INFORMATION SYSTEMS

IE-PC 4115

SUMMARY OF CHAPTER 9:
e-COMMERCE SYSTEMS

SUBMITTED BY:
ROSEMARIBEL TORRES
ANGEL MAE QUICIO
BSIE 4-5

SUBMITTED TO:
ENGR. GERALD IAN SANTOS
SECTION I: e-COMMERCE FUNDAMENTALS

The cutting edge (border) for business today is electronic commerce (e-commerce).
Broadly defined, electronic commerce is a modern business methodology that
addresses the needs of organizations, merchants, and consumers to cut costs while
improving the quality of goods and services and increasing the speed of service
delivery. That means of electronic commerce consists of the buying, selling, marketing,
and servicing of products (business) or services over computer networks.

In the last two decades, Information Technology (IT) has played a vital role in
transforming the way business is conducted and technology that has truly been effective
in changing the fundamental ways of doing business is none other than known as the
Internet. Today several business applications are being developed on the Internet
because the Internet allows companies to link their suppliers, buyers, reduce cycle time
to market, thus enabling them to give competitive prices and operate profitability, and it
has opened up an enormous opportunity for doing business transactions between such
physically distant entities.

Nowadays, the Internet is known as the Information Superhighway in so many

dimensions, and one such dimension is e-commerce. The emergence (appearance) of
e-commerce over the past decade has radically transformed the economic landscape.
The increased numbers of Internet connections and the overall market response have
made it imperative (vital) for large and small enterprises to adopt new trade practices
and standards suited to electronic transactions. E-commerce has the prefix ‘E’ to
Commerce and ‘E’ is the reason why commerce will be out one day, and e-commerce
will come gushing into our lives very rapidly. This prefix does not only add electronics to
commerce, but it adds, energy, effectiveness, efficiency, economy, ease, edge, and
entry into new markets, and with a click, the entire world shrinks to a market, where
business can be easily done.

E-commerce is more than simply online shopping. It is doing commerce with the help of
computers; networks and commerce-enabled software. By using the Internet simple
click of a computer mouse, one can easily order anything from anywhere in the world.
The World Wide Web (www) has expanded the international marketplace and gives
consumers unlimited choices. The market plays a very important role in commerce. If
the stores are located away from the market areas, they are not likely to capture many
consumers. For those reasons, the business units either locate themselves within the
markets or organize themselves as markets. However, the concept of the market is
totally different in the case of e-commerce. The major difference between the real
market and e-market is that the real market exists as a physical entity and the stores
are physically located within the market, whereas the e-market and the e-store exist as
on some computer or server. E-commerce involves institutions (like government,
merchants, manufacturers, suppliers, consumers, etc.), processes (like marketing,
sales, payment, fulfillment, support, etc.), and computer networks, (like local networks,
Internet, corporate and commercial networks). E-commerce is still in its infancy stage,
however, the advantages of e-commerce are so high that it has already been
recognized by the international business community as a methodology to boost trade,
especially international trade.

SECTION II: e-COMMERCE APPLICATIONS AND ISSUES

E-commerce is transforming how businesses operate, both internally and externally. It

affects interactions with customers, suppliers, and other partners. As managers explore
different e-commerce options, companies are adapting their approaches and strategies
to leverage e-commerce effectively.
There have been significant stages in the application of e-commerce by businesses as it
continues to evolve. In this section, we will discuss various aspects of e-commerce,
including business-to-consumer (B2C) e-commerce, web store requirements, business-
to-business (B2B) e-commerce, e-commerce marketplaces, and the concept of clicks
and bricks in e-commerce. Let's begin by exploring the trends in e-commerce. B2C e-
commerce has progressed from basic online stores to incorporating interactive
marketing features that offer personalized shopping experiences for customers. It is
now moving towards fully integrated web stores that support various customer shopping
experiences. B2C e-commerce is also shifting towards a self-service model, where
customers can configure and customize the products and services they want to
purchase. This is made possible with the help of configuration software and online
customer support.
On the other hand, B2B e-commerce participants quickly transitioned from self-service
on the web to adopting configuration and customization capabilities, as well as
extranets to connect with trading partners. Similar to B2C, B2B e-commerce is also
trending towards the use of e-commerce portals. These portals serve as catalog,
exchange, and auction markets specifically designed for business customers within or
across industries.
Top-rated retail websites have several key features that attract and retain customers.
Here are some examples: 1. Selection and Value: These websites offer a wide range of
attractive products at competitive prices. They may also provide satisfaction guarantees
and excellent customer support after the sale. 2. Performance and Service: Retail
websites should provide fast and easy navigation, seamless shopping and purchasing
experiences, and prompt shipping and delivery of products. 3. Look and Feel: A visually
appealing web storefront with attractive web advertisements and email promotions can
engage customers. Including discounts, special offers, and advertising on affiliate sites
can also attract more customers. 4. Personal Attention: Websites that offer personalized
web pages, product recommendations, targeted advertisements, and interactive support
create a personalized experience for customers. 5. Community Relationships: Retail
websites can foster virtual communities of customers, suppliers, and company
representatives through newsgroups, chat rooms, and links to related sites. 6. Security
and Reliability: Customers value websites that prioritize the security of their personal
information and online transactions. Trustworthy product information and reliable order
fulfillment are also important for customer satisfaction. 7. Great Customer
Communication: Retail websites should make it easy for customers to find contact
information, check their order status online, and receive support from product
specialists.
For a successful retail business on the web, it is crucial to meet these requirements.
Whether it's a large web portal like Amazon.com or a smaller specialty retailer, the key
factors include developing a successful e-commerce business, making the website
easily discoverable by customers, offering personalized and efficient customer service,
and effectively managing both the online store and the physical retail location.
Business-to-business e-commerce involves businesses buying, selling, or trading with
other businesses. These transactions typically take place on e-commerce websites or
corporate intranets and extranets. Small and large businesses can now purchase a
wide range of products, from chemicals to construction materials, through online
marketplaces. There are different types of e-commerce marketplaces. A one-to-many
marketplace is hosted by a major supplier, who determines the product offerings and
prices. Many-to-one marketplaces attract multiple suppliers who compete for the
business of a major buyer. Some-to-many marketplaces bring together major suppliers
to offer a variety of products to a larger audience. Many-to-some marketplaces are
auction-based and involve multiple buyers and sellers.
Companies are realizing the importance of blending physical and virtual operations to
succeed. The decision to integrate e-commerce with traditional operations varies from
company to company. Some may choose to fully integrate, leveraging the strengths of
both the virtual and physical businesses. This offers benefits like brand sharing, joint
buying power, and distribution efficiencies. Others may opt for partial integration through
joint ventures or strategic partnerships, while others may completely separate their e-
commerce operations as an independent company.
Developing an e-commerce channel strategy involves answering important questions.
These questions include identifying the target audience and their desired actions,
determining ownership of the e-commerce channel within the organization, planning the
e-commerce channel alongside other channels, establishing a content management
process, assessing how the company's brands will translate to the new channel, and
deciding on marketing strategies for the channel itself. An e-commerce channel refers to
the marketing or sales channel set up by a company to manage its online activities.
How this channel is integrated with the company's traditional sales channels, such as
retail outlets or direct sales, is a significant factor in developing an e-commerce strategy.
Both integrating and separating e-commerce from traditional channels have benefits
and drawbacks. The decision on how to integrate the e-commerce channel depends on
whether the company's existing business operations can support a profitable business
model for the online channel.