Business have been looking for ways to increase their profits and market share .

The
search for more efficient ways of doing business has been driving another
revolution in the conduct of business. This revolution is known as electronic
commerce which is any purchasing or selling through an electronic
communications medium. Business planners in institutions and organizations now
see technology not only as a supportive cofactor, but as a key strategic tool.
They see electronic commerce as a wave of future.

Information technology has revolutionized and digitalized economic activity, and
made it a truly global phenomenon. One of the most visible icons of the IT
Revolution is the internet the world wise web. Which is a huge revolutionary
network of computers world wide, which is essentially used for communicating,
interaction, interactive long distance computing and exchange of information giving
rise to a host of applications from military and government to business , education
and entertainment.
E-commerce exists because of internet. It has been born on the net and is growing
with the net . It involves carrying business on and through the net .

E-commerce is a product of the digital economy. It is a source of a paradigm shift
in redefining technology, individual and global societies, as well as national and global
economies.

Electronic commerce is a symbolic integration of communications, data
management, and security capabilities to allow business applications within
different organizations to automatically exchange information related to the sale
if goods and services. Communication services support the transfer of information
from the originator to the recipient. Data management services define the exchange
format of the information. Security mechanisms authenticate the source of
information, guarantee the integrity of the information received , prevent disclosure of
information to inappropriate users, and document that the information was received by
the intended recipient.
Prior to the development of e-commerce

The process of marketing and selling goods was a mass-marketing
and sales-force driven process.

Customers were viewed as passive targets of advertising campaigns.

Selling was conducted in well-insulated channels.

Consumers were trapped by geographical and social boundaries,
unable to search widely for the best price and quality .

E-commerce has challenged much of this traditional business
thinking.
Commerce constitutes the exchange of products and services between
businesses, groups and individuals and hence can be seen as one of the
essential activities of any business.

Electronic commerce or e-Commerce focuses on the use of ICT to enable
the external activities and relationships of the business with individuals,
groups and other businesses .

Electronic business methods enable companies to link their internal and
external data processing systems more efficiently and flexibly, to work
more closely with suppliers and partners, and to better satisfy the needs and
expectations of their customers.

While e-business refers to more strategic focus with an emphasis on the
functions that occur using electronic capabilities, e-commerce is a subset of
an overall e-business strategy.

E-commerce seeks to add revenue streams using the world wide web or
the internet to build and enhance relationships with clients and partners
and to improve efficiency using the Empty vessel strategy.
E-commerce involves the application of Knowledge management systems.

E-business involves business processes spanning the entire value chain :
electronic purchasing and supply chain management, processing orders electronically,
handling customer service, and cooperating with business partners.

Special technical standards for e-business facilitate the exchange of data between
companies. E-business software solutions allow the integration of intra and inter
firm business processes.

E-business can be conducted using the web, the Internet, Intranets, extranets or
some combination of these.

Benefits/Features of E-Commerce

Electronic commerce increases the speed, accuracy, and efficiency of business and
personal transactions. The benefits of E-commerce include the following :

Ubiquity : E-commerce is ubiquitous, meaning that it is available just about
everywhere, at all times. It liberates the market from being restricted to a physical
space and makes it possible to shop from your desktop, at home, at work, or even
from car using mobile commerce. From customer point of view, ubiquity reduces
transaction costs the costs of participating in a market. To transact it is no longer
necessary to spend time and money traveling to market.

Global Reach : E-commerce technology permits commercial transactions to cross
cultural and national boundaries far more conveniently and cost effectively than is
true in traditional commerce. As a result, the potential market size for e-commerce
merchants is roughly equal to the size of the worlds online population.
Universal Standards : The technical standards for conducting e-commerce ,
are universal standards they are shared by all nations around the world.
These standards greatly lower the market entry costs - the cost merchants
must pay just to bring their goods to market. At the same time, for consumers,
universal standards, reduce search cost the effort required to find a suitable
products.

Richness : It refers to the complexity and content of a message.

Interactivity : E-commerce technologies are interactive, meaning they allow
for two-way communication between merchant and consumer. It allows an
online merchant to engage a consumer in ways similar to a face-to face
experience, but on a much more massive, global scale.
Information Density : the internet and the Web vastly increase information density
the total amount and quality of information available to all market participants,
consumers, and merchants alike. E-commerce technologies reduce information
collection, storage, processing, and communication costs.

Personalization / Customization : E-commerce technologies permit personalization
merchants can target their marketing messages to specific individuals by adjusting
the message to a persons name, interests, and past purchases. The technology also
permits customization changing the delivered product or service based on a users
preference or prior behavior.

With the increase in information density, a great deal of information about the
consumers past purchases and behavior can be stored and used by online
merchants. The result is increase in the level of personalization and customization.
Advantages Of E-Business Applications

Catalog flexibility and Online fast updating - Direct "link" capabilities, visual
displays, Extensive search capabilities.

Shrinks the Competition Gap - Reduced marketing / advertising expenses,
compete on equal footing with much bigger companies; easily compete on
quality, price, and availability.

Unlimited Market Place and Business Access Which Extend Customer
Base browsing convenience, anywhere accessibility, 24 hours a day, 7 days
a week, global reach

A 24 Hour Store Reduced Sale Cycle - Reduce unnecessary phone calls and
mailings.

Lower Cost of Doing Business - Reduce inventory, employees, purchasing
costs, order processing costs associated with faxing, phone calls, and data
entry, and even eliminate physical stores. Reduce transaction costs.

Eliminate Middlemen - Sell directly to your customers.
Easier Business Administration with right software, automation of store
inventory levels, shipping and receiving logs, and other business administration
tasks.

Frees Staff - Reduce customer service and sales support.

Gives customers control of sales process. Builds loyalty.

More Efficient Business Relationships - Better way to deal with dealers and
suppliers.

Workflow automation - Shipping, real time inventory accounting system -
Secured, automated registration verification, account entry and transaction
authorization features - Automated RFP and RTQ features for vendor bid
development and selection. - Banking and accounting features customized for
pre-approved third party direct sales, vendor, consignment or internal transfer
transactions.

Secure Payment Systems - Encrypted, secure payment online.

Efficient applications development environment, Allowing customer self
service and 'customer outsourcing.
E-commerce disadvantages and constraints

Physical product, supplier & delivery uncertainty - Perishable goods - Limited
and selected sensory information - Returning goods - Privacy, security,
payment, identity, contract - Defined services & the unexpected , Size and
number of transactions.
E-Business and E-Commerce
The distinction between buy-side and sell-side e-commerce
E-Business applications can be divided into 3 categories

Internal business systems : Customer relationship management, enterprise
resource planning, document management systems, human resource
management.

Enterprise communication and collaboration systems : content
management systems, e-mail, voice mail, web conferencing, Digital work flows
or business process management.

Electronic commerce applications : B2B, B2C, C2C Internet shop, online
marketing etc.

When organizations go online, they have to decide which e-business
models best suit their goals. A Business model is defined as the
organization of product, service and information flows, and the source of
revenues and benefits for suppliers and customers. The concept of e-
business model is the same but used in the online presence.

Some e-business models are E-shops, E-procurement, E-malls, E-auctions,
Virtual communities, Collaboration platforms, Third party marketplaces, value-
chain integration, information brokerage.
Types of E-Commerce

There are different types of e-commerce and many different ways to
characterize these types.

The five major types of e-commerce are :
1. B2C
2. B2B
3. C2C
4. P2P
5. M-Commerce
B2C : (Business-to-Consumer)

The most commonly discussed type of e-commerce is Business-to-Consumer
(B2C) e-commerce, in which online business attempt to reach individual
consumers.

It has grown exponentially since 1995, and is the type of e-commerce that
most consumers are likely to encounter .

Within the B2C category there are many different types of business models :
portals, online retailers, content providers, transaction brokers, market
creators, service providers, and community providers.

B2B : (Business-to-Business)

In this type of e-commerce, one business focuses on selling to other
business. It is the largest form of e-commerce.

B2B e-commerce primarily involved inter-business exchanges, but a number
of other B2B business models have developed, including e-distribution, B2B
service providers, matchmakers, and info-mediaries that are widening the use
of e-commerce.
C2C : Consumer-to-Consumer

C2C e-commerce provides a way for consumers to sell to each other, with
the help of an online market maker such as the auction site.

In C2C e-commerce, the consumer prepares the product for market, places
the product for auction or sale, and relies on the market maker to provide
catalog, search engine, and transaction clearing capabilities so that
products can be easily displayed, discovered, and paid for.

M-commerce

Mobile commerce or m-commerce, refers to the use of wireless digital
devices to enable transactions on the Web.

These devices utilize wireless networks to connect cell phones and
handheld devices to the Web. Once connected, mobile consumers can
conduct many types of transactions, including stock trades, banking, travel
reservations, and more.
P2P : (Peer-to-Peer)

Peer-to-Peer technology enables Internet users to share files and computer
resources directly without having to go through a central Web server.

In peer-to-peers purest form, no intermediary is required. Entrepreneurs and
venture capitalists have attempted to adapt various aspects of peer-to-peer
(P2P) e-commerce.

E-Commerce Business Models

A business model is a set of planned activities (sometimes referred to
as business process) designed to result in a profit in a marketplace.
The business model is at the center of the business plan.

A business plan is a document that describes a firms business model.

An e-commerce business model aims to use and leverage the unique
qualities of the internet and the World Wide Web.

Summary and examples of transaction alternatives between businesses,
consumers and governmental organisations
There are Eight Key Ingredients of a Business Model

1. Value proposition : It defines how a companys product or service fulfils the
needs of the customers. To develop and/or analyze a proposition, the following
questions need to be answered : - Why will customers choose to business with
your firm instead of another company ? - What will your firm provide that other
firms do not and cannot ?

From the consumer point of view, successful e-commerce value propositions
include : personalization and customization of product offerings, reduction of
product search costs, reduction of price discovery costs, and facilitation of
transactions by managing product delivery

2. Revenue model : The firms revenue model describes how the firm will earn
revenue, generate profits, and produce a superior return on invested capital.
The function of business organizations is both to generate profits and to
produce returns on invested capital that exceed alternative investments.

The advertising model : A website offers its users content, services, and/or
products and forum for advertisements and receives fees from advertisers.
Websites with greater viewer ship are able to retain user attention are able to
charge higher advertising rates.
Subscription Revenue Model : In the subscription revenue model, a Web site
that offers its users content or services charges a subscription fee for access
to some or all of its offerings.

Transaction fee revenue model : In this model a company receives a fee for
enabling or executing a transaction. (e.g. Online auction websites taking
some commission from buyer as well as the seller).

Sales Revenue Model : In the sales revenue model, companies derive
revenue by selling goods, information, or services to customers. - E.g.
amazon.com

Affiliate Revenue model : In the affiliate revenue model, sites that steer
business to an affiliate receive a referral fee or percentage of the revenue
from any resulting sales.

3. Market Opportunity : The term market opportunity refers to the companys
intended marketplace and the overall potential financial opportunities
available to the firm in that marketplace . The market opportunity is usually
divided into smaller market niches. The realistic market opportunity is defined
by the revenue potential in each of the market niches.
4. Competitive Environment : The firms competitive environment refers to
the other companies operating in the same marketplace selling similar
products. The competitive environment for a company is influenced by
several factors : how many competitors are active, how large their operations
are what the market share of each competitor is, how profitable these firms
are, and how they price their products.

5. Competitive Advantage : Firms achieve a competitive advantage when
they can produce a superior product a superior product and / or bring the
product to market at lower than most, or all, of their competitors. Firms also
compete on scope. Some firms can develop global markets while other firms
can only develop a national or regional market. Firms that can provide
superior products at lowest cost on global basis are truly advantaged.
6. Market strategy : Market strategy is the plan the company put together
that details exactly how the company intend to enter the market and attract
new customers.

7.Organizational Development : Describes how the company will organize
the work that needs to be accomplished.

8. Management Team : Employees of the company responsible for making
the business model work.

Categorizing E-Commerce Business Models
Major B2C business models are

Portal :- Offers powerful search tools plus an integrated package of content
services; typically utilizes a combined subscription / advertising revenue /
transaction fee model; may be general or specialized.

E-tailer :- Online version of traditional retailer; includes virtual merchants
(online retail stores), clicks and mortar e-tailers (online distribution channel for
a company that also has a physical store); catalog merchants (online version
of direct mail catalog); online malls (online version of mall); manufacturers
selling directly over the Web.
Content Provider :- Information and entertainment companies that provide
digital content over the Web; typically utilizes an advertising, subscription, or
affiliate referral fee revenue model.

Transaction broker :- Process online sales transactions; typically utilizes a
transaction fee revenue model.

Market creator :- Uses Internet technology to create markets that bring
buyers and sellers together ; typically utilizes a transaction fee revenue
model.

Service provider :- Offers services online.

Community provider :- Provides an online community of like-minded
individuals for networking and information sharing; revenue is generated by
referral fees, advertising, and subscription.
Major B2B business models are

Hub, also known as marketplace / exchange electronic market place where
suppliers and commercial purchasers can conduct transactions; may be
general (a horizontal marketplace ) or specialized (a vertical marketplace).

E-distributor :- Supplies products directly to individual businesses.

B2B service provider :- Sells business services to other firms.

Matchmaker :- Link business together, changes transaction on usage fees.

Infomediary :- Gathers information and sells it to business .
Major C2C business models are

C2C business models connect consumers with other consumers .The most
successful has been the market creator business model used by eBay.com.

P2P business models enable consumers to share files and services via Web
without common servers. A challenge has been finding a revenue model that
works.

M-commerce business models take traditional e-commerce models and
leverage emerging wireless technologies to permit mobile access to the
Web.

E-commerce enablers business models focus on providing the infrastructure
necessary for e-commerce companies to exist, grow, and prosper.
Key business concepts and strategies applicable to e-commerce

Industry structure : The nature of players in an industry and their relative
bargaining power by changing the basis of competition among rivals, the
barriers to entry, the threat of new substitute products, the strength of
suppliers, and the bargaining power of buyers.

Industry value chains : The set of activities performed in an industry by
suppliers, manufacturers, transporters, distributors and retailers that
transforms raw inputs into final products and services by reducing the cost
of information and other transaction costs.

Firm value chains : The set of activities performed within an individual firm
to create final products from raw inputs by increasing operational efficiency.

Business strategy : A set of plans for achieving superior long-term returns
on the capital invested in a firm by offering unique ways to differentiate
products, obtain cost advantages, compete globally, or compete in a narrow
market or product segment.
Role of Internet

With the use of internet, it is possible to transmit / receive information
containing images, graphics, sound and videos. ISP industry can offer
services as:
Linking consumers and businesses via internet.
Monitoring/maintaining customer's Web sites.
Network management/systems integration.
Backbone access services for other ISP's.
Managing online purchase and payment systems.

The internet is designed to be indefinitely extendible and the reliability of
internet primarily depends on the quality of the service providers'
equipments.
Benefits of Internet
Doing fast business.
Trying out new ideas.
Gathering opinions.
Allowing the business to appear alongside other established businesses.
Improving the standards of customer service/support resource.
Supporting managerial functions.

Limitations
Security
Privacy
Threats : Hackers, Viruses etc.

Avenues through Internet (Accessibility, Connectivity, Language)

Search Engines, Directories, Crawlers, and Spiders
Meta-search Engines
Plugins
Streaming media - media players, audio visuals)
Live TV
Social networking
Blogs
Wikis
Social Bookmarking
Internet telephony - Real time communication - chat/instant messaging
and Web-based phone calls.
Tags
Collaborations
An intranet is a private computer network that uses internet technologies to
securely share any part of an organization's information or operational systems
with its employees.

Sometimes the term refers only to the organization's internal website, but often
it is a more extensive part of the organization's information technology
infrastructure and private websites are an important component and focal point
of internal communication and collaboration.

Advantages
Workforce productivity.
Linking to relevant information at a suitable time.
Powerful tools for communication within an organization vertically and
horizontally.
Web publishing using hypermedia and Web technologies.
Business operations and management.
Cost-effective.
Promote common corporate culture.
Enhance Collaboration.
Cross-platform Capability.
Immediate Updates.
Supports a distributed computing architecture.
An extranet is a private network that uses internet protocols, network
connectivity, and possibly the public telecommunication system to securely
share part of an organization's information or operations with suppliers,
vendors, partners, customers or other businesses.

An extranet can be viewed as part of a company's intranet that is extended to
users outside the company, usually via the Internet.

Advantages

Exchange large volumes of data using EDI.
Share product catalogs exclusively with trade partners.
Collaborate with other companies on joint development efforts.
Jointly develop and use training programs with other companies.
Provide or access services provided by one company to a group of other
companies, such as an online banking application managed by one
company on behalf of affiliated banks.
Share news of common interest exclusively.
Internet, Intranet & Extranet
The relationship between access to intranets, extranets and the Internet
Internet Basics

In 1969, the US Department of Defense started a project to allow researchers
and military personnel to communicate with each other in an emergency
ARPAnet

Internet is not owned or operated by any one entity.

When two or more computes are connected to each other then it is called as
network. Internet is Network of Networks.

Networks are mainly of two types LAN - two or more connected computers
sharing certain resources in a relatively small geographic location (About 1
km.)

WAN typically consists of 2 or more LANs. The computers are farther apart
and are linked by telephone lines, dedicated telephone lines, or radio waves.
The Internet is the largest Wide Area Network (WAN) in existence.

All computers on the Internet (a wide area network, or WAN) can be
lumped into two groups: servers and clients. In a network, clients and
servers communicate with one another.
A server is the common source that : Provides shared services (for
example, network security measures) with other machines AND Manages
resources (for example, one printer many people use) in a network. The term
server is often used to describe the hardware (computer), but the term also
refers to the software (application) running on the computer. Many servers are
dedicated, meaning they only perform specific tasks (Email Server, Web
server, Database server, Print server etc.)

Independent computers connected to a server are called clients
(workstation). Clients run multiple client software applications that perform
specific functions.
Servers and Clients Communicate
Your computer (client hardware) is running a web browser such as Internet
Explorer (client software).
When you want to surf the web, your browser connects to a remote server and
requests a web page.
The remote server (server hardware) runs web server software (server
software).
The web server sends the web page to your computer's web browser.
Your web browser displays the page.

How it works client/server
Information exchange between a web browser and a web server
Search Engine : Yahoo, Google, Excite, or AltaVista. Instead of trying to
guess where certain information may be located on the Web, search engines
allows to search both the Web and newsgroups.

A search engine searches for keywords and returns a list of documents where
the keywords can be found. Most search engines allow to search using plain
language relevant to the topic of interest, means one don't have to know any
special programming tricks to effectively search the Web.

Secure Sockets Layer (SSL)
Most security measures involve passwords and data encryption. Many e-
commerce websites use SSL technology, an encryption method and industry
standard, to provide the security. SSL transfers information securely across the
Internet. Once browser connects to the web server, sensitive information is
"scrambled," or encrypted, while being exchanged. This way, a third party can't
intercept the data.

A web directory is a collection of Internet sites grouped into categories; using
a directory is analogous to using the Yellow Pages or a library catalog. A
directory is often the best place to begin Internet searching because it looks at
a narrowed range of information. (Comprehensive Vs Topical directories)
Meta-search engines are an outgrowth of search engines. Each search
engine accesses a portion of the Internet; while there may be overlap, no two
search engines will return the same results to a query. A meta-search engine
accesses several search engines, thereby giving the broadest return to a
query.

Portals are designed to be a "one-stop shopping" web page for users.
Portals offer web directories, search engine access, free web-based email,
and customized news, weather, and other information all on one introductory
page.

Plugins are software programs that allows experience of multimedia on the
Web. File formats requiring this software are known as MIME types. MIME
stands for Multimedia Internet Mail Extension. Examples of MIME type are
Jpeg photos: image/jpeg
Flash presentations: application/x-shockwave-flash
Quicktime movies: video/quicktime
MP3s: audio/x-mpeg-3


Streaming video is the backbone of live and pre-recorded broadcasting on the
Web You Tube. A live professional broadcast from a conference, company, or
institution is sometimes referred to as a webcast. A variation on this is a
webinar, a seminar broadcast on the Web.

Live cams / live tv are another aspect of the video experience available on the
Web. Live cams are video cameras that send their data in real time to a Web
server. - Justin.tv, Blip.tv.

As with radio stations one can use a search engine to locate a station's Web
site and follow the links to the live broadcast. There are also plenty of pre-
recorded network TV shows available on the Web. Hulu

Embedded media (aggregator sites) Flickr , YouTube

Social Networking sites Facebook, Myspace - The activities may be limited
to one activity or interest, such as sharing videos, to multiple activities such as
creating a personal profile, posting current activity or state of mind, making
"friends", engaging in discussions, joining groups, sending messages, and so
on. Social networking can involve individuals or institutions, and can be used
for recreational, informational, academic, and professional purposes.
A blog is a journal entry system organized around postings about which
readers can comment. Entries are usually organized with the most recent
postings first. The word "blog" comes from "Weblog" because a blog
consists of a Web-based signed and dated log of individual postings. Blogs
often focus on personal narratives or opinion and are usually maintained by
single individuals. However, there are also plenty of blogs maintained by
groups of people who share the same interests or expertise. Examples:
Techcrunch, The New Old Age, Climate411.

Multiblogging Twitter - With Twitter, one can create an account and blog
in spurts of up to 140 characters. Also, excerpted postings or headlines from
"regular" blogs can be sent automatically to your Twitter account. For an
example, visit the TechCrunch page on Twitter. With a Twitter account, you
can choose to "follow" other members and receive their "tweets" on your
own page. Twitter is used by the famous and non-famous alike for
recreational, professional, commercial, and informational purposes. Below is
an example of a few tweets.

Wikis - A wiki is a publishing platform on which many people can contribute
new content and revise existing content. The content benefits from the
collective knowledge of the contributors.
Social bookmarking allows you to save articles, news stories, blog postings,
etc. from the Web and organize them into folders and/or tags. Examples:
Delicious, CuteULike, Connotea.

Real time communication (Chat / Instant messaging) - user on the Web can
contact another user currently logged in to the same service and start a
conversation. Video chat is also an option. Meebo, Yahoo! Messenger.

Tags - People who create or share content on social networking sites often
have the option of assigning topic words to their content. These are known as
tags. Tags can help organize content into concepts or categories. With so
much information on the Web, topical labeling can be useful. Once tags have
been assigned, users can then click on a tag of interest and see all the
content assigned to that tag. Zotero

Modern usage of internet
Structure
Workplace
Mobile devices
Market

The terms Internet and World Wide Web are often used in everyday speech
without much distinction. However, the Internet and the WWW are not one
and the same.

The Internet is a global data communications system. It is a hardware and
software infrastructure that provides connectivity between computers.

In contrast, the Web is one of the services communicated via the Internet. It
is a collection of interconnected documents and other resources, linked by
hyperlinks and URLs.
Internet Research Tools
Improves download
speed/caching
(ad-supported)
Netsonic http://www.
netsonic.com/
Downloading
Enables users to capture
relevant information from
web sites.
e-notes http://www.
my-enotes.com/
Managing
Lets users manage multiple
web pages (up 100
windows).
BroadPage
http://www.
broadpage.com/
Displaying
Lists web sites related to the
one the user is visiting.
UCmore http://www.
ucmore.com/
Alexa http://www.
alexa.com/
Finding More
Allows users to search for
information on keywords,
including definitions, news and
related web sites.
Atomica http://www.
atomica.com
Finding