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B2C E-COMMERCE

The following are some examples of technologies and applications used for providing service and support: o E-mail confirmation: In most cases, the e-mail confirmation provides the customer with a confirmation number that the customer can use to trace the product or service. E-mail confirmation promises the customer that a particular order has been processed and that the customer should receive the product/ service by a certain date. o Periodic news flash: They used to give customers with the latest information on the company or on a particular product or offering.

o Online Surveys: Their results can assist the e-commerce site to provide better services and support to its customers based on what has been collected in the survey, even though online surveys are mostly used as a marketing tool.
o Help desks: They provide answers to common problems or provide advice for using products or services. They are used for the same purpose as in traditional businesses. o Assured secure transactions & assured online auctions: They guarantee customers that the e-commerce site covers all the security and privacy issues. As many customers still do not feel comfortable conducting online business, the security and privacy services are especially important

Amazon.com
Amazon.com is one of the leaders in B2C e-commerce. Amazon.com opened its virtual stores in July 1995 with a mission to use the Internet to transform book buying into the fastest and easiest shopping experience possible. Amazon.com offers numerous products and services including books, CDs, videos, DVDs. toys, games, electronics, free electronic greeting cards, online auctions, and much more. In addition to an extensive catalog of products, Amazon.com offers a wide variety of other shopping services and partnership opportunities.Amazon.com's business model is based on the merchant model . By creating customer accounts, using shopping carts, and using the 1-click technology, Amazon.com makes the shopping experience fast and convenient. E-mail is used for order confirmation and customer notification when new products that suit a particular customer become available. Allowing customers to post their own book reviews, creates an open forum between the storefront and its customers.

Using Amazon.com a prospective shopper can do the following:

• Search for books, music, and many other products and services
• Browse virtual aisles in hundreds of product categories from audio books, jazz, and video documentaries to coins and stamps available for auction. • Get instant personalized recommendations based on the shopper's prior purchases as soon as the shopper logs on. • Sign up for the Amazon.com e-mail subscription service to receive the latest reviews of new titles in categories that interest the customer. • Amazon.com offers a safe and secure shopping experience by guaranteeing its shopping and auction services. It also offers 24-hour-a-day, 7-days-a-week help desk services to assist shoppers who experience difficulties.

Advantages of B2B :

Direct interaction with customers.
Focused sales promotion.

Building customer loyalty.
Scalability.

Savings in distribution costs.

Tools and Techniques at the disposal of B2B 1. 3. 4.Use of pricing as a tool : eg:-Apple e-commerce site 2. Use of generic models which are known for efficiency as well as personalized attention to various business customers. Use of comparison shopping . Use of application service provider model.

price history.and after the sale information provided Confidential transaction between business Benefit Neutral an nonaligned with seller or buyer Users are prequalified and regulated Pricing mechanism is self regulating Clearing and settlement services provided .Common elements of B2B Exchanges Element Centralized market space Standardized documentation Price quotes.

and Intel. . They are open to all. 2.Business models for B2B applications. organizations attempt to sell their products or services to other organizations electronically. the buyer is an organization. from their own private e-marketplace and/or from a third-party site. In the B2B sell-side marketplace. Electronic Exchanges : E-marketplaces in which there are many sellers and many buyers are called public exchanges (in short. however. usually from their own private e-marketplace. and frequently are owned and operated by a third party. Examples are major computer companies such as Cisco.exchanges). Buy-Side Marketplaces : The buy-side marketplaces a model in which organizations attempt to buy needed products or services from other organizations electronically. This model is similar to the B2C modeling which the buyer is expected to come to the seller’s site. and place an order. 1. view catalogs. IBM.Sell-side marketplaces:In the sell-side marketplace model. 3.

They disseminate information to employees over the intranet. In addition. employees can buy discounted insurance.but also within organizations. A business and its employees(B2E): Companies are finding many ways to do business electronically with their own employees. Such activity is referred to as intrabusiness EC or in short. . travel packages. many companies have electronic corporate stores that sell a company’s products to its employees.intrabusiness. Intrabusiness can be done between : 1. for example take training classes electronically. and they can electronically order supplies and material needed for their work. Also. usually at a discount.INTRABUSINESS AND BUSINESS-TO-EMPLOYEES E-commerce can be done not only between business partners. and tickets to events on the corporate intranet.

Transactions of this type can be easily automated and performed over the intranet. E-Commerce Between and Among Corporate Employees : Many large organizations allow employees to post classified ads on the company intranet. which buy goods from the main company. An example would be company-owned dealerships. products.INTRABUSINESS AND BUSINESS-TO-EMPLOYEES 2. . through which employees can buy and sell products and services from each other. E-Commerce Between and Among Units Within the Business (c-commerce): Large corporations frequently consist of independent units. and services from each other. or strategic business units (SBUs).which ―sell‖or ―buy‖materials. This type of EC helps in improving the internal supply chain operations 3. An SBU can be considered as either a seller or a buyer.

C2C is conducted in several ways on the Internet.com. like eBay.infospace. This wider audience greatly increases the supply of goods and services available and the number of potential buyers.com. selling and buying on auction sites is exploding.Customer-to-Customer E-Commerce E-commerce refers to e-commerce in which both the buyer and the seller are individuals (not businesses).com. much smaller numbers you might find locally.com or auctionanything.rather than a local. where the best-known C2C activities are auctions.com/info. in dozens of countries. 1. compared with the much. . 2. Internet-based classified ads have one big advantage over these more traditional types of classified ads: They offer a national. CLASSIFIED ADS : People sell to other people every day through classified ads in newspapers and magazines. and they can use specialized sites such as buyit. audience.cls2k contains a list of 3 million job openings and about500.com or bid2bid.000 cars. Most auctions are conducted by intermediaries. For example.C2C AUCTIONS : Regardless where people are. Consumers can select general sites such as eBay.

Most classified ads are provided for free. classified ad Web sites accept no responsibility for the content of any advertisement. A password is used to authenticate the advertiser for future changes in an ad. Advertisers are identified bye-mail address. The major categories of classified ads are similar to those found in the newspaper: • Vehicles • Real estate • Employment • General merchandise • Collectibles • Computers • Pets • Tickets • Travel .Customer-to-Customer E-Commerce Like their counterparts in printed media.

Be very careful before you purchase any personal services. they usually buy from strangers. tax preparers. investment clubs. handy helpers.com Another one is escrow services.receiving payments.Some are in the classified ads. but others are listed in specialized Web sites and directories. SUPPORT SERVICES TO C2C : When individuals buy products or services from individuals. deliver the goods to the buyer and the money to the seller (for a fee). PERSONAL SERVICES : Numerous personal services are available on the Internet (lawyers. Some are for free. and preventing fraud are critical to the success of C2C. . dating services). and only after making sure that the seller delivers what was agreed upon. One service that helps C2C is payments by companies such as Paypal.intermediaries that take the buyer’s money and the purchased goods. some for a fee.Customer-to-Customer E-Commerce 3.com is another example 4. The issues of ensuring quality. Fraud or crime could be involved. Inforocket.

com(travel.Another example is reverseauction.Consumers-to-businesses (C2B) In C2B (also called a reverse auction or demand collection model).telephone.autos. An example is Priceline.consumer electronics) . and Priceline tries to find a supplier to fulfill the stated need. and suppliers compete to provide the product or service to consumers.mortgages) where the customer names a product and the desired price.com(travel. consumers make known a particular need for a product or service.

state. and those working in the public sector.example http://www. such as Social Security and pension benefits.dti. .gov: the United States' official web portal.E-government As e-commerce matures and its tools and applications improve. G2C can take place at the federal. and local levels. directly to recipients’ bank accounts or to smart cards. county.E-government is the use of Internet technology in general and e-commerce in particular to deliver information and public services to citizens. rather than private individuals (G2C). Such G2C communication most often refers to that which takes place through Information and Communication Technologies (ICTs). though there are many other examples from governments around the world.in which governments (usually state or national) transfer benefits. state. E-government applications can be divided into three major categories: • Government-to-Business is the online non-commercial interaction between local and central government and the commercial business sector.gov. but can also include direct mail and media campaigns. etc). city. • Government-to-Citizen is the communication link between a government and private individuals or residents. greater attention is being given to its use to improve the business of public institutions and governments (country.uk is a government web E-government site where businesses can get information and advice on e-business 'best practice'.One such Federal G2C network is USA. business partners and suppliers. An example is electronic benefits transfer (EBT).

. G2E services also include software for maintaining personnel information and records of employees . along with G2C. bring them together and to promote knowledge sharing among them It also gives employees the possibility of accessing information in regard to compensation and benefit policies. and G2B the online non-commercial interaction of local and central Government and the commercial business sector. Note:G2G is currently not too much in India. authorities.G2E is adopted in many countries including the United States.G2E is an effective way to provide E-learning to the employees. training and learning opportunities and civil rights laws. G2E is one out of the four primary delivery models of e-Government . departments.E-government • Government-to-employees (abbreviated G2E) is the online interactions through instantaneous communication tools between government units and their employees. Hong Kong and New Zealand •Government-to-Government (abbreviated G2G) is the online non-commercial interaction between Government organizations. Its use is common in the UK. the online non-commercial interaction of local and central Government and private individuals.

•WAP takes a client server approach. •It provide access to anyone. using wireless devices. we call it m-commerce. •These devices utilize wireless networks to connect cell phones and handheld devices to the web. such as using cell phones to access the Internet. anytime and anywhere. •Wireless Application Protocol define the standard for how content from the internet is filtered for mobile communication. •It incorporates a relatively simple microbrowser into the mobile phone requiring only limited resources on the mobile phone .Mobile commerce (m-commerce): When e-commerce is done in a wireless environment.

interests. prices. and past purchases. . and elsewhere via mobile device.(which is not possible in other mediums like TV . They allow a merchant to change the product or service to suit the purchasing behavior and preferences of a consumer.participant in the process of delivering goods to the market. Customer convenience enhanced  Global Reach: ( total number of users or customers an e-commerce business can have ) Commerce is enabled across cultural and national boundaries seamlessly and without modification. are shared by all of the nations in the world. and delivery terms of a specific product anywhere in the world • Richness: Information that is complex and content rich can be delivered without sacrificing reach. at work. •Personalization/Customization: E-commerce technologies enable merchants to target their marketing messages to a person’s name. •Interactivity: E-commerce technologies allow two-way communication between the merchant and the consumer.Features of E-commerce •Ubiquity it is available everywhere. anytime Marketplace is created or extended beyond traditional boundaries and removed from a geographic location. TV and magazines. at home. The Internet and web can deliver to an audience of millions rich marketing messages in a way not possible with traditional technologies like radio. and therefore of conducting ecommerce. radio) Similar to face-to-face experience but on a massive global scale • Information density: The total amount and quality of information available to all market participants is vastly increased and is cheaper to deliver. ECommerce technologies have changed the traditional tradeoff between Richness and the Reach. It make the consumer a co. Shopping can take place anywhere. Easily find all the suppliers. Marketplace includes potentially billions of consumers and millions of businesses world wide • Universal standards: The technical standards of the Internet.

•Traditional commerce checks product availability by phone. On the other hand. in ecommerce. and EDI. The followings are some examples. fax and letter. On the other hand. phone yet e-commerce by e-mail. and Vatan Computer .Traditional commerce versus E-commerce Although the goals and objectives of both e commerce and traditional commerce are the same — selling products and services to generate profits—they do it quite differently. Just about all medium and large organizations have some kind of e-commerce presence. flyers. •Traditional commerce presents product information by using magazines. • Traditional commerce communicates by regular mail. and internal networks. web sites. ecommerce gets by email. •Traditional commerce generates orders and invoices by printed forms but e commerce by email. Toys-R-Us. and web sites.However. •Traditional commerce gets product acknowledgments by phone and fax. It is important to notice that currently many companies operate with a mix of traditional and ecommerce. GoldPC. web sites. The major difference is the way information is exchanged and processed: •In e-commerce there may be no physical store. The Web and telecommunications technologies play a major role. and in most cases the buyer and seller do not see each other. WalMart Stores. ecommerce checks by e-mail. e commerce presents by using web sites and online catalogs.

rather than just locally or regionally.E-Business Strategies The four generic business strategies for achieving a profitable business are : •Differentiation : involves setting your firm or product apart from the competition by establishing some unique property or consumption experience that your competitors do not have. or cannot duplicate. •Scope : A scope strategy sets out to compete in all markets around the globe. Specialization strategists seek to become the premier provider in a small market segment or niche. E Business Strategy can be summarized as the strategies governing E Businesses through calculated information dissemination. this because it will allow them to charge a lower price while still making a profit. Information dissemination has been widely regarded as the forte of ebusiness. a unique resource. It is essential that other firms in the marketplace do not have access to. or a low cost supplier. is a plan to compete within a narrow market segment or product segment. which uses information technology in a most efficient manner . •Focus : A focus strategy on the other hand. • Cost : A firm that adopts a cost strategy must have a unique set of business processes.

which will ensure better coordination between the wholesalers and the retailers of various products. Customer service and customer relationship management: effective e-business strategies would involve better customer service and customer relationship management ensuring the highest level of consumer satisfaction. . which would include the timely delivery of goods right at the doorstep of the consumer.Supply chain management: effective management of the supply chain can be handled with the help of e-business strategies. E business is targeted at providing the customer-friendly services. Everything ranging from automobiles to electronic gizmos can be bought over the Internet in a hassle free manner under the aegis of sound supply chain management.E-Business Strategies E business gives a business the opportunity to open its portal to the global market and become a part of the global business community. Better integration of the supply chain right from the source till the final delivery of the product can be effectively implemented using e-business strategy.A state-of-the-art E Business Strategy would generally include: 1. 2. The most important feature of e-business is that the helps businesses move on to the international scene at minimal cost but with maximum efficiency .

• The tools and pillars of e-business strategies include : Acceptance of payments over the Internet. .E-Business Strategies • Inventory and service management integration: E-business strategies can also help in better inventory and service management integration through formulating specific plans for inventory accumulation and purchasing machinery and equipment which will avoid unnecessary purchases which can lead to higher expenditures entailing different tax implications. revenue made from paid marketing alliances. on-line trading and auction deals over the Internet. Apart from regular sources. e-business strategies can generate revenue from maintenance of current channel integrity. E-business strategies will also differ for small and medium-sized businesses. online advertising. Tactical operations alignment: tactical operations directed towards short-term goals as opposed to strategic planning aimed at long term goals can be better coordinated implementing the e-business strategies. revenues derived from franchisees and subscriptions.

Driving Forces of E-commerce The various environmental business pressures on companies today can be grouped into three categories : market .Following are few parameters which works as driving force for market: Strong Competition : competition is the part of any business Global Economy : in present scenario world becomes a global village and there are standard norms in market for business. 2. 3. 6. 4. . 5. social and technological • Market and Economic Pressure : Business is a pressure game. Extremely low labour cost in some countries Frequent changes in market demands Increasing expectations of consumers Awareness among consumers 1.

cheap and more secure technology is coming to market. 3.environment and government are the part of business. . 3.Driving Forces of E-commerce • Social and Environmental Pressures :Society.In present time every day new.making e-commerce cheap and secure medium of doing business. Rapid technological changes New technologies Information overload 1.These are the factors which works like driving force for ecommerce Government regulations Reduction in government subsidies Rapid Political changes Technological Pressures : This is the most critical factor for e-commerce. • 1. 2. 2.

It facilitates the creation of a computer and network infrastructure that enables the coordination and integration of business processes.low cost delivery channels for new and old products aimed at either existing customers or new customers segments. Digital convergence: Convergence has two dimensions: a) Convergence of content : It enables sophisticated information publishing and browsing tools.wireless and cable wiring systems. b) Convergence of transmission : Convergence of transmission compresses and stores digitized information so that it can travel through existing phone . .Driving Forces of E-commerce 4.Convergence of transmission results in easier access to networks and in the creation of new.

The Driving Forces of Electronic Commerce •Business pressures •Organizational responses •The role of Information Technology (including electronic commerce) .

performance ratio . NAFTA) Extremely low labor cost in some countries Frequent and significant changes in markets Increased power of consumers Changing nature of workforce Government deregulation of banking and other services Shrinking government budgets subsides Increased importance of ethical and legal issues Increased social responsibility of organizations Rapid political changes Societal and environmental pressures Technological pressures Rapid technological obsolescence Increase innovations and new technologies Information overload Rapid decline in technology cost Vs.Major Business Pressures Market and economic pressures Strong competition Global economy Regional trade agreements (e.g.

Political.Organizational Responses External Environment. Economic. Social. etc Organization Structure and the Corporate Culture The Organization’s Strategy Management and Business Process Information Technology Individual and Roles Framework for Organizational and Societal Impacts of Information Technology .

Business Process Reengineering – Reducing cycle time and time to market – Empowerment of employees and collaborative work – Knowledge management – Customer-focused approach – Business alliances — virtual corporation .

Everything Will Be Changed • Improving Direct Marketing – Product promotion – New sales channels – Direct savings – Time-to-market (reduced cycle time) – Customer service – Brand or corporate image .

Other Changes in the Workplace • Transforming Organizations – Work will change • Technology learning • Organizational learning • Redefining Organization – New product capabilities – New business models .

Other Changes in the Workplace (cont. shorter cycle time. electronic bidding and procurement • Impacts on Finance and Accounting – Electronic payment systems. mass customization. distance learning . automating back office. electronic cash. home banking. integration (ERP). training.) • Impacts on Manufacturing – Pull processing. electronic stock trading • Human Resource Management – Electronic recruiting.

Institutions like Government.senior public officials and government . suppliers . . manufacturers.banks and financial institutions are the key to implement to e-commerce.it is the politics of Governance initiatives that probably hold the key . The role of these institutions are given below.consumers . Government is responsible to make the policy and rules of e –commerce in any country . E-commerce projects have made slow progress in many Countries because they don't serve the political selfinterests of the major stakeholders. Government: Despite the importance of technological and skill infrastructures.Component of E Commerce components Institution Process Networks Institutions of E Commerce : Institutions plays major role in the success of ecommerce .merchants.

make deposits. Merchants holds the key for the success of the e-commerce since they are going to invest the money . It is very essential to change the mind set of consumers. .So they can start using the e-commerce then only it will be successful Banks: Now a days banks are rapidly going for e-commerce to make their working efficient .transfer funds between accounts .they must show willingness and courage to implement ecommerce in their traditional business . Consumers: we know that consumer are key of any business so consumers must aware about the latest development in e-commerce . ATM or 24-hours tellers are electronic terminals that let our bank almost anytime. To withdraw cash . they must have suitable infrastructure to support the e-commerce then only they can get the benefits of e-commerce technology . Merchants are very essential part of any type of business. Suppliers: Suppliers are equally important component of e-commerce .Component of E Commerce Merchants: As we know that every institute in e-commerce must be equally competitive for the success of the e-commerce .

credit and debits cards. Mostly Transactions take place online through Cyber Cash . Now more and more marketing becomes on-line and web base. •Sales are another important department of business activities so it must support e-commerce Now a days Mode of payments becomes electronic. Some very important parts of the process are as follows : Marketing Sales Payment Support and Services •The complete business is the game of the marketing now a days . Merchants are tie-ups with banks for online payment . •After sale service and support is the backbone of any business so more and more companies using the e-commerce to provide this service through telephone .mail and internet . .Component of E Commerce Process of E-commerce: The successful implementation of the e-commerce depends on perfect processes of the E-commerce . so marketing process should be compatible to e –commerce .

firm and industry value chains. To understand e-commerce. and taxation will need to be addressed. So the major disciplines of EC are: . including information technologies developed over the past 50 years. E-commerce is primarily a technologically driven occurrence. with the Internet and the Web at the core.Interdisciplinary nature of EC A multidisciplinary approach is necessary in order to understand e-commerce because no single academic discipline covers all facts of the e-commerce phenomenon. business models. Finally. However. Public policy issues such as equal access. one must understand some basic business concepts such as: industry structures. and consumer behavior. equity. the impact on society must be considered: global e-commerce can have consequences for individuals concerning their intellectual property and privacy rights. beyond the infrastructure are the business purposes that drive the phenomenon: the changing business models and strategies that will transform old companies and spawn new ones. content control. They must also comprehend the nature of electronic markets and information goods.

•Economics : EC is influenced by economics forces and has a major impact on world and country economies.security and payment systems.Issues such as using the internet as a substitute for a stock exchange and fraud in online stock transactions are part of this field. •Management information systems(MIS) : It is responsible for the deployment of EC. .like online marketing strategies to interactive kiosks.Interdisciplinary nature of EC •Marketing : Many issues of marketing in traditional commerce are relevant to EC for eg:advertisement strategies.planning.Other issues are unique to EC.multimedia and network technology •Consumer behavior and psychology : consumer behavior is the key to success of B2C trade and so is the behavior of the seller •Finance : the financial markets and banks are one of the major participant in EC. •Computer sciences : Many issues like languages.cost benefits of various advertisement strategies.It covers issues ranging from system analysis to system integration.

communication and entertainment publishing. . •Management : EC efforts need to be managed properly and because of the interdisciplinary nature of EC.Also EC is of interest to engineering.For eg :auditing electronic transactions presents a challenge for the accounting profession.health care.Interdisciplinary nature of EC •Accounting and auditing :The back office operations of electronic transactions are similar to other transaction in some respect but different in others.its management may require new approaches and theories •Business law and ethics : legal and ethical issues are extremely important in EC.especially in a global market. •Others : Several other disciplines are involved in various aspects of EC to a lesser extent for eg:linguistics.

.Business of all sizes in all sectors are using the Internet in many different ways . A firm engaging in e-business can have a nationwide or a worldwide presence. for internal activities such as knowledge sharing and new product development.to work with partners and suppliers.. Advantages : •Worldwide Presence:This is the biggest advantage of conducting business online. . too. had a flourishing business selling PCs throughout the U. IBM was one of the first companies to use the term e-business to refer to servicing customers and collaborating with business partners from all over the world.S. for procurement. Dell Inc.Advantages of E-Business Top concerns for CEO's in today's business environment are: •the threat posed by competitors •controlling costs •finding new opportunities •improving responsiveness •better customer focus and service E-business is capable of delivering these benefits. only via telephone and the Internet till the year 2007. and much more.

if companies rethink their business with regard to the Internet. The strategy that the firms can pursue.has emerged on account of e-business. •Cost-effective Marketing and Promotions: Using the web to market products guarantees worldwide reach at a nominal price. they will find it impossible to maintain the advantage and earn profits. Affiliate marketing -. Hence.com is another success story that helps people buy internationally from third parties. ensure that the advertiser only pays for the advertisements that are actually viewed. . •Developing a Competitive Strategy Firms need to have a competitive strategy in order to ensure a competitive advantage.where customers are directed to a business portal because of the efforts of the affiliate. who in turn receive a compensation for their efforts meeting with success -. Without an effective strategy. worldwide presence is ensured. like pay per click advertising. can be a cost strategy or a differentiation strategy. Advertising techniques.Advantages of E-Business Amazon.

on visiting a website. Readily available customer service may help in encouraging the customer to know more about the product or service. •Better Customer Service E-business has resulted in improved customer service. Simple and succinct instructional tabs. . It adopted a differentiation strategy by selling its computers online and customizing its laptops to suit the requirements of the clients. payments can be made online. •Curtailing of Transaction Cost The nature of online business is such that. till the year 2007. and products can be shipped to the customer without the customer having to leave the house. Moreover. was selling computers only via the Internet and the phone. Dell Inc. Websites are sufficiently loaded with directions to facilitate stress-free transactions. Many a time. there is no acting middleman.Advantages of E-Business For instance. the customer is greeted by a pop-up chat window. generally. the costs incurred for every transaction to go through smooth and sound. save the potential buyer from any hassels.

•Overhead Costs Are Reduced An E-business. You also cut back on costs incurred for hiring personnel and retaining them with competitive incentives topped with abundant facilities.Advantages of E-Business The mode of payment is predetermined. . Utility bills and other expenses are manageable. is independent of costs that are incurred due to business having a physical entity. promising security to the customer. Running an e-business is highly convenient as the proprietor does not require to rent another site to execute the business. essentially.

With minimal capital outlay.a company can easily and quickly locate more customers.Benefits of EC • i.processing.storing. v.increased productivity.by introducing an electronic procurement systems.companies can cut the purchasing advt.reduced transportation costs ii.com Supply Chain Improvements & Customization : EC allows reduced inventories and overhead by facilitating ―pull‖type supply chain management. iv.dogtoys.the best suppliers.distributing.eliminating paper. . Cost Reduction EC decreases the cost of creating. Benefits to Organizations Global Reach EC expands marketplace to national and international markets.simplified processes. Costs by as much as 85%.In pull type system the process starts from customer orders and uses just in time manufacturing Lower Communication Costs : the internet is much cheaper than VAN Others : improved customer service. iii.and retrieving paper-based information for example. Highly specialized business: for example www.and the most suitable business partners worldwide. vi.

ii. iv. vii.Benefits of EC • i. A good example of what a Facebook group can be.all year round. . An active community using a Facebook group to tackle antivideo games policies and media. Benefits to Consumers Ubiquity : EC allows customers to shop or do other transaction 24 hrs a day.from almost any location More Products and Services Cheaper Products and Services : by allowing consumers to buy from many places and conduct quick comparisons Instant Delivery : for example in case of digitized products Information Availability : Customers can get relevant and detailed information in seconds rather than in days or weeks Participation in Auctions : allows to participate in virtual auction Electronic Communities : allows customers to interact with other customers in electronic communities and exchange ideas as well as compare experiences eg: Gamer’s Voice. vi. v. iii.

education.Benefits of EC viii Customized Products and Services ix EC facilitates competition which results in substantial discounts • i.Health care for example can reach patients in rural areas .This includes opportunities to learn profession and earn college degrees EC facilitates delivery of public services such as healthcare. Benefits to Society Higher Standard of Living :EC allows some merchandise to be sold at lower prices. iii. .so less affluent people can buy more and increase their standard of living EC enables more individuals to work from home and to do less traveling for shopping resulting in less traffic on roads and lower air pollution EC enables rural areas to enjoy products and services that otherwise are not available to them.and distribution of government social services at a reduced cost and improved quality. iv. ii.

Limitations of EC .

to ensure that information is passed securely between the customer and the merchant and also between merchant and the payment processor. Security Gateway Payment Gateway:A payment gateway is an e-commerce application service provider service that authorizes payments for e-businesses. •Authorization of payments. such as credit card numbers. Some of the main features of a payment gateway include: •Software application designed especially for E-Commerce. Payment gateways protect credit card details by encrypting sensitive information. •Communication between the financial institutions involved and the business and the customer. . although it can be used to authorize payments in traditional brick and mortar businesses.It is the equivalent of a physical point of sale terminal located in most retail outlets. bricks and clicks.Communication Gateways Basically there are two types of Gateways in E-Commerce : Payment Gateway . online retailers. •Encryption of payment and personal data.

the customer's web browser encrypts the information to be sent between the browser and the merchant's web server. This is another SSL encrypted connection to the payment server hosted by the payment gateway. •If the order is via a website. •The payment processor forwards the transaction information to the card association (e. . When a customer orders a product from a payment gateway-enabled merchant. the payment gateway performs a variety of tasks to process the transaction.. •A customer places order on website by pressing the 'Submit Order' or equivalent button. •The merchant then forwards the transaction details to their payment gateway. This is done via SSL (Secure Socket Layer) encryption. •The payment gateway forwards the transaction information to the payment processor used by the merchant's acquiring bank.How payment gateways work A payment gateway facilitates the transfer of information between a payment portal (such as a website.g. or perhaps enters their card details using an automatic phone answering service. Visa/MasterCard). mobile phone or IVR service) and the Front End Processor or acquiring bank.

•The payment gateway receives the response. in a "batch".e. and forwards it on to the website (or whatever interface was used to process the payment) where it is interpreted as a relevant response then relayed back to the cardholder and the merchant. In addition to determining the fate of the payment. (i. •The entire process typically takes 2–3 seconds. •The credit card issuing bank receives the authorization request and sends a response back to the processor (via the same process as the request for authorization) with a response code. . •The merchant submits all their approved authorizations. •Otherwise. •The acquiring bank deposits the total of the approved funds in to the merchant's nominated account. to their acquiring bank for settlement via their processor. approved or declined) the response code is used to define the reason why the transaction failed (such as insufficient funds. the card association routes the transaction to the correct card issuing bank. This could be an account with the acquiring bank if the merchant does their banking with the same bank.How payment gateways work •If an American Express or Discover Card was used. or bank link not available) •The processor forwards the response to the payment gateway. or an account with another bank. •The entire process from authorization to settlement to funding typically takes 3 days. then the processor acts as the issuing bank and directly provides a response of approved or declined to the payment gateway.

In this case. the gateway uses the IP Authentication Header. while all of the systems behind the gateway on the trusted subnet may take advantage of IP Authentication Header services without having to implement them. . When a security gateway is providing services on behalf of one or more hosts on a trusted subnet.Security Gateway A system which acts as the communications gateway between external untrusted systems and trusted hosts on their own sub network . It provides security services for the trusted hosts when they communicate with external untrusted systems. the security gateway establishes the Security Association and provides security services between the security gateway and the external systems.

UNIT II Business To Business E Commerce .

•Businesses. •It refers to the full spectrum of e-commerce that can occur between two organizations. and other organizations depend on computer-tocomputer communication as a fast. economical. inventory management. and receiving proposals. •B-to-B transactions include the use of EDI and electronic mail for purchasing goods and services. governments. supplier management. . and a dependable way to conduct business transactions. sales activities.Business-to-business (b2b) Transactions •We call this category market-link transaction. payment management &service and support. •This includes purchasing and procurement. buying information and consulting services. channel management. submitting requests for proposals. •Also known as Interorganizational e-commerce.

retail. •In mid-1980s. •It is still growing now and is set to become the standard by which organizations will communicate formally with each other in ecommerce . the technique was used in may industries automotive. international trade etc.B2B and EDI •EDI developed in 1960s as a means of accelerating the movement of documents pertaining to shipments and transportation.

. and eliminate out-of-stock problems. and by increasing the number of POs processed with fewer people.Inter-organizational electronic commerce (b2b) The inter-organizational electronic commerce facilitates the following: Supplier management Electronic applications enhance business partnerships by reducing purchase order (PO) processing costs and cycle times. Inventory management •Electronic applications helps to reduce inventory levels. •EC can shorten the order-shop-bill cycle and can also track their documents to ensure that they were received. improve inventory turns.

product. Technical. advanced ship notices. Payment management • Electronic applications link companies with suppliers and distributors so that payments can be sent and received electronically. increases the speed at which companies compute invoices.Inter-organizational electronic commerce (b2b) Distribution management Electronic applications facilitates the transmission of shipping documents such as bills of lading. Channel management Electronic applications can quickly disseminate information about changing operational conditions to trading partners. purchase orders. and lower transaction costs. . •Electronic payment reduces human error. and pricing information that once required repeated telephone calls and countless labor hours can now be posted to electronic bulletin board. and claims and enable better resource management by ensuring the documents themselves contain more accurate data.

Eg.Categories of B2B e-commerce1. Supplier may provide customized solutions & pricing and different pricing schemes to fit the needs of buyer’s businesses. . Intel and Cisco have been exploiting the benefits of supplier-centric e-com. Various customer/buyer businesses interact with supplier at its e-com market place.A supplier sets up the e-com market place.Supplier centric.

2. Buyer-centric e-com-Major business with high volume purchase capacity create an e-com market place for purchase and acquisition by starting a site on their own. The online electronic commerce marketplace is used by the buyer for placing requests for quotations (RFQs) and carrying out the entire purchase process. as they may have adequate capacity and business volumes to lure suppliers to bid at the site. General Electric Information Systems(GEIS) initiated a website for posting invitations for tenders & other accompanying documents. .g. This kind of facility may be utilized by high volume and well recognized buyers. e.

Honeywell International (Myplant. The buyers & sellers.com) and General Electric’s Trading Process Network (TPN). leading to a match and ultimately to a final transaction. Eg. Information available from the intermediary’s database allows a buyer to screen out unsuitable sellers and to compare the offering of many different potential sellers quickly. IndiaMart.In this the third party sets up e-com market and attracts both buyer and seller businesses to interact with each other. where buyers place their request for the quotations and sellers respond by bidding electronically.com. quality. Intermediary-centric e-commerce. availability and delivery of goods. Intermediary reduces the need for buyers and sellers to contact a large number of potential partners on their own. both benefit from the increased options in terms of pricing. .3. conveniently and inexpensively. Third party e-com acts as a hub for both supplier and buyers.

Consumer Supplier’s server (Electronic Store) Consumer Consumer Product Catalog Customer Info Consumer B2C E-commerce B2B E-commerce Supplier centric E-Commerce .

Buyer’s server (Electronic Store) Supplier Supplier Supplier Information Buyer centric E-Commerce .

Business Customer Intermediary’s Electronic Store Business supplier Business Customer Supplier Info Customer Info Business supplier Intermediary centric E-Commerce .

such as internet.with procurement management perspective Electronic intermediary .with marketing management perspective The buying company .Entities of B2B E-Commerce • • • • • • The selling company .possibly implemented using the intranet and ERP(enterprise resource planning systems) .a third party intermediating service provider Network platform .such as EDI and comparison shopping Back-end information system .intranet and extranet Communication platform .

. • In EDI. invoices and other standard business correspondence between trading partners. the computer applications of both sender and receiver have to agree upon a common format of business document which is being sent as a data file over the communication channel.Electronic Data Interchange • EDI is a way of substituting electronic transactions for paper ones. • EDI can be used to electronically transmit documents such as purchase orders. • It is a means to streamline procedures and improve efficiency and productivity. • EDI can also be used to transmit financial information and payments in electronic form.

in a standard syntax. •the electronic transfer from one computer to another of computer processable data using an agreed standard to structure the data. of commercial and administrative data using an agreed standard to structure an EDI message. •the electronic transfer. •the interchange of standard formatted data between computer application systems of trading partners with minimal manual intervention. of unambiguous information of business or strategic significance between computers of independent organizations. . from computer to computer.Some Definition of Electronic Data Interchange (EDI) •the transmission.

Layered architecture of EDI .

Physical Network Infrastructure Layer 1. the user interface and content visible on the screen are tailored or customized to local environment. acknowledgements.who could be using a variety of software applications at their end.The information seen at EDI semantic layer must be translated from a company-specific form to a more generic or universal form so that it can be sent to various trading partners. i. and the software it uses. Standards translation Layer 3.e. price purchase orders. Transport Layer 4.Layered architecture of EDI The architecture of EDI is divided into four layers1. Application Layer- The application layer also called the semantic layer. The Semantic layer describes the Business application that is driving EDI. This layer is specific to a company. Application Layer 2. For a procurement application. and invoice. . this translates into request for quotes.

2. The EDI standards are very important in exchange of data because at sending end a sender manipulate data by EDI as in receiving end data is manipulated by EDI.The Sender who want to send a data use a software application with EDI and exchange data in EDI format so that at the receivers end the receiver can read it. If the sender and receivers of company want to exchange some files then requires a compatible standards of Electronic Data Interchange. This layer of EDI has no mean without application layer so we can say that EDI applications and standard layer are interlinked.a purchase order name field in an X12 std might be specified to hold a max of 50 characters.An application using 75-character field length will produce name truncation during the translation from the application layer to the standard layer . EDIFACT(United Nations Economic Commission for Europe).Layered architecture of EDI To achieve this the company must follow the universal EDI standards eg X12(ANSI). Standard LayerThis layer of EDI architecture defines the structures of the business form and some content which are related with the application layer. For instance.

postal services or private career. This layer defined the component communication path for EDI data transaction. This non electronic way may be registered mail. Transport LayerEDI transport layer is a non electronic way of sending the business form from one company to another company. physical LayerThe physical layer of EDI also called the infrastructure layer. fax etc. Now a days the transportation method is more complex with compare to e-mail. What are the structure of ecommerce supported EDI in which information can be build and what are the communication established over which EDI data transfer from one customer to another customers. telecommunications.Layered architecture of EDI 3. . 4.

the standard format is ―untranslated‖ into a format that can be read by the recipient’s application. . •Result is elimination of delays and errors inherent in paper-based transaction. •Hence. translates that data into a standard electronic format. •At the receiving end. output from one application becomes input to another through the computer-to-computer exchange of information.EDI in Action •EDI takes what has been a manually prepared form or a form from a business application. and transmit it.

Buyer Seller Purchase request initiated in the organization Finance department Finance department Bill Payment Purchasing department Order delivery Paper-based mailroom Paper-based mailroom Sales department Order confirmation Inventory and warehousing Receiving department Product delivery Shipping department Manufacturing department Information flow without EDI .

When the buyer sends a purchase order to a seller.the relevant data must be extracted from internal database and recorded on hard copy. .This information is manually entered into the internal information systems of recipient by data entry operators.This process generates a considerable amount of overhead in labor costs and time delays.This hard copy is then forwarded to seller after passing through several intermediate steps.Information flow without EDI The figure shows information flow when paper documents are shuffled between organizations via mailroom.The reproduction of information also increases risk of errors caused by incorrect data entries. 2. 3.This practice of converting digital data into hard copy data that is reconverted into electronic information again on receiving end generates costs.Seller receive information in form of letters.This method has following disadvantages: 1.

Order confirmation Inventory and warehousing Receiving department Product delivery Shipping department Manufacturing department Information flow with EDI .Buyer Seller Purchase request initiated in the organization Payment Finance department Billing details Finance department Purchase-order delivery Purchasing department EDI-capable computer EDI-capable computer Sales department Automated.

Information flow with EDI
The EDI transactions for a purchase,shipment,and corresponding payment are as follows: 1.Buyer’s computer sends Purchase Order to seller’s computer. 2.Seller’s computer sends Purchase Order Confirmation to buyer’s computer. 3.Seller’s computer sends Booking Request to transport company’s computer 4.Transport company’s computer sends Booking Confirmation to seller’s computer 5.Seller’s computer sends Advance Ship Notice to buyer’s computer 6.Transport company’s computer sends Status TO SELLER’S COMPUTER 7.Buyer’s computer sends Receipt Advice to seller’s computer 8.Seller’s computer sends Invoice to buyer’s computer 9.Buyer’s computer sends Payment to seller’s computer In sum,firms are adopting EDI as a fast,inexpensive and safe method of sending invoices,purchase orders,custom documents,shipping notices, and other frequently used business documents.

An EDI enabled procurement process is given below:
Request for quotation Quotation Purchase Order

Buyer’s Application program for purchasing

Purchase order acknowledgement Shipping notice Invoice

Seller's Application program for order processing

Status request/response
Payment remittance advice

Accounts Payable

Accounts Receivable

EDI is most suited in the area where any of the following characteristics exist:•A large volume of repetitive standard actions. •Very tight operating margins. •Strong competition requiring significant productivity improvements. •Operational time constraints. •Trading partner’s request for paperless exchange of documents.

Technical data Interchange EDI E-mail (Communication)

Mass customization (demand-driven manufacturing)

Network-enabled Business Practices

Virtual & team based enterprise Outsourcing & coordination of logistics

Document workflow systems

Video conferencing

) ii)Data segments(are logical groups of data elements that together convey information such as invoice terms etc) ii)Data elements(are individual fields such as purchase order number.EDI Software 3. . One of the most widely accepted standard is the UN/EDI FACT (United Nations Standards for EDI for Administration Commerce and Transport) announced by the United Nations in 1987. This format requires some standards which have been developed as the EDI standards. company-specific format to structured EDI format.EDI standards 2.Common EDI standards dictate syntax and standardize on the business language.EDI standards are very broad and general however EDI messages share a common structure: i)Transaction set(it is equivalent to a business document such as purchase order.unit price etc) • EDI software: consists of computer instructions that translate the information from unstructured. data formatting and message communication. Thus major functions of EDI software are data conversion.They basically specify transaction set.N/w Infrastructure for communication • EDI Standards: Data that is exchanged electronically must be transformed into a standard widely accepted format.Components of EDI systems 1. EDI software at receiving end receives the message and translates it from the standard format to the company specific format.

2. 4. This EDI service software is concerned with timestamping of documents. keeping track of document on network and maintaining integrity of the data. 3. The EDI service software is concerned with processing the translated EDI document in a way that it become compatible for transmission over computer network. . The translation software or EDI translators perform the important function of translating business data from company specific formats to standard formats and vice versa. The network access software allows the computers at the sending and receiving ends to access the computer and communications channel for the transmission of the message.EDI system consists of four software components: 1. sending acknowledgement of receipt to sender. The application software or business application is the software being used at sending and receiving computers for data input and output respectively ie software produces and processes the information and documents.

Sender Application Software Translation Software EDI Service Software N/w access Software Private Network or Value Added Network (VAN) or the Internet Application Software Receiver Translation Software EDI Service Software N/w access Software .

. value added networks (VAN) or the internet.• Network infrastructure for communications: EDI documents are electronically exchanged over communication networks which connect the trading partners to one another. The communication networks used may be private networks.

Since data is not repeatedly keyed. there is more certainty in information flow.Benefits of EDI 1. 6. 4. Labor cost can be reduced because data is not re-entered at each step. 2. the chances of error are reduced. EDI message can be immediately processed by the receiving computer without any human intervention or rekeying. The delay associated with making documents is eliminated. 7. Time required to re-enter data is saved. 3. Because time delays are reduced. It generates acknowledgement whenever an EDI message is received & it is electronically transmitted to the sender. 5. .

Health care and Insurance EDI 4.EDI applications in business 1.EFT.Financial EDI (eg:Bank Checks.International trade 2.ACH Transfers) 3.Manufacturing/Retail Procurement using EDI .