective, require less efforts and large customer base could
be entertained or reached.
 It caters monetary as well as non-monetary business transactions. It covers a wide range of activities, ranging from the
use of email and Electronic Funds Transfer, Internet based sales and transactions and web-based marketing. 

Why Study E-commerce?

 E-commerce majorly deals with monetary business transactions done through electronic means.
 E-commerce brings fundamental changes to commerce
 Traditional commerce:
o Consumer as passive targets
o Sales-force driven
o Fixed prices
o Information asymmetry

E-Business V/S E-Commerce

 E-Commerce is what you do…E-Business is what you are…

 e-Business has a broad scope than e-commerce
 E-Commerce is a subset of E-Business.

E- Business E- Commerce

 Enterprise designed for success Marketing

In the information age Selling
 Creates new sources of shareholder value Buying of products and services on the internet
 Building customer loyalty
 Optimizing business process
 Creating new products and services
 Managing risk and compliance
 Reaching new markets
 Enhancing human capital
 Harnessing technology
 Achieving market leadership

Features of E- Commerce

1) Ubiquity

 Available everywhere but may be hidden.

 Ubiquity lowers transaction costs for the consumer/buyer.

Cognitive Energy – mental effort needed to complete a task.

 Ubiquity reduces cognitive energy.

o Humans tend to seek options that require the minimum cognitive energy.
o Consider the mental effort needed to buy your book online vs. hunting for it at various book stores.
2) Global Reach

 e-commerce technologies enable a business to easily reach across geographic boundaries.

 Its really easy to understand how this feature can benefit business and consumers.

3) Universal Standards

 e-commerce is made possible through hardware (Internet) and software/content (World Wide Web)
 The Internet – In its infancy, the architects developed standards that are now globally recognized (TCP/IP)
 The World Wide Web – Standards are becoming #1 priority (XML, HTML, etc.)
 Since e-commerce is built on standard technology (XML, HTML), its really to integrate, aggregate, and summarize
information.

Standardization low Entry Cost More Competition

Standardization Info. Integration Lower price discovery opportunities

More Competition + Lower Price Discovery Opportunities = Lower Consumer Prices

4) Richness

 Advertising and branding are an important part of commerce.

 e-commerce can deliver video, audio, animation, etc. much better than other technologies (billboards, signs, etc.)
 However, its about as rich as television technology.

5) Interactivity

 Consumer/user can interact with the content.

 Here is where Web technology kick’s TV’s.
 TV is a passive activity
 Engaging consumer/user is a powerful feature.

6) Information Density

 The e-commerce technology reduces information costs raises the quality of information

How does the technology reduce costs? How does it raise quality?
Consider the old way to share information, i.e., paper, mail, voice communication, etc.

7) Personalization/Customization

 Ability of business to offer different sets of services to different groups/individuals are per their requirements.
 Different market segments with different needs exists. It is of utmost importance for a business to cater such disparate
market.
 Technology has made it simple for a business to offer personalized services.
 Example: Telecom Vendor offers different plans focusing on Talk Time, Data, Combo plan to attract majority of market
space.

E-Commerce Applications:

 E-commerce applications in educational sector

 E-commerce applications in financial segment
 E-commerce applications in entertainment
 E-commerce applications in the manufacturing sector

E-Commerce advantages can be broadly classified in three major categories −

 Advantages to Organizations
 Advantages to Consumers
 Advantages to Society