GLOBAL E-BUSINESS AND COLLABORATION

Learning Objectives
• What is electronic commerce and how it has evolved into
a second wave of growth
• Define electronic commerce, E-Business and describe
its various categories.
• Describe the difference between Internet and www.
• Describe the difference between Intranet and Extranet.
• Explain the advantages and disadvantages of E-
Commerce.
• The various issues in the web business.

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Learning Outcomes
• Understand what is E-Commerce and the growth.
• Expose into the definition of E-Commerce, E-Business
and also their categories.
• Understand the strength and weakness of E-Commerce.
• Understand the various issues involved in the online
business.

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Electronic Commerce: The Second Wave
• Electronic commerce history

▫ Mid-1990s to 2000: rapid growth (Amazon.com, eBay)

▫ “Dot-com boom” followed by “dot-com bust”
▫ 2000 to 2003: overly gloomy news reports
▫ 2003: signs of new life
 Sales and profit growth return
 Electronic commerce growing at a rapid pace
 Electronic commerce becomes part of general economy
▫ 2008 general recession
 Electronic commerce hurt less than most of economy
▫ Second wave underway

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Electronic Commerce and Electronic Business
• Electronic commerce
▫ Shopping on the Web
▫ Businesses trading with other businesses
▫ Internal company processes (support their buying, selling etc.)
Definition:
The process of buying selling, or exchanging products, services, or
information via computer networks.

• Electronic Business (e-business)

Definition:
A broader definition of EC that includes not just the buying and selling of
goods and services, but also servicing customers, collaborating with
business partners, and conducting electronic transactions within an
organization.
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Electronic Commerce and Electronic Business
• Electronic commerce includes:
▫ All business activities using Internet technologies
 Internet and World Wide Web (Web)
 Wireless transmissions on mobile telephone networks
• Dot-com (pure dot-com)
▫ Businesses operating only online

(The domain name com is a top-level domain (TLD) in the Domain Name System

 of the Internet. Its name is derived from the word commercial, indicating its
original intended purpose for domains registered by commercial organizations.
Later, the domain opened for general purposes).
Categories of Electronic Commerce
E-commerce can be categories by the types of entities participating in
the transactions or business processes.

• Business-to-consumer (B2C)
▫ Consumer shopping on the Web
• Business-to-business (B2B): e-procurement
▫ Transactions conducted between Web businesses
▫ Supply management (procurement) departments
 Negotiate purchase transactions with suppliers
• Business processes
▫ Using Internet technologies to support organization selling and
purchasing activities
• Consumer-to-consumer (C2C)
• Business-to-government (B2G)
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Categories of Electronic Commerce (cont’d.)
• Elements of electronic commerce

▫ Relative sizes of elements

 Rough approximation

▫ Dollar volume and number of transactions

 B2B much greater than B2C

▫ Number of transactions
 Supporting business processes greater than B2C and B2B
combined

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Categories of Electronic Commerce (cont’d.)
This section explains how business processes are built from
their :

•Activity
▫ Task performed by a worker in the course of doing his or her job
▫ May or may not be related to a transaction
•Transaction: exchange of value
▫ Purchase, sale, or conversion of raw materials into finished
product
▫ By recording transaction, accountants help business owners
keep score and measure how well they are doing.
▫ All transaction Involves at least one activity and others many.
•Business processes
▫ Group of logical, related, sequential activities and transactions 9
Categories of Electronic Commerce (cont’d.)
• Web helping people work more effectively
▫ Telecommuting (Telework) - Work at home or other location

• Consumer-to-consumer (C2C)
▫ Individuals buying and selling among themselves
 Web auction site
▫ C2C sales included in B2C category
 Seller acts as a business (for transaction purposes)
• Business-to-government (B2G)
▫ Business transactions with government agencies
 Paying taxes, filing required reports
▫ B2G transactions included in B2B discussions

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The Internet and WWW
• HTTP
The Hypertext Transfer Protocol (HTTP) is an application protocol for
distributed, collaborative, and hypermedia information systems.
[1] HTTP is the foundation of data communication for the World Wide

Web. Hypertext is structured text that uses logical links (hyperlinks)

between nodes containing text. HTTP is the protocol to exchange or
transfer hypertext.

• WWW
The most common technique for publishing information on the
Internet. It is accessed through web browsers which display web
pages of embedded graphics and HTML/XML encoded text
 The intranet and extranet
• Internet
▫ The internet refers to the physical network that links computers
across the globe. It consists of the infrastructure of network
servers and communication links between them that are used to
hold and transport information between the client PCs and web
servers.
• Intranet
▫ An intranet corporate or government network that uses Internet
tools, such as web browsers, and Internet protocols.
• Extranet
▫ A network that uses the Internet to link multiple intranets.

Difference between internet intranet and extranet. It is a Global system of interconnected

computer network. It is a Private network specific to an organisation. It is a Private
network that uses public network to share information with suppliers and vendors.
 October 15, 2021

Internet, Intranet and Extranet

Intranet is shared content accessed by members within a single organization.

Extranet is shared content accessed by groups through cross-enterprise boundaries.
Internet is global communication accessed through the Web.

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Advantages and Disadvantages of Electronic
Commerce
• E-commerce increases sales and decreases costs
• Virtual community: gathering of people online
▫ Using Web 2.0 technologies –that allows users to participate in the
creation, editing and distribution of content on a web site owned
and operated by third party.(wikipedia, you tube, myspace)
• E-commerce buyer opportunities
▫ Increases purchasing opportunities
▫ Identifies new suppliers and business partners
▫ Efficiently obtains competitive bid information
 Easier to negotiate price and delivery terms
▫ Increases speed, information exchange accuracy
▫ Wider range of choices available 24 hours a day
 Immediate access to prospective purchase information

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Advantages and Disadvantages of Electronic
Commerce (cont’d.)
• Benefits extend to general society welfare
▫ Lower costs to issue and secure:
 Electronic payments of tax refunds
 Public retirement
 Welfare support

▫ Provides faster transmission

▫ Provides fraud, theft loss protection
 Electronic payments easier to audit and monitor
▫ Reduces commuter-caused traffic, pollution
 Due to telecommuting
▫ Products and services available in remote areas
(Example: Distance learning)

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Disadvantages of Electronic Commerce
• Poor choices for electronic commerce
▫ Perishable foods and high-cost, unique items (jewelry)

• Disadvantages will disappear when:

▫ E-commerce matures
 Becomes more available to and accepted by general population
▫ Critical masses of buyers become equipped, willing to buy
through Internet
 Online grocery industry example

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Disadvantages of Electronic Commerce
(cont’d.)
• Additional problems
▫ Calculating return on investment
 Committing to any new technology difficult to do because the cost and
benefits have been hard to quantify.
▫ Recruiting and retaining employees
▫ Technology and software issues
 Difficulty of integrating existing database and transaction-processing
software designed for traditional commerce into electronic commerce.
▫ Cultural differences
 Some customer still fearful of sending their credit card numbers over the
internet and having online merchants.
▫ Consumers resistant to change
▫ Conflicting laws
 The legal environment , on e-commerce is full of unclear and conflicting
laws. 17
 Digital Technologies for Business
• Drivers of business Internet adoption

▫ E-Commerce and E-Business is driven by benefits to different

parts of their organization.

▫ They are concerned how the benefits of e-business will impact on

profitability.

▫ The two main ways in which this can be achieved:

 Potential for increased revenue arising from increased reach to a larger
customer base and encouraging loyalty and repeat purchases among
existing customers.
 Cost reduction achieved through delivering services electronically.
Tangible and intangible benefits from e-commerce and
e-business.
International Nature of Electronic Commerce
• Internet connects computers worldwide

• When companies use Web to improve business process:

▫ They automatically operate in global environment

• Key international commerce issues

▫ Trust
▫ Culture
▫ Language
▫ Government
▫ Infrastructure

E- Business, Ninth Edition 20

Trust Issues on the Web
• Important to establish trusting relationships with
customers
▫ Rely on established brand names

• Difficult for online businesses

▫ Anonymity exists in Web presence
▫ Banking example: browsing site’s pages
 Difficult to determine bank size or how well established

• Business must overcome distrust in Web “strangers”

E- Business, Ninth Edition 21

Language Issues
• Business must adapt to local cultures
▫ “Think globally, act locally”
▫ Provide local language versions of Web site
▫ Customers more likely to buy from sites translated into own
language
▫ 50 percent of Internet content in English
▫ Some of current Internet users do not read English
 By 2018: 70% of e-commerce transaction will involve at least one
party outside of the United States

• Languages may require multiple translations

▫ Separate dialects

E- Business, Ninth Edition 22

 Language Issues (cont’d.)
• Large site translation may be prohibitive
▫ Decided by corporate department responsible for page content

• Mandatory translation into all supported languages

▫ Home page
▫ All first-level links to home page

• High priority pages to translate

▫ Marketing, product information, establishing brand

• Use translation services and software

▫ Human translation: key marketing messages
▫ Software: routine transaction processing functions
E- Business, Ninth Edition 23
Key Terms:
• Dot-com : A company whose operations are entirely or
primarily internet-based, or more specifically a company
whose business model would not be possible if the internet
did not exist.

• Tangible benefits :Tangible benefits of electronic

commerce initiatives Increased sales, Reduced costs

• Intangible benefits : Intangible benefits of electronic

commerce initiatives Increased customer satisfaction

E- Business, Ninth Edition 24

 October 15, 2021
Compulsory page

References: (refer Harvard style)

• Efraim Turban, Jae Kyu Lee, Dave King, Judy McKay,
Peter Marshall (2010), Electronic Commerce 2010.
Prentice Hall
• Chaffey, D. (2006) E-Business and E-Commerce
Management. Financial Times Prentice Hall

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